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HomeMy WebLinkAboutAgenda BOC 062311AGENDA CITY OF PALM BEACH GARDENS BUDGET OVERSIGHT COMMITTEE CITY COUNCIL CHAMBERS Thursday June 2 3 , 201 1 , 8:3 0 AM I. CALL TO ORDER II. PLEDGE OF ALLEGIANCE III. ROLL CALL : Regular Members L. Marc Cohn Chair Bernard Pettingill Regular Member Phillip Woodall Regular Member Marilyn Lew -Jacobs Regular Member IV. ADDITIONS, DELETIONS, MODIFICATIONS: V. APPROVAL OF MINUTES 1. April 28 , 2011 VI. ITEMS BY COUNCIL LIAISON VII. ITEMS BY STAFF LIAISON 1. Overview of preliminary FY 2012 Budget 2. Discussion of alternative revenue sources VIII. OLD BUS I NESS IX. NEW BUSINESS X. COMMENTS BY PUBLIC XI. COMMENTS BY THE BOARD XII. ADJO U RNMENT B UDGET O VERSIGHT C OMMITTEE M EETING PAGE 04 ·28 ·11 1 CITY OF PALM BEACH GARDENS 1 BUDGET OVERSIGHT COMMITTEE 2 REGULAR MEETING 3 APRIL 28 , 20 1 1 4 5 I. CALL TO ORDER 6 The regular meeting was called to order at 8 :3 2 a.m. by Chair L. Marc Cohn . 7 II. PLEDGE OF ALLEGIANCE 8 III. ROLL CALL 9 PRESENT: Chair L . Marc Cohn , Phillip A. Woodall , Marilyn Lew -Jacobs , Bernard Pettingill . 10 ABSENT: None. 11 ALSO PRESENT: Vice Mayor, Council Liaison Robert Premuroso; Finance Administrator, 12 Staff Liaison Allan Owens; Deputy Finance Administrator, Alternate Sta ff Liaison Mary 13 Anderson -Pickle . 14 IV. ELECTION OF V ICE CHAIR 15 Bernard Pettingill made a motion nominating Phillip Woodall for Vice Chair . 16 Marilyn Lew -Jacobs seconded. 17 Motion passed 4 -0. 18 V. ADDITIONS, DELETIONS, MODIFICATIONS 19 None . 20 VI. APPROVAL OF MINUTES 21 Bernard Pettingill made a motion for approval of the March 2 4 , 2011 minutes . 22 Marilyn Lew -Jacobs seconded. 23 Motion passed 4 -0. 24 VII. ITEMS BY COUNCIL LIAISON 25 None. 26 VIII. ITEMS BY STAFF LIAISON 27 1. Presentation by Mr. Jose Fernandez, Principal and Consulting Actuary, Cavanaugh 28 McDonald Consulting LLC, regarding actuarial analysis of public safety pensions . 29 Presentation: Mr. Jose Fernandez . 30 Discussion ensued. 31 Marilyn Lew -Jacobs left the meeting at 9:35 a.m. 32 2. Discussion of alternative revenue sources . 33 3. Discussion of Committee schedule and agenda through August, 2011 . 34 Committee members ag reed to reschedule the August 25, 2011 meeting to August 11, 2011. 35 4. Standard & Poor’s bond rating review . 36 Item 2 will be included in the May 26 , 2011 agenda. 37 IX. OLD BUSINESS 38 None . 39 X. NEW BUSINESS 40 None. 41 XI. COMMENTS BY THE PUBLIC 42 None. 43 XII. COMMENTS BY THE BOARD 44 None . 45 46 (The remainder of this page intentionally left blank.) 47 48 49 B UDGET O VERSIGHT C OMMITTEE M EETING PAGE 04 ·28 ·11 2 XIII. ADJOURNMENT 1 Meeting was adjourned at 9:4 0 a.m. 2 The next regular meeting will be held M ay 26 , 201 1 . 3 4 5 6 APPROVED : 7 8 9 10 L. Marc Cohn , Chair 11 12 13 14 Phillip A. Woodall, Vice Chair 15 16 17 18 Bernard Pettingil l 19 20 21 22 Marilyn Lew -Jacobs 23 24 25 26 (Vacant) 27 28 29 30 31 ATTEST : 32 33 34 35 Donna M. Cannon 36 Municipal Services Coordinator 37 38 39 40 41 42 43 NOTE: These minutes are prepared in compliance with 286.011 F.S. and are not verbatim transcripts of 44 the meeting. A verbatim audio recording is a vailable from the Office of the City Clerk. All referenced 45 attachments on file in the Office of the City Clerk . 46 47 48 B UDGET OVERSIGHT COMMITTEE F ISCAL Y EAR 2012 B UDGET U PDATE June 23, 2011 P ROJECTED F UND B ALANCE AS OF 9/30/11 Fund Balance 10/1/10 $27,958,605 Estimated revenues FYE 9/30/11 67,284,835 Estimated expenditures FYE 9/30/11 (68,837,898) Estimated Fund Balance 9/30/11 $26,405,542 Less: Estimated Reserves for PO’s (500,000 ) Reserve for Series 2003 Debt Service (2,395,707) Reserve for Law Enforcement (304,685) Reserve for Prepaid Expenditures (58,361) Designated for Economic Development (1,282,247) Estimated Undesignated Fund Balance 9/30/11 $21,864,542 31.76% P RELIMINARY GENERAL FUND REVENUES & EXPENDITURES –FY 2012 Estimated Undesignated Fund Balance 10/1/11 $21,864,542 Estimated revenues FYE 9/30/12 64,862,963 Estimated expenditures FYE 9/30/12 (66,706,345) Estimated Undesignated Fund Balance 9/30/12 $20,021,160 30% U PDATE ON F ISCAL Y EAR 2012 B UDGET P ROCESS W HAT ’S NEXT ? Final property values to be distributed 7/1/2011 Detail line -item budget will be available for distribution 7/12/2011 Council meeting on 7/19/2011: Set maximum millage First reading of proposed Communications Services Tax ordinance Two public hearings on 9/8/2011 and 9/22/2011 Budget Oversight Committee submits their report to Council P ENSION UPDATE C HAPTER 175 AND 185 C ONSIDERATIONS Legislature did not make any substantial changes, other than definition of earnings and increasing member contributions In addition, benefits cannot be less than statutory minimums or levels in 1999, whichever is greater Therefore, the following benefits cannot be reduced Compensation defined as all W -2 income Retirement age of 52 with 10 years service Service based retirement in both plans (20 and out, 25 and out) R ECOMMENDED P LAN Staff recommends opting out of the 175 and 185 funding program More flexibility to design a pension plan that is equal for both firefighters and police officers Additional savings could be realized by establishing one plan, with one board Eliminates need for two investment managers, attorneys, actuaries, auditors, and investment monitors R ECOMMENDED P LAN D ESIGN One plan for both police officers and firefighters Opt out of Chapters 175 and 185 2.75% multiplier No COLA Pensionable earnings base pay only Maximum benefit 75% of average final compensation Retirement age 59 with 10 years of service Eliminate service based retirement (i.e., 20 years and out for police; 25 and out for firefighters) Q UESTIONS ? S UMMARY OF C AVANAUGH M ACDONALD S TUDY C HANGES A NALYZED Pensionable earnings to include only base pay Eliminate COLA in Fire Plan; no change in multiplier (3%) Reduce Police Pension multiplier to 3.1% from 3.5% Retain two plans; continue to participate in Chapters 175 and 185 Assumes new benefits apply to current and new employees for future service (two tier plan) Total estimated savings year 1 >$2.1M O THER P OSSIBLE S AVINGS (NEED DETAILED IMPACT STUDY ) Reduce maximum annual benefit to 75% (currently 100% Police, 99% Fire) Eliminate service based retirement eligibility (currently 25 yrs for Fire, 20 yrs for Police) Raise retirement age to 59 from 52 Eliminate interest guarantee in DROP Options would be: 1) Earn what fund earns or 2) Self -directed investment option Total estimated savings year 1 -TBD A NALYSIS OF C HAPTERS 175 AND 185 C HAPTER 175 AND 185 C ONSIDERATIONS City’s use of funds was frozen in 1999; future increases in dollars had to be used for additional benefits Plans currently receive about $1 M annually Of this, only $235,000 can be used to offset City contributions S UMMARY Multiplier Pensionable Earnings COLA Retirement Age Maximum Benefit Service Based Retirement Current Plan Police 3.5%All W -2 income None 52 With 10 yrs service 100% of AFC 20 and out Fire 3%All W -2 Income 3%52 With 10 yrs service 99% of AFC 25 and out FRS 3%Base pay plus OT up to 300 hrs./no unused leave 3%60 With 8 yrs service 100%30 and out Study Police 3.1%Base pay plus OT up to 300 hrs./no other income None 59 With 10 yrs service 75%None Fire 3%Base pay plus OT up to 300 hrs./no other income None 59 With 10 yrs service 75%None Recommende d (Police & Fire) 2.75%Base pay only None 59 With 10 yrs service 75%None Town of Palm Beach 1.25% plus a DC Base pay only None 65 With 10 yrs service No maximum None Comparison of Plans A LTERNATIVE R EVENUE S OURCES FY 2011/2012 City of Palm Beach Gardens Budget Oversight Committee June 23, 2011 B ACKGROUND At March 24, 2011 meeting, Committee requested additional information regarding alternative revenues Presentation focuses on following, which can be implemented for FY 2011/12: 1.Increase Communication Service Tax 2.Implement a Public Service Tax on electric services Compare above options to Ad valorem tax increase B ACKGROUND Overview of following, which could only be implemented for FY 2012/13: 1.Establish non -ad valorem assessment for solid waste collection 2.Establish non -ad valorem assessment for stormwater maintenance and improvements Communication Service Tax C OMMUNICATION S ERVICE T AX Fee charged on all communications services, including cellular charges, land line phones, and cable TV Chapter 202.21of Florida Statutes implements rate changes each January 1 st , and must be adopted by preceding September 1 st Next opportunity is January 1, 2012, and ordinance must be adopted by September 1, 2011 Current rate 1.5% generates $1 million annually Maximum rate 5.22% would generate an additional $2.47 million ($1.85 million for FY 2011/12 due to 9 months’ collections) Effect of increasing Communication Service Tax on three typical residents: Average Annual Bill Increase in Rate Annual Increase Monthly Increase $1,200 3.72%$45 $3.75 $2,400 3.72%$90 $7.50 $3,600 3.72%$135 $11.25 Communication Service Tax Electric Utility Tax E LECTRIC U TILITY T AX Fee charged on sale of electricity, collected by FPL and remitted to City Current rate 0% 5% rate would generate an additional $1.9 million Requires adoption of ordinance to be transmitted to FPL E LECTRIC U TILITY T AX Effect of increasing Electric Utility Tax on three typical residents: Typical Annual Bill Increase in Rate Annual Increase Monthly Increase $1,500 5.0%$50 $4.17 $3,000 5.0%$100 $8.33 $4,500 5.0%$150 $12.50 Note: Estimates provided by FP&L. Rate does not apply to portion of bill related to fuel adjustment charges Ad valorem Tax A D VALOREM T AX Increase of .25 mills to generate an additional $1.9 million Equivalent to increasing CST to 5.22%, or implementing a 5% Electric Utility Tax A D VALOREM T AX Effect of increasing Ad valorem Tax by .25 mills on three typical residents: Taxable Value Increase in Millage Annual Increase Monthly Increase $200,000 .25 $50 $4.17 $450,000 .25 $113 $9.37 $700,000 .25 $175 $14.58 Note: Assumes properties with a $50,000 Homestead Exemption Non -ad Valorem Assessment for Waste Collection or Stormwater Maintenance -FY 2012/13 S UMMARY 1.Per Section 197.3632 Florida Statutes, a public hearing must be held and a resolution adopted before 1/1/2012 to be effective for FY 2012/2013 2.Transmit resolution to Property Appraiser, Tax Collector and Department of Revenue by 1/10/2012 3.Advertise notice of intent for 4 consecutive weeks prior to hearing 4.Adopt assessment rates at a public hearing between 1/1/2012 and 9/15/2012 5.Notice this hearing by first -class mail and advertisement 6.Provide rates to SWA to utilize their roll Questions