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
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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
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B UDGET O VERSIGHT C OMMITTEE M EETING PAGE
04 ·28 ·11
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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
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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