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HomeMy WebLinkAboutMinutes BOC 113006BUDGET OVERSIGHT COMMITTEE November 30, 2006 MINUTES The Budget Oversight Committee met on November 30, 2006 in the Growth Management Conference Room in the Municipal Complex, located at 10500 North Military Trail, Palm Beach Gardens, Florida. The meeting was called to order by the Chairperson, John Chaplik, at 8:36 AM. Patricia Snider, City Clerk welcomes the two new members to the Budget oversight Committee. I. Roll Call Members Present: John Chaplik - Chairperson Harvey Goldberg - Vice Chairperson Members Absent: Martin Cohen - Committee member Also Present: Hal Valeche - Council Liaison Allan Owens - Finance Administrator /Staff Liaison Mary Anderson- Pickle - Deputy Finance Administrator New Members: L. Marc Cohn Mark Veil H. Chevron Energy Solutions Presented by Richard Suchant Jack Doughney informed us that Mark Wilson attended one of the conferences and had the opportunity to run into one of the Chevron groups where they were doing a presentation for the APWA (American Public Works Association) Facilities Managers group. He heard one of the presentations, started an interaction with this group last spring and has been working with them for six months now talking about energy solutions. They were here to present a National Program that they have done for numerous municipalities within the State Of Florida. Richard Suchant from Chevron Energy solutions was introduced by Mark Wilson, Facilities Manager for the City. Richard Suchant, Business Development Manager for the South Region, also introduced Tracey Lampton, Business Development Manager for the South region and Dave Pakrin Head Engineer also from the South Region all based out of Ft. Lauderdale. They started speaking to the City back in March and had requested copies of the utility bills. They spoke about doing a feasibility study which consisted of a one or two day walk -thru of the facility with their engineers to see if they could identify any kind of energy conservation measures, then come back and present a report. Richard explained who they were and what their responsibilities are. They go into public facilities, upgrade the facilities and look at reducing their energy costs. All these upgrades are self funded and are guaranteed to pay for themselves through the energy savings. Richard said Chevron is Budget Oversight Committee Meeting Minutes Page one of the largest companies in the United States and some of the projects that they are involved in are located in Orlando where they currently have a hydrogen station for the Orlando airport. Some of these projects involvement are on Solar, Geo- Thermo, and large wind installations throughout California. With a Broad experience in the energy market, they can hopefully bring this to the City of Palm Beach Gardens. Their main topic was on Performance Contracting and a slide presentation was presented showing what they are trying to do for the City. Richard explained that Performance Contracting is looking into the City's current utility budget that they have budgeted and using those dollars to self fund upgrades within the City by bringing in more efficient equipment which will lower maintenance costs. This is set up through the Florida Statues where the energy savings will be guaranteed over the term of the contract. What they are proposing to the City of Palm Beach Gardens is a Performance Contracting partnership which will bring the following measures to the City: More efficient equipment that requires less maintenance, lowering energy costs, comfortable solutions, enhancing the public image within the City and working with the development of the newer buildings to make sure they are lead certified and up to code on new energy efficient equipment. Looking at the Cities utility expenditures for 2005, Richard informed us that the City has spent over $94,000.00 on water bills and $834,000.00 on electricity. The diesel fuel was not reviewed during that time but these are some of the things that they will take a look at more in depth with a certified interview audit. The feasibility study that they looked at and the things they found during their one day walk -thru, they feel that the City has a great opportunity for energy savings even though it's a small City. Mark Wilson had brought to their attention, Thermo Energy Storage with the idea of generating electricity in the evening, storing the ice and using it to cool water during the day time in order to create the air conditioning systems within the City. Rebates are also available from Florida Power and Light that will help offset some of these costs. Richard mentioned that every penny helps, taking a look at the lighting, recreation center, theater room, dance studio are some of the areas that had non - efficient lighting with the way the technology is today. In their Feasibility study on an actual performance contract, Richard mentioned that all of this will be monitored through the energy savings process from each one of these upgrades for an affirmative contract. Day - lighting is an idea of opening up to sky lights and bringing in day - lighting, this way the City can save on energy cost and not having to turn on their lights during the day -time. Water conservation is another opportunity within the City, faucets and low flow toilets. Another project they did with South Florida Water Management was buying fuels for the Cities generators and at the present time he does not believe that the City has full back up power. This will give them the opportunity to bring Natural gas to the City and convert the generators to run on a combination of diesel and natural gas. Richard informed us that there were some new technology computer systems which the City can set up to turn the lights on and off without having a manual person to do so before events and having someone call in to schedule lights being turned on and off. He said there were some new lights that were brought in after the hurricane and during their audit, they will need to take a look at the ones that are efficient and the ones that are not. All of this will be brought to the board in an actual report more in depth. During their one day walk through, these were some of the things that they need to dig deeper into in order to put the exact numbers together. Their reflective roof coatings is an older technology, HVAC (Heating, Ventilating and Air Conditioning) replacements, Budget Oversight Committee Meeting Minutes Page 2 DX Units, bringing in new HVAC conditioning units, there will be energy savings, solar films and their engineer will put the numbers together with all these energy upgrades. They had looked at the potential energy savings and even though the City was a little less than 929,000.00 in 2005 on their energy expenditures which was just water and electricity and based on their experience, the City could save any where from 10% to 20% on energy savings on the total. On the utility budget, the City should expect about 100,000.00 to 185,000.00 in energy savings and looking at the performance contracts that was done over a ten or fifteen year period, the reason why they were done like that, was because there were some quick pay backs as far as lighting, which were 4 or 5 years pay backs and in the other projects that were longer paybacks. So the longer it's extended the more energy upgrade is expected within the City. Richard explained that the City is looking at possibly 1.5 million dollars in energy upgrades and with their past experience, they can find that much energy savings here within the City of Palm Beach Gardens. Some of the projects that they need to take a look at with the grants that are available within the State of Florida, for example Solar, you can store power with batteries, some Cities uses it to recharge their vehicles or they can generate hot water for their facilities. The pay backs are different within each area and looking at Florida, the energy costs are rising and you consistently have to look at paybacks. Richard recommended that it didn't make sense to look at a full out energy audit which is an investment grade audit, utilizing the State term contract, the investment grade audit can be done and would take them about 3 to 4 months to complete. At that time, they would bring back the types of upgrades they found within each facility, they would then present it to the Board and then see the performance contract put in place which would be the dollars of the upgrades and what the exact costs are, comparing it to the exact energy savings through their investments grade audit. But it is very important that their engineers do the numbers correctly because they have to guarantee the energy savings for the period of the contract. One of the things that set Chevron Energy Solutions apart from the other energy service companies is that Chevron is vendor natural, they are not trying to push one control through, one HVAC equipment. They will work with our staff to pick the best piece of energy efficient equipment. With the implementation process, they will try to use local contractors for these upgrades to keep the money within the community and they are not coming to the City of Palm Beach Gardens to push the Cities operation staff and maintenance staff out of the way, they will work very closely with them. This will be a long term relationship over a period of time. He said everyone needs to be happy with whom they're working with, contractors that the City may recommend or they have their own contractors who are excellent at what they do. Putting their partnership together over a 10 to 15 yr period, it is a partnership that is shared savings because if they do not meet the energy savings, they would have to cut the City a check for the difference, so it is shared as far as responsibilities and risks on both sides. After the completion of the upgrades, there are on going measurements, verification of savings for the length of the contract. The floor was then opened up for questions. Harvey Goldberg asked Richard Suchant if there were any cost for doing an audit, and if so, what would those costs. Richard responded that the great thing about the State contracts is that there is no way for them to recoup those costs, there is a cost on their side and they need to be careful that everyone is serious on implementing a project. If Budget Oversight Committee Meeting Minutes Page they go through 3 or 4 months energy audit process there's no way for them to recoup through the State term contract, which is why it is an excellent mechanism for Cities. If they do this energy audit and they bring back a viable project that pays for itself, the City would be very interested in doing a project. Harvey Goldberg also asked Richard Suchant about the projected cost based on his experience because the savings cost is about a million and a half dollars. Based on his illustration, what would the investment have to be by the City in order to gain that savings? Richard informed Harvey that where the upgrades pays for the energy savings, they will try to pay back over a 10 year period so he will be looking at that type of investment but he has to keep in mind that the City has already budgeted a million dollars and if they take out $150,000.00 of it, this is monies the City is able to free up and use else where. Richard said that they are using monies that the City have already budgeted for without lowering the energy cost and people might think there's a catch but nothing is free, the upgrades have to be paid for, the City is getting new equipments and they can actually put numbers on their maintenance costs. Harvey Goldberg's next question was, he knows that when there are energy savings for profit enterprises, there are certain tax credits that are available because of energy savings and is there any kind of credit available to the City that they could take advantage o£ Richard said yes, there are more grants that will be helpful to the City and with FPL there are rebates available. But most of those tax exemptions are set up for residential. Harvey Goldberg said he thought there were energy savings to replace the lighting systems. Richard said there are some available but they will need to take a look at those, but on a significant dollar amount, the City's biggest one is Thermo Storage set up through FPL The rebates that are available, the payback and if payback was not available it would have been difficult so that would be the most significant one. They would look at the other rebates and credits that are available but they are not going to be as significant as the Thermo Storage. Harvey Goldberg asked how the Thermo Storage works does. Richard asked his engineer Jake to better explain the use of the Thermo Storage. Jake said that the Thermo storage is for the cooling system. There is a chiller in the back that runs continuously and as the lugs goes up the chiller runs harder. Thermo storage is said to use ice to store the energy. The chiller would not be running at nights and be off during the day. The power used by the chiller is going to be the same because it is still running the same hours but the utilities charges a demand which is charged during the day time so the City will be saving the demand charges on the electric bill. So the City is basically saving on utility and demand rates. John Chaplik asked, if they put together a package for the City in terms of ten items per energy savings, can they cherry pick and say these are the best projects, influence some of the other projects and still get the guarantees. Richard said, "Absolutely" when they bring back their investment grade audit they would sit down and the City will be able to pick. But if the City illuminates some projects, it may have an effect on the payback and they will need to adjust the numbers. This is a partnership they are not going to tell the City what to do, they will work with what's best for the City, what upgrades they might have budgeted for and what they might have not budgeted for. John Chaplik asked, presume they are getting a certain pay back period, is the average payback period roughly about ten years in terms of the expenditure verses energy Budget Oversight Committee Meeting Minutes Page 4 savings? Richard said not for everything but when you look at performance contracting, you are actually combining all your energy savings with some pay backs that are shorter and some that are longer, you are able to get things accomplished that you may not be able to get accomplished over a short period of time. So you get more energy upgrades over a longer period of time. John Chaplik said he did not see any recommendations on the fleet and did Richard take a look at it. Richard said they were going to meet in March, they spoke briefly about it, it is something they could definitely take a look at and they have a lot of experience in it. There are different kinds of options, depending on the size of the fleet and everything they do, they are looking at the payback. Harvey Goldberg asked if somewhere in this whole process, Chevron is earning a fee. Richard said yes. Harvey Goldberg asked how does that happen, where does it happen and what is that fee. Richard said, like any other business, they are into it to make money. There is a proper amount of profit that is involved on the project management phase so it is put into the project itself. They are the project managers and engineers so their profit is put into the contract. He said that they are not taking a percentage of the Cities savings. Typically they go above and beyond on their energy savings. John Chaplik wanted to know what the actual guarantee looks like with a 15% savings. Richard said they would bring in their audit, an actual project which would be the Cities total cost for the project then at that point they would set up a performance contract through the Department of Management Services which he could give them a copy of. They did review it, there just a few changes that needed to be made. They have used it with South Florida's Water Management. He said that the Cities energy savings will pay for the project over the length of term of the contract. John Chaplik asked if the City expands with their projecting population growth, presuming that their KW's are going expand naturally with the Cities population increase, how does that works in terms of the contract. Richard Suchant says they would need to take a look at that through the contract at the time and make any adjustments. Mark Veil asked if the capital layout was included in the fee. Richard said yes, it does. If the project they brought back was 1.5 million that would include all costs. John Chaplik asked if they will still get a fee if they decided to go through with this audit and the City Council says ok, they have looked at the numbers and they decide not to go through with the project. Richard said that through the Department of Management Services they do not allow them to collect a fee. They have had arrangements with the Department of Corrections where they said they understood the time that was invested and they were paid based on what they felt was a reasonable fee, but legally there is no way for them to collect that fee. That is why it is important that they do a lot of their work up front with everyone involved, this way everyone is clear and they don't have to hit that stage where people are not interested at that point. Tracey from Chevron added, their contact was to protect the agencies. But they wanted to make sure that the City understood that there are going to be an extensive amount of time that the engineers will go through the buildings and look at all the systems. They are going to invest a great deal of time and they want to make sure that if they do what they said they are going to do, Budget Oversight Committee Meeting Minutes Page 5 savings? Richard said not for everything but when you look at performance contracting, you are actually combining all your energy savings with some pay backs that are shorter and some that are longer, you are able to get things accomplished that you may not be able to get accomplished over a short period of time. So you get more energy upgrades over a longer period of time. John Chaplik said he did not see any recommendations on the fleet and did Richard take a look at it. Richard said they were going to meet in March, they spoke briefly about it, it is something they could definitely take a look at and they have a lot of experience in it. There are different kinds of options, depending on the size of the fleet and everything they do, they are looking at the payback. Harvey Goldberg asked if somewhere in this whole process, Chevron is earning a fee. Richard said yes. Harvey Goldberg asked how does that happen, where does it happen and what is that fee. Richard said, like any other business, they are into it to make money. There is a proper amount of profit that is involved on the project management phase so it is put into the project itself. They are the project managers and engineers so their profit is put into the contract. He said that they are not taking a percentage of the Cities savings. Typically they go above and beyond on their energy savings. John Chaplik wanted to know what the actual guarantee looks like with a 15% savings. Richard said they would bring in their audit, an actual project which would be the Cities total cost for the project then at that point they would set up a performance contract through the Department of Management Services which he could give them a copy of They did review it, there just a few changes that needed to be made. They have used it with South Florida's Water Management. He said that the Cities energy savings will pay for the project over the length of term of the contract. John Chaplik asked if the City expands with their projecting population growth, presuming that their KW's are going expand naturally with the Cities population increase, how does that works in terms of the contract. Richard Suchant says they would need to take a look at that through the contract at the time and make any adjustments. Mark Veil asked if the capital layout was included in the fee. Richard said yes, it does. If the project they brought back was 1.5 million that would include all costs. John Chaplik asked if they will still get a fee if they decided to go through with this audit and the City Council says ok, they have looked at the numbers and they decide not to go through with the project. Richard said that through the Department of Management Services they do not allow them to collect a fee. They have had arrangements with the Department of Corrections where they said they understood the time that was invested and they were paid based on what they felt was a reasonable fee, but legally there is no way for them to collect that fee. That is why it is important that they do a lot of their work up front with everyone involved, this way everyone is clear and they don't have to hit that stage where people are not interested at that point. Tracey from Chevron added, their contact was to protect the agencies. But they wanted to make sure that the City understood that there are going to be an extensive amount of time that the engineers will go through the buildings and look at all the systems. They are going to invest a great deal of time and they want to make sure that if they do what they said they are going to do, Budget Oversight Committee Meeting Minutes Page 5 and they meet all the requirements and expectations, there is a type of agreement that they would move forward with the project. The City can pick and choose the Energy Conservation Measures (ECM) that they want as long as that includes the package. She wants to make sure that everyone discusses it, everyone is comfortable with performance contracting and if they bring back a project, the City will move forward to implement. They don't want to be doing pre audits for every one which they never do. Usually when they do an audit, everyone implements it. She said South Florida Water Management was a prime example. John Chaplik asked if there are any other companies like FPL that does energy audits and what does Chevron do above and beyond an FPL audit. Richard says Chevron brings a great experience in alternative energy and they are experts in Solar. Chevron is vendor neutral; they are not part of any utilities company, they look at the energy costs. Chevron is experienced in the energy business, it's very in depth and that's what they bring to the City of Palm Beach Gardens. Jack Doughney gave a brief introduction about Dan Clark, the City Engineer, a case study on the multi - million dollar project they just completed on the expansion of Burns Road which was funded predominantly by impact fees and how these real life experiences just took place in the last 12 to 18 months and then he closed with a PowerPoint update that they shared with the council as to what staff has been doing and how they represent 12 different interests from water conservations through fleet management. Dave Clark says three or four years ago they started the remodeling, rehabilitation and expansion of Burns Road Community Center. They started with the Senior Center Building, taking it down to the block wall and then rebuilding it. Incorporating every possible improvement that they could to enhance energy and the use of the building so you will find a lot of energy savings incorporated into the building from the roofing installation, the air conditioning for the facility as well as improvements to make it more functional such as network cabling in numerous places within the building so they could use it for teaching and training facilities, adding a new pool, new play area and in the larger building they added a new gymnasium, a new locker room and made improvements to the rest of the existing building. Dave says there are things left to do there, built as they go into theses facilities, they are looking for upgrades in every fashion to help improve the lighting system, the heating system and the cooling system. They spent a huge amount of time and energy with Charlotte their Recreation Director talking about the lighting that had to go into the gym and they changed out the lighting in the old gym doing everything to maximize the lighting in the playing area and minimizing the energy cost. They eliminated some windows in certain areas because they were concerned about heat gain from those windows and made changes to the glazing to make it more green. Mike Morrow, public works director says every building has an opportunity to save and conserve energy. Their Building use ranges from office to meeting spaces and recreation centers. FPL did conduct an energy audit for the buildings and found an opportunity to increase energy savings. Their plan is to set target goals for specific efforts to review the Budget Oversight Committee Meeting Minutes Page 6 perimeters and determine savings. Prioritize the plan based on mid term and long term implementations and then sustain the plan for measurement update. The energy management system that they currently have operates mechanical electrical systems throughout City Hall, Police Department, Fire Station and some systems at Burns Road. The Energy Management system also allows real time monitoring so they can turn on and off equipment remotely and let it run more efficiently. Their goal for this past fiscal and the current fiscal year is they have installed motion sensors in janitorial closets, electrical rooms, assessing motors and control operations for variable speeds. They are reviewing operations for parking lot and landscape lighting. They have done the night time set backs for temperature controls in the buildings when they are not occupied and they have also installed timers on water heaters for night time operations. They turn off lights in common areas and in areas where they have manual thermostats. All new and replacement vehicles that were purchased in the past fiscal year, and new purchases on will be smaller and more efficient vehicle types. The savings that they realize in doing this and having more energy efficient vehicles, they are trying to gain that through increase fuel mileage. They can reduce energy consumption officially without affecting the building or program function for employee comforting. FPL is willing to assist the City and review for further cost savings measure which they have done and that is their intension. John Chaplik asked Allan Owens if he's looking for a recommendation from the Budget Committee at the present time. Allan responded yes, that is what they are looking for. A recommendation or consent from the committee to move forward with the energy audit. John Chaplik says he is all for saving energy and this is the type of thing they can do for the City with cutting expenses and not services. But personally he would like to see Chevron comes back to Allan and Mary with some real numbers for the capital projects and return on investments and note that these savings are real and verifiable going forward and working with staff. Jack wanted to summarize that he feels the staff works on this day to day and that there is more to be done and they need partners. He thinks they make efforts day to day as they run their operations, many of them have an oversight over 60 or 80 individuals and they don't have the time to dedicate solely to these investigative analysis nor does the Finance Department or the lien staff. They don't have time for a cost benefit analysis on every generator applications that could cost $300,000.00/$400,000.00 especially as they harden buildings. But day to day, if you look at the Capital Improvement budget, it is vast and every effort they can make to save here and there and have this whole blue print where to go in the future, they thought it was important enough to take the time to bring it before the committee but they cannot give the City a hard cost until they do the analysis. Harvey Goldberg asked Jack, is it his and the staff s recommendation to move forward with Chevron. Jack says yes, he feels comfortable that he and Allan are on the same page and that the analysis will be worth while. Without full legal review they feel the intent will be very meaningful and that they would try to implement all these things, they will not be sighing a contract that they will be obligated to implement a program. This he says is on every Capital Improvement Program. Once they get the documents and the legal review, their true intent is to save these dollars. They are not trying to have them waste time and energy to do the analysis. Harvey Goldberg asked Jack if he had looked at the work they have done in other Budget Oversight Committee Meeting Minutes Page 7 municipalities. Jack says they have not done any procurement through diligence which Dino DeRostaing their purchasing agent would go through before they take it to Council. Mark D. Veil asked Jack how he would evaluate spending a million and a half dollars over a 3 or 4 year period to implement all theses improvements to get the long term savings. How would he evaluate that verses some program internally where the improvements does not go along. Jack says the planned ones are the easiest ones. They find a way to measure the success. Because they are vendor driven, they are not as good as the ways to measure the successes. Mark asked Jack if they purchased something energy related, is Chevron involved. Jack says they would be, they would take a look at the higher capital improvement programs, they would outline the next five years as to what they are going to buy and then make those recommendations. He said that they are on this energy movement, based on the Council's direction, they are making tough changes but it is tough to downsize a crew leader's bull -dozer and this is not what someone in the construction world wants to see done, going to a little bob -cat bull -dozer because it has more efficiency. They had an in- efficient operation fleet which they have been auctioning off which has been very successful. John Chaplik asked Allan Owens if he felt comfortable moving forward with this. Allan said yes, he thinks this is the necessary first step. As been mentioned, they need to do the audit but it could have and would have a significant impact on their capital plan for next year and looking at the timeline, the March/April deadline is going to coincide directly with the 2007/2008 budget process. As Jack said, they wanted to bring it before the committee because it will be a significant component of next year's budget process. Allan says he felt comfortable going to the next step which is the energy audit. John Chaplik asked if that's the consensus of the committee that they are comfortable going through with the next step. They all agreed. John Chaplik thanked the Chevron Team for their presentation. III. Approval of Minutes Before moving forward, John Chaplik asked if there were any corrections to the minutes of the September 5, 2006 meeting. John said there were two minor corrections on page 2, first paragraph in the middle, it has Jim Chaplik, should be John and also the name Pfizer and Mertz, should be Pfizer and Merck. There were no other corrections to the minutes. Allan said those changes will be corrected. Motion for approval of the minutes was granted. John Chaplik Yes Harvey Goldberg Yes L. Marc Cohn Yes Harvey Goldberg Yes Mark Veil Yes IV. Items for Discussion Budget Oversight Committee Meeting Minutes Page 8 John Chaplik said he only had one house keeping item. He said generally they are meeting the 0 Thursday of each month at 8:30am and being that they have new committee members, was everyone comfortable with that time. Allan said he had some proposed dates for next year and a brief slide show he would like to show and put up projected dates for next year. John Chaplik said one of the things he asked for, is that he knows that they are all financially literate but there is a learning curve for the City budget and he asked Allan and Mary Anderson to give a brief presentation about some of the things they do and some of the items in the budget. Allan Owens said he wanted to thank the committee for allowing the Chevron group to present their presentation first. In speaking to John a week ago, after they prepared the initial agenda he had asked him to give an overview of some of the budget and accounting system here in the City. He wanted to start with the actual duties set forth and resolution 121 -2004 of the Budget Committee then (1) Review the proposed operating capital improvements budget (2) and request or review any information from staff to analyze the operating capital improvements budget. This is open to the Committee, anything that they want to ask for to be reviewed. That was part of their charge in analyzing the proposed budget. Ultimately, he said the goal of the committee is to make a recommendation to the council as to approval of the proposed operations Capital Improvements Budget. In the agenda packets he handed out, he included a copy of the current years Budget Advisory Committee Report and his responses to the Committees recommendation which is also available online at www.PBGFI.com. The current management report was also included. This will give an idea on the types of recommendations that the committee has recommended to staff, as well as their position and responses to those recommendations. Just an overview of the budget itself, the main fund is their general fund that accounts for anything that is not accounted for in one of the other funds. As far as the other funds, they have special revenue funds. These are funds that the revenues are generated for a specific purpose. A recreation special revenue fund, a golf special revenue fund, gas tax, a police training fund and an Internal Service fund which is their fleet replacement and maintenance fund. This is the fund that is accounted for like a normal business, full accrual basis. The revenues are from charges to all the using departments. You also have the Capital Projects funds, these are mainly impact funds such as Police Impact, Fire Impact, Recreation, Road and Art and Public places. There were also two other capital projects funds, The PGA flyover fund and this fund is use to count for the annual maintenance and debt service. The Burns Road fund which is basically complete, now they are paying debt service. One small aspect he said was a traffic signal that remains to be done. This counts for the debt service that was associated with the Burns Road Improvements. There were also funds that were not budgeted for. The Fiduciary Fund, Police Define Benefit Fund, Fire Define Benefit Find and a General Employees Benefit fund which is closed to general employees. As far as the Budgetary procedures, copies of the finance policies and procedures manual were included in the packages that were handed out to each member. This he would go into more details on the phases he presented on the slides. The budget strategy phase, this starts with Council direction. They set the tone for the budget, they define the overall goals for the City and within that frame work, the department derives their specific goals and objectives to achieve the Council's policy and agenda. The next phase was the assessment phase, this was basically the department analyzing the operations and the overall goals that the council Budget Oversight Committee Meeting Minutes Page 9 sets, reviews any opportunities for cost savings, reviewing staffing levels that are necessary to achieve those goals and objectives. The next phase was the number crunching phase, which is their development phase where in finance they are projecting revenues and other things that are non - discretionary costs such as salary increases and insurance and to give guidelines to the departments when they are developing their budgets. The departments would then submit their requests after getting the information relating to those un- controllable costs which they will develop their own spending plans and their non - discretionary items. Then you had the review phase. This is where they sit down and meet with each department head and find what they feel is necessary. Then you had the adoption phase. This is where they present information to Council, any workshops and the two public hearings that are required under the State Statue. Generally these are in the month of September. The monitoring phase which was not apart of the adoption process. Throughout the year, Allan and Mary meet with the departments on a quarterly basis as they prepare monthly expenditure budget reports, provide these to each department heads monthly and prepare quarterly financial reports to council. These meetings will help them to keep on target and if they have to address any items they will prepare for budget amendments and try to do it quarterly to bring to Council. A summary by the funds that he mentioned of all total revenues, dues and sources, expenditure uses the total budget for all funds for 2006 -2007 was about 102,000.00. Looking towards next year's timeline for 2007- 2008, they generally start around the beginning of March distributing their information to the departments. During that month of March the departments will be preparing their budget requests, March into April will be the review process of the budget they submitted. Then they will start working on preparing budget documents. By July 1, 2007, the Property Appraiser has to notify the City of the preliminary assessed value of the total property evaluation of the City. This information is taken in to finalize the projected mileage rate, proposed budget documents and is submitted to Council. By June 0 they do receive a preliminary notification from the Property Appraiser. Around the middle of July the Council will set the tentative mileage rate. Then they will have until the end of July to notify the Property Appraiser what proposed operating mileage rate is. During the budget hearing process, the rates can be reduced but the rates cannot be increased at that point. The required public hearing which is the first meeting in September and the second meeting in September is when they finalize the ordinance adopting the budget and the resolution adopting the mileage rate. Martin was not present at this meeting but he wanted Allan to give each member an article from the New York Times which was included in the agenda package. Harvey asked Allan if he could get back with him on any conflicts with the assigned meeting dates. John Chaplik gave the committee an over view as to what they do within the Committee. He also discussed the funding situations for the pensions, the under funding status of the pension plan, the various salaries with this City versus non comparable Cities, reviewing the five year project spending plan and slowing down on the growth of the City. Any item in the Capital budget that any of the committee members wanted to bring forward, they will go through Allan. Allan would then put the items on the agenda. John Chaplik asked that the new committee members take a look at a few recommendations from last year that Allan had included in the Agenda package and get a feel as to what they do. He also asked them to keep in the back of their minds that when they expanded the Committee, they suggested having a government audit Committee. He Budget Oversight Committee Meeting Minutes Page 10 knows that a few members are experienced auditors and this is one of the projects they spoke about this year. John asked about the Fireman pension meeting that John, Martin and Allan attended. The Fire department had agreed to go back and review the assumptions and come back to the Fire board with new recommendations. John spoke about employees going into the Florida retirement system which Police and Park can also go into. He said there is a question of equity. You have a large unfunding now and you're sticking future tax payers down the road 20 -30 yrs. You want to have equity between current tax payers and future tax payers. Allan spoke about some of the Police Officers wanting to change some of the benefit provisions within their pension plan and increase benefits. He said this will cost the City a lot more money to make up the service cost if they change their assumptions and make them more realistic and the Fire department had the same problem as well. Allan thought they should give the new members a copy of the report that they drafted and sent to Council on the pension. Also one of the recommendations that they had was the Firm that audits the City should also audit the pension plan rather than relying on third party recommendations. Budget Oversight Committee Meeting Minutes Page 11 John Chaplik, Chairperson Hdrvey ldb rg, Vice Chairp Martin Cohen, Committee Member Attest: Tay. ttjL) NOTE: These summary minutes are prepared in compliance with 286.011 F.S. and are not verbatim transcripts of the meeting. A verbatim audio recording is available from the Office of the City Clerk. All attachments on file in the City Clerk's office. Budget Oversight Committee Meeting Minutes Page 12