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
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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,
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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
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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
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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,
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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,
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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
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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
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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