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HomeMy WebLinkAboutMinutes BOC 032207BUDGET OVERSIGHT COMMITTEE March 22, 2007 MINUTES The Budget Oversight Committee met on March 22, 2007, in the Council Chambers of the Municipal Complex, located at 10500 North Military Trail, Palm Beach Gardens, Florida. The meeting was called to order by Harvey Goldberg, Chair, at 8:35 AM. I. Roll Call Members Present: Harvey Goldberg — Chair L. Marc Cohn - Vice Chair Martin Cohen - Committee Member Mark Veil- Committee Member John Chaplik — Committee Member Also Present: Hal Valeche - Council Liaison Allan Owens - Finance Administrator /Staff Liaison Mary Anderson - Pickle - Deputy Finance Administrator II. APPROVAL OF MINUTES: The minutes from February 22, 2007, were approved unanimously, 5 -0. M. UPDATE ON PROPOSED LEGISLATION: Mary Anderson - Pickle, Deputy Finance Administrator, gave an update on the proposed legislation. The House Property Tax Proposal, House Bill 7.001, would recalculate a newly defined roll -back rate for municipalities and local governments beginning on; October 1, .2007. The proposal would establish 2000 -2001 as the base fiscal year and: recalculate a proposed roll -back rate for 2007 -2008 and thereafter by using a CPI (consumer price index) put out by the state. A supermajority vote of the governing authority would be required to deviate from the proposed roll -back rate. Preliminary, estimates indicate this would result in a 44% or 22 million dollar reduction in the property tax revenue for Palm Beach Gardens. There is a proposal for voters to increase' the state sales tax from 6 to 8 -1/2 cents in exchange for an elimination of all property. taxes on Homestead property. There are five major components to the House Minority. Proposal. There is a new roll -back provision which would apply CPI (consumer price index) plus 3% creating a homestead exemption of 50% of the median county home value if greater than the Save Our Home differential. It would provide exemptions for non- homestead residential equal to 25% o of the county median value of like properties. It would also provide exemption for commercial property of 25% for the first 1 million dollars in value and would provide and additional 1 cent sales tax to fund the plan. Governor Crist proposed a required local referendum in each county and city to increase the Homestead Exemption from $25,000.00 to $50,000.00. Palm Beach Gardens would lose an estimated 1.9 million dollars in tax revenue under this proposal. Budget Oversight Committee Meeting Minutes 032207 Page IV. 2007/2008 BUDGET STATUS: Mary Anderson- Pickle, Deputy Finance Administrator, gave an update on the budget status. The budget packets were distributed to the department directors and are due back by April 9, 2007. They have been instructed to proceed with their budget planning in the usual fashion. Once the budgets are returned, the drafts will be reviewed from April 10th to May 1 't. During May the Finance Department will be balancing and preparing the draft documents. From May 28th to June 22" Finance will prepare the budget presentation and message. Then preliminary assessments and evaluations are received from the County and line item books are prepared to distribute to Council and Committee members. From June 25th to the first week in July the Finance Department will finalize the revenue budget after final receipts from the County. The budget will tentatively be presented to Council on July 19th. In August there will be resident information meetings or Council workshops. In September the two required public hearings will take place. V. INITIAL RESULTS OF OPEB STUDY: OPEB — Other Post Employment Benefits. Statement 45, issued in June 2004, requires these benefits be accounted for on an accrual basis. This includes post - employment healthcare which retirees currently pay the same rate as employees. The cost to the City is due to the fact that retirees use healthcare at a higher rate. A report prepared by Bolton Partners calculates the initial expense for the year beginning 10/1/07. Statement 45 does not require this be funded; however, the liability would continue to accrue. Allan Owens, Financial Administrator, feels that the City should fund this liability. It is not required to be implemented until the fiscal year 10/1/08. Allan feels the City should consider implementing this on 10/1/07. The unfunded liability . is not technically required to be funded but Allan would like the Board to take under consideration designating 2.1 million dollars from the undesignated fund balance. The City's audit report indicated that there are 2.8 million dollars in additional funds to place into a trust to fund the unfunded liability. The Bolton reports are being finalized. A copy of the report will be distributed to the Committee and Allan offered to have Mr. Bolton come in to discuss the report with the Board and they agreed with this. VI. UPDATE ON SELF - INSURANCE PROGRAM: Allan Owens, Finance Administrator, gave an update on the City's Worker's Compensation Program. Currently the City is paying $800,000.00 in premiums. Allan has asked PIGIT (Preferred Government Insurance Trust) to research options for self - insurance. Currently the covered payroll is $31,000,000.00 with a deductible of $75,000.00 per claim. PGIT has come back with two options. They are both self - insured options. The first would be utilizing a deductible of $100,000.00 per claim and the next a deductible of $200,000.00 per claim. Allan gave the Board examples of how the self - insured retention program would save the City significant amounts in premium payments. Under self- insurance the City is acting as the insurance company with self - insurance claims. After reaching the self - insurance retention limit the actual insurance would kick in. The Finance Department is currently working on requests for proposals of all types of options of coverage. Allan would like the Board's feeling on this and whether they feel this plan of action is worth pursuing. Budget Oversight Committee Meeting Minutes 032207 Page 2 VII.ADJOURNMENT: With no further business to discuss the meeting adjourned at 9:53 a.m. APPROVED: Harvey oldberg, Chai e�{ G L. Marc Cohn, Vice Chair John Chaplik, Committee Member Martin Cohen, Committee Member Mark 4Veil, Committee Member Attest: Annette Tucci Municipal Services Coordinator 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 referenced attachments on file in the City Clerk's office. Budget Oversight Committee Meeting Minutes 032207 Page 3