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HomeMy WebLinkAboutAgenda BOC 082312AGENDA CITY OF PALM BEACH GARDENS BUDGET OVERSIGHT COMMITTEE Thursday August 23 , 201 2 , 8:3 0 AM CITY COUNCIL CHAMBERS I. CALL TO ORDER II. PLEDGE OF ALLEGIANCE III. ROLL CALL : Regular Members Phillip Woodall Chair Bernard Pettingill Vice -Chair L. Marc Cohn Regular Member Marilyn Lew -Jacobs Regular Member Mark Marciano Regular Member IV. ADDITIONS, DELETIONS, MODIFICATIONS V. APPROVAL OF MINUTES: 1. J uly 2 6 , 2012 VI. ITEMS BY COUNCIL LIAISON VII. ITEMS BY STAFF LIAISON : 1. FY 2013 Budget Update 2. Finalize committee report VIII. OLD BUS I NESS IX. NEW BUSINESS X. COMMENTS BY PUBLIC XI. COMMENTS BY THE BOARD XII. ADJO U RNMENT CITY OF PALM BEACH GARDENS PROPOSED OPERATING & CAPITAL IMPROVEMENTS BUDGET Budget Oversight Committee August 23, 2012 Public Safety Pensions Police Pension First reading of Ordinance was on August 9, 2012 Recommended revisions: 2.75% multiplier No COLA Pensionable earnings to include only base pay Maximum benefit 75% of average final compensation Retirement age 59 with 10 years of service Eliminate 20 years of service and out provision Public Safety Pensions Police Pension Final Actuarial Impact Statement received August 15, 2012 Actual savings is $606,000 Savings would have been more; however, the following changes have been made since last year’s analysis was done:  Payment on the Unfunded Liability has increased about $300,000 The investment return assumption has been lowered by .1%, increasing the contribution about $100,000 Final reading of Ordinance is scheduled for September 13, 2012 Public Safety Pensions Fire Pension Agreement was approved by Council on May 3, 2012 Recommended revisions: 3% multiplier COLA reduced from 3% to 1.5% Pensionable earnings exclude overtime Maximum benefit 75% of average final compensation $500,000 Chapter 175 money will be used to reduce City’s contribution Ordinance was prepared and taken to Council on July 12, 2012 for first reading Public Safety Pensions Fire Pension IAFF filed grievance over language regarding overtime prior to first reading City’s labor attorney filed complaint with Public Employee Relations Committee, who ruled in City’s favor and gave IAFF 20 days to respond On August 21, IAFF attorney sent a letter to City stating they were withdrawing their objection to the Ordinance Second reading is scheduled for September 13, 2012; however, final impact statement must be done prior to the second reading Property and Casualty Insurance City had been notified of a 13% increase in Property, Liability and Workers’ Compensation coverage from PGIT, from approximately $1M to $1.1M City requested quotes from following insurance programs: Arthur J. Gallagher PRM FMIT Property and Casualty Insurance The lowest overall quote was from FMIT for $988,000, which is about $120,000 less than PGIT renewal However, FMIT quote for Workers’ Compensation was first dollar coverage, which will save $175,000 that was budgeted next year for our deductibles Total savings = approximately $295,000 What’s Next? Final adjustments to line -item budget are being made; estimated date to post on website and distribute to Council and Committee is August 31, 2012 Committee report distributed to Council First public hearing and budget presentation set for September 13, 2012, at 7 PM, in the City Council Chambers Committee presents their report to Council This date and time will be published on the Notice of Proposed Taxes to be sent by the Property Appraiser in August Advertise Budget Summary and Notice of Hearing Final hearing will be held on September 20, 2012, at 7 PM, in the City Council Chambers Questions? Reserves Use Amount Beginning Unassigned Reserve Balance $22,004,127 Projected Revenues in Excess of Expenditures 15,014 Ending Unassigned Reserve Balance $22,019,141 Note: Pending the resolution of the IAFF pension issue, Unassigned Reserves could be reduced by up to $1M Budget Summary Total All Funds - $115,109,200 BEGINNING ENDING FUND BALANCE REVENUES EXPENDITURES BALANCE GENERAL FUND 25,653,723 $ 65,624,369 $ 65,609,355 $ 25,668,737 $ SPECIAL REVENUE FUNDS Gas Tax 815,600 774,000 1,205,538 384,062 Recreation 768,336 3,168,803 3,746,380 190,759 Golf 315,668 1,574,200 1,488,293 401,575 Police Training 25,340 12,400 12,000 25,740 TOTAL 1,924,944 $ 5,529,403 $ 6,452,211 $ 1,002,136 $ INTERNAL SERVICE FUNDS Fleet Maintenance 476,418 2,354,763 2,409,053 422,128 Self-Insurance Fund 2,816,376 7,402,000 6,613,250 3,605,126 TOTAL 3,292,794 $ 9,756,763 $ 9,022,303 $ 4,027,254 $ CAPITAL PROJECT FUNDS Recreation Impact Fee 632,428 545,235 1,100,000 77,663 Police Impact Fee 176,919 74,650 130,000 121,569 Fire Impact Fee 58,216 79,245 10,000 127,461 Art Impact Fee 838,400 150 - 838,550 Road Impact Fee 752,978 168,983 700,490 221,471 TOTAL 2,458,941 $ 868,263 $ 1,940,490 $ 1,386,714 $ GRAND TOTAL 33,330,402 $ 81,778,798 $ 83,024,359 $ 32,084,841 $ SUMMARY OF ALL FUNDS REVENUES/SOURCES AND EXPENDITURES/USES Summary of Budget General Fund operating and capital expenditures total $65,609,355; decrease of almost 1% from current year total of $66,059,975 General Fund revenues total $65,624,369; increase of 2.2% from current total of $64,168,283 Summary of Changes in Total Property Valuation FY 2011/12 Total $7,764,780,280 Market Value 92,381,293 1.2% New Construction 55,258,121 .7% Net Change 147,639,414 1.9% FY 2012/13 Total $7,912,419,694 Proposed Millage At the July 12, 2012 Council meeting, Council approved Resolution 57, 2012, setting the tentative maximum operating rate at 5.7404, which is 1.19% above roll - back rate of 5.6729 Debt service rate was set at .1790, down from .1821 Total rate is 5.9194, down .05% from current year rate of 5.9225 As per Chapter 200.065 Florida Statutes, these rates may be lowered, but not raised during public hearings Effect on Typical Property Owners Annual Taxable Value Current Rate Proposed Rate Increase (After $50K Exemption)5.9221 5.9194 (Decrease) $200,000 $1,184.42 $1,183.89 -$0.53 $300,000 $1,776.63 $1,775.83 -$0.80 $400,000 $2,368.84 $2,367.77 -$1.07 Assumes no change in taxable value. Homestead properties will increase by 3%, if the market value exceeds the taxable value by at least that amount. Summary of Significant Items Freeze longevity for PBA and IAFF at current levels; no future increases (all other employees’ longevity was frozen effective 10/1/2011) – saves about $62,000 annually Cap Conversion of Leave at 100 hours per fiscal year for IAFF (all other employees have already been capped at 80 hours) – saves about $69,000 annually Eliminate VEBA contributions – saves about $450,000 annually Revised public safety pensions to achieve future savings – saves about $2M annually Budget Advisory Committee 1 Report to the City Council 2 August 2012 3 4 5 The Budget Advisory Committee is pleased to present a summary of comments and 6 suggestions for Council’s consideration for the fiscal year 2013 Budget. 7 8 The committee continues to have a good working relationsh ip with the staff and council 9 liaison, Vice Mayor Mr. Bert Premu roso. They have been very responsive to any 10 questions or suggestions posed b y the committee . The City is fortunate to have a staff that 11 is very knowledgeable and has the experience to make hard decisions that are in the best 12 interest of the residents of our City. 13 14 We congratulate the City, F inance Administrator, Allan Owens , and h is staff for 15 receiving the GFOA ’s Distinguished Budget Presentation Award for the fiscal year 16 beginning October 1, 2011. This award is the highest form of recognition in 17 governmental budgeting. In addition to receiving this prestigious award, the City’s 18 bu dget received special recognition as an Outstanding Communication Device, Special 19 Capital recognition and Special Performance Measures recognition. This is a significant 20 achievement for the City of Palm Beach Gardens and its residents. 21 22 The committee is pl eased to note that rea l estate values in the City of P alm Be ach 23 Gardens have begun to s tabilize . The Certified Property Valuation received from the 24 Palm Beach County Property Appraiser of $7.9 billion reflects a slight increase in 25 property values of 1.19%. With the improv ing economy, this trend should continue. S taff 26 needs to continue to monitor expenses, and seek out other available alternative sources of 27 funding. 28 29 The committee commends council action taken to adopt a more detailed policy for the 30 level of and use of the monies in the reserve fund. It is the goal of the City to achieve and 31 maintain an Unassigned Fund Balance in the General Fund of not less than 17% of 32 expenditures. The City currently has $21 million in unassigned reserves which equates to 33 32% of expenditures . The committee recommends that we continue above the minimum 34 threshold of 17%, due to the financial crisis that we have just experienced. Although our 35 City and Northern Palm Beach County is poised for economic growth, we must be good 36 stewards of the monies that have been en trusted to us. 37 38 The committee supports the announce ment by the City Council that the property tax rate 39 will remain unchanged at $5.74 for each $1,000 of assessed value . The City is now 40 starting to see new residential and commercial development, which will increase 41 revenues. We are also having new industry and busi ness come into the City, which will 42 maintain the quality of life that we are accustomed to. 43 44 Formatted: Numbering: Continuous The committee re commends staff and council communicat e to the residents of the City 45 about the budget meetings for the proposed budget. Although we are seeing impro vement 46 in the economy, we must continue to reach out to the residents for their input. 47 48 We support the City Council and Staff for their recommend ed changes to the police and 49 fire contracts. Recommendations have been made due to the concern over the 50 sustain ability of the contract’s liability that has become a significant factor in the City’s 51 finances. T h e committee r ecommends that the negotiations result in relief in the rate of 52 growth of both salaries and benefits and pension that will help to reduce the co sts of these 53 major line items to the city. Although these are extremely hard decisions that must be 54 made, they are necessary to insure that future benefit s promised to our public safety 55 employees can be made without unduly taxing future generations. 56 57 The committee suggests that the continued reliance on ad valorem taxes to provide the 58 revenue necessary may no longer be prudent. The state mandates a maximum millage rate 59 of 10.0 and the city is now almost 60% of the way towards the maximum. Therefore a 60 discu ssion of alternative revenue sources sho uld continue by looking to fees for waste 61 collection, utility tax, increasing communications service tax, all of which now are 62 additional components of the revenue side of the budgets of most all of our neighboring 63 c ommunities. By considering such fees as revenue sources, Palm Beach Gar dens would 64 still be among the least taxed jurisdictions in the county. With the prospect of 65 expenditures rising, even just at the rate of inflation, this will put an excessive burden on 66 the ad valorem tax which the committee recommends should be shared by other usage 67 fees. The committee recognizes that the city has taken steps to diversify its revenue 68 sources in a couple of ways. The Northern Regional Communication Center is a cost 69 shari ng arrangement as its responsibility has expanded to include not only the City of 70 Palm Beach Gardens but Juno Beach and the Town of Jupiter and those jurisdictions pay 71 a fee toward covering operating and administrative costs. The Fleet Maintenance facility 72 now provides fleet maintenance services to Juno Beach vehicles and collects a fee for 73 doing so which provides monies towards the coverage of overhead and administrative 74 costs in this area as well. 75 76 The advisory committee agrees with the city council deci sion to increase the 77 communications tax. The advisory committee had recommended an increase to 5.22%. 78 The city council chose an increase not as significant which is understandable however the 79 advisory committee hopes that the city council will revisit this decision in future years. 80 Due to the fact that the City generates approximately 79% of ad valorem taxes through 81 residential assessments, t he overriding concern is the need for alternative revenue sources 82 so that the city will maintain its stellar bond rating. The budget advisory committee 83 recognizes that there is a need to constantly evaluate the budgeted expenditures for 84 services the city provides its citizens. When there are limited resources, the guidelines 85 used in the evaluation must insure that ser vices provided benefit the entire city. One of 86 the expenditures that may not meet those criteria i s the storm water management and 87 maintenance expenditure for the center city area. Those who live outside that footprint, 88 which is west of Military Trail, are in fact taxed twice for the service. The area west are 89 communities that fall under the jurisdiction of the North Palm Beach County 90 Improvement District and are taxed by the Improvement District for the storm water 91 management and maintenance and also pay t axes to the city for similar services. Another 92 expenditure that should be considered for taxing directly to the residents is the cost of 93 trash collection which currently is covered through general revenue receipts . The 94 committee recommends a review of this and similar expenditures that could be taxed 95 directly to only those citizens that benefit from these special services. The city should be 96 commended for taking the initiative to enhance its cost sharing arrangement by offering 97 the services of the Northern Regional Communication Center and its fleet maintenance 98 services to nearby local jurisdiction. Hopefully these and other services of the city can be 99 expanded to increase the cost sharing benefit to the city. 100 101 In summary, the city is in prime position to expand tax revenues by the addition of new 102 businesses in the city, which should aid in reducing the burden on ad valorem taxes. Last 103 year's increase in the communications tax was aimed at diversifying the tax revenue side 104 of the equation. This year, the city's efforts at renegotiating the fire and police pensions 105 were a cost reduction on the spending side. The BOC has agreed with staff on both of 106 these issues. Future efforts to increase business tax revenues due in part to the city's 107 efforts at enticin g new businesses to relocate to our city is something the committee has 108 heard fr om staff and the city council, and may be a topic for future discussion by the 109 committee . 110 111 It has been a pleasure to serve on the committee, and we are very fortunate to work with 112 Vice Mayor Bert Premuroso, and the finance administrator and staff. We welcome your 113 comments on information presented. 114 BUDGET OVERSIGHT COMMITTEE MEETING PAGE 06 -28 -12 1 CITY OF PALM BEACH GARDENS 1 BUDGET OVERSIGHT COMMITTEE 2 REGULAR MEETING 3 June 28 , 201 2 4 5 I. CALL TO ORDER 6 The regular mee ting was called to order at 8:30 a .m . by Chair Woodall . 7 II. PLEDGE OF ALLEGIANCE 8 III. ROLL CALL 9 PRESENT: Chair Phillip Woodall, Vice -Chair Bernard Pett ingill, L. Marc Cohn, Ma rilyn Lew -10 Jacobs, Mark Marciano (arrived at 8:53 a.m.). 11 ABSENT: None. 12 ALSO PRESENT : Vice Mayor, Council Liaison Robert Premuroso; Finance Administrator, 13 Staff Liaison Allan Ow ens; Deputy Finance Administrator , Alternate Staff Liais on Mary 14 Anderson -Pickle. 15 IV. ADDITIONS, DELETIONS, MODIFICATIONS 16 None. 17 V. APPROVAL OF MINUTES 18 Committee Member Cohn made a motion to approve the May 17, 2012 Minutes. 19 Vice Chair Pettingill seconded . 20 Motion passed 4 -0. 21 VI. ITEMS BY COUNCIL LIAISON. 22 Vice Mayor, Counc il Liaison Robert Premuroso . 23 None. 24 VII. ITEMS BY STAFF LIAISON. 25 Finance Administrator, Staff Liaison Allan Owens . 26 FY 201 3 Budge t Update. 27 VIII. OLD BUSINESS 28 None. 29 IX. NEW BUSINESS 30 None. 31 X. COMMENTS BY THE PUBLIC 32 None. 33 X I . C OMMENTS BY THE BOARD 34 None. 35 36 37 38 (The remainder of this page intentionally left blank) 39 40 41 42 43 44 45 46 47 48 BUDGET OVERSIGHT COMMITTEE MEETING PAGE 06 -28 -12 2 X I I. ADJOURNMENT 1 Chair Woodall made a motion to adjourn the meeting . 2 Committee Member Cohn seconded. 3 Motion passed 5 -0 . 4 Chair Woodall Adjourned the meeting at 8:54 a.m. 5 6 APPROVED : 7 8 9 10 11 12 Phillip Wooda ll, Chair 13 14 15 16 Bernard Pettingill , Vice Chair 17 18 19 20 L. Marc Cohn 21 22 23 24 Marilyn Lew -Jacobs 25 26 27 28 Mark Marciano 29 30 31 32 33 ATTEST : 34 35 36 37 38 Donna L. Kramer 39 Municipal Services Coordinator 40 41 42 43 NOTE: These minutes are prepared in compliance with 286.011 F.S. and are not ver batim transcripts of 44 the meeting. A verbatim audio recording is available from the Office of the City Clerk. 45 All referenced attachments on file in the Office of the City Clerk . 46 47 48