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
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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
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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
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BUDGET OVERSIGHT COMMITTEE MEETING PAGE
06 -28 -12
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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
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APPROVED : 7
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12 Phillip Wooda ll, Chair 13
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Bernard Pettingill , Vice Chair 17
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L. Marc Cohn 21
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Marilyn Lew -Jacobs 25
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Mark Marciano 29
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ATTEST : 34
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38 Donna L. Kramer 39
Municipal Services Coordinator 40
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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
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