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Agenda BOC 042607
CITY OF PALM BEACH GARDENS 10500 N Military Trail Palm Beach Gardens, Fl 33410 BUDGET OVERSIGHT COMMITTEE NOTICE OF MEETING AND AGENDA Please take notice that the Budget Oversight Committee of the City of Palm Beach Gardens will conduct a meeting of the committee on April 26, 2007 at 8:30 am in the Council Chambers. Roll Call II. Approval of minutes from the March 22, 2007 meeting III. Review of FY 2006 Audit Report IV. FY 2007 Mid -Year Budget to Actual Update V. FY 2007 End of year Projections VI. Update on FY 2008 Budget Process VII. Retiree Health Care Actuarial Report DISABILITY INFORMATION In accordance with the Disabilities Act and F.S.S 286.26, persons with disabilities needing special accommodation to participate in this proceeding should contact the Human Resource Department no later then seven days subsequent to the proceeding at (561) 799 -4223 for assistance, if hearing impaired, telephone the Florida Relay Service Number at 800 -955 -8770 (voice) for assistance. APPEAL NOTICE If a person decides to appeal any decision made by the board, with respect. to any matter considered at such meeting or hearing, he will need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. Introduction As the result of our reporting that the city's pension plans were under funded, the Council authorized the engagement of a consulting actuary, independent from the two plans. His report led the two plan committees to a review their respective situations. While considerable financial strengthening, in the eyes of this committee, now has been made with the Fire Fighters' Pension Plan (The police plan is still to be heard from), more ultimately will be needed and furthermore the nature of the issues needs to be better explained to the Council and taxpayers. Even though the calculations used to determine the funding of a plan are, among other things, based on "Death and Taxes" there is no certainty involved. Rather the establishment of a defined benefit pension plan, particularly a final pay plan, is an event which unleashes the "Law of Unforeseen Consequences!' Competing Interests The three involved groups, plan members, the elected representatives and the taxpayers have both mutual and competing goals. All favor having secured benefits. In theory from that point interests diverge. Plan members want to keep the contribution levels near to the lowest amount reasonable, to "reduce" the cost of benefit increases and employee contributions (if a plan is co- contributory). Taxpayers need predictability, not wanting to be "nuked" at a later date with news of a significant under funding. Legislative bodies are conscious of current budgets and tax rates so they frequently defer increases in costs. , The role of actuarial assumptions The amounts of contributions necessary to support funding are derived from a set of "actuarial assumptions." The selected actuary makes recommendations which are in turn approved by the plan committee. The actuary under current national guidelines is granted discretion within a range of reasonableness. The reasonable assumptions previously used in the fire fighters plan recently were changed to another set of reasonable assumptions and the annual contribution was increased by $600,000 (27 %). Our committee appreciates the improvement but also believes it would be more prudent to further increase the contribution by as much as an additional $300,000. Why the difference in views? There are several reasons why this committees' opinion differs from those of the respective plan actuaries and even from those of the consulting actuary. (1) Standards for governmental plans are less conservative than those mandated for private sector plans. (2) Governmental. plan actuaries tend not to see both sides of the coin equally. In the appendix to his report, the City's actuarial consultant noted in reference to the very important discount rate, that the more conservative rate applied in the private sector is not recommended because governmental bodies have the resources [taxing authority] , using our language, to bail out a troubled plan. Our recommendation We believe more attention should be given to avoiding a future major sharp increase in funding —which would present a major budgetary surprise to taxpayers. We prefer that the problem should be eliminated by taking a conservative approach, still within the range of "reasonable ". Two of the actuarial assumptions warrant immediate attention;(1) The period of time to amortize adjustments should be reduced (from 25) to about 12.5 years, which will be about one -half the expected period of remaining service for an average employee; (2) The discount rate should be close to that required in the private sector. If these two changes are made there will be a more timely correction for any assumptions which proved to be inaccurate. Our third immediate recommendation is for those in authority to consistently monitor the plans and their administration. We do not doubt the integrity and competence of the plans' respective auditors. But, these plans are an important and significant part of the City's financial structure and the City's appointed auditor should be the auditor for the plans. Council will increase its awareness because the city auditor reports directly. The City ultimately is responsible for funding the plans and it should insist on its choice of auditors. 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GUNS, ROSES AND HOSES Y Donna Amado Jerry Bergman . . . THE LAND USE PUZZLE Joel Channing ( 0 Siro DeGasperis THE THREE R'S: READING, RITING & Diane Honing RITHMETIC Nick Lioce F. 12... Phil Lyddon THE THREE O'S: OPPORTUNITY, Julie Norsworthy OCCUPATION & OUTLOOK Jeff Ornstein Jan Rausch 14... FLORA AND FAUNA Jeff Renault Carl Sabatello 16... P &R: "THE BENEFITS ARE ENDLESS " Jeff Sabin Q Bech Serra I v . . . BETTER HOMES AND "GARDENS" Milton Stern 20 ..THE H2O STORY Staff Facilitator: 22 Kim Glas, AICP o , GROWING IN THE GARDEN$$$. 24 , . WHERE DO WE GO FROM HERE? We I 6o ryie To Citv of post f he m Wh 1 0 o I SA ranted by courtesy ......_ 2 1' INTRODUCTION The purpose of this document is to present the image of the City of Palm Beach Gardens. This document addresses the long -term goals, objectives and strategies necessary to achieve that vision of the future. The document is divided into ten sections, each of which discusses one of the ten goals of the vision. What is a Visioning is the process of forming mental images; images that focus on forward and long -term thinking. It requires the faculties of figurative sight, intelligent foresight and VISION? creative thinking. It requires the ability to place the desired image within a larger perspective. It requires identifying current and future trends in all relevant areas in order to understand how the desired image will interact with all elements to which the future will be linked. It represents the values of all segments of the community. Visioning is not a comprehensive plan - it precedes comprehensive planning, but can inform and serve as a driving force in the comprehensive planning process. What is a Whereas visioning asks the question, "What is our preferred or desired image of the future ? "; the goals ask, "How do we see that vision come about ? ". Each goal GOAL? represents a part of the vision and, as such, constitutes the vision for the specific area that the goal addresses. The goals of the City's Vision are elaborated in the following pages. They are summarized below by "key phrases ": The Goals of our Vision • People, Places and Pathways • Guns, Roses and Hoses • The Land Use Puzzle • The Three R's: Reading, Riting and Rithmetic • The Three O's: Opportunity, Occupation and Outlook • Flora and Fauna • P &R: "The Benefits are Endless" • Better Homes and "Gardens" • The Hz0 Story • Growing in The Garden$$$ What is an Whereas the goals ask, "How do we see that vision come about ? "; the objectives ask, OBJECTIVE? "What components make up the achievement of the goal ? ". Objectives often break the goal down into manageable segments or parts that assist in achieving the goal. What is a Whereas the objectives ask, "What components make up the achievement of the STRATEGY? goals ? "; the strategies ask, "What specific actions or steps need to be followed to accomplish this objective ? ". The strategies outline the action plan. They become the line from Point A to Point B; the steps necessary to begin the process that culminates in Vision attainment. `\ 7 PEOPLE, PLACES AND PATHWAY' TO CREATE LINKAGES IN THE CITY WHICH CONNECT OR GATHER RESIDENTS AND BUSINESS OWNERS OF DIFFERENT NEIGHBORHOODS AND DEVELOPMENTS INTO A SINGLE COMMUNIT' () AND WHICH PROVIDE A SENSE OF COMMUNITY. &0 Jective I: To Create Gathering (People) Places in the City. lk The Vision Connection: The vision of "people places" encompasses the urban - suburban concept of areas within the City where people - residents, business owners, neighbors, or groups - may gather in an environment that through design encourages interaction and a sense of community. The purposes of the "people places" can be varied and, to varying degrees, emphasize the social, recreational or environmental aspects of gathering places. Strategies: • Create an Urban Gathering Place that is outwardly focused, pedestrian friendly, and contains some or all of the following characteristics: shade trees and flowers; plazas and fountains; music and public art. • Create an Active Sports Center Gathering Place which offers a variety of recreational amenities as well as linkages to passive areas and bike paths and offers the option of City- sponsored sports events. • Create an Eco- Sensitive Gathering Place with some or all of the following characteristics: natural environment; water activities such as fishing, canoeing and trails; nature center atmosphere /interpretive activities. Objective 2: To Create Pathway Linkages throughout the City. The Vision Connection: The idea of pathway linkages throughout the City is designed to enhance the sense of community by providing a community synergy so often lacking in modern neighborhood or development planning. Strategies: • Promote connection of neighborhoods, shopping, schools and parks through a sidewalk /pathway system. • Require the installation and expansion of the Parkway System in the City's developing areas. • Identify sidewalk /pathway needs in existing neighborhoods and plan /budget improvements. The City's meandering pathways offer the people and places linkage Objective 3: To Create A Sense of Identity that Establishes Palm Beach Gardens as a Community. The Vision Connection: Establishing a sense of identity often and easily translates to elements related to appearance. Beyond specific landscape requirements, attention to "signs of identity" through gateway signs, City functions, and neighborhood functions also contributes to a sense of community. Visual elements may also include unified street signs, lighting elements, street name signs, urban fixtures, specific types of planting materials or building colors and materials. Strategies: • Install entry features along major arterial roadways including signage, art and landscaping that identify Palm Beach Gardens as a city and community. • Promote the Parkway System as a unique characteristic identified within the City of Palm Beach Gardens. • Foster diversity in different neighborhoods and peoples as a single Community through City facilities and events, such as parks, schools, employment centers, cultural centers and festivals. • -- ;y .r�i GUNS, ROSES AND HOSES TO INCREASE THE LEVELS OF SERVICE FOR CITY - PROVIDED SERVICES AND FACILITIES WITHIN THE URBAN AREA, WHILE MAINTAINING FIS( RESPONSIBILITY. Objective I: To Attain Exceptional Level of Service Standards for Public Safety and Recreation The Vision Connection: The vision encompasses the City's dedication to protecting the Community's health, safety and welfare through appropriate levels of Police, Fire and Emergency Medical Services as well as providing appropriate levels of service in infrastructure needs and recreational services. Strategies: Poiir . • Provide sufficient space for adequate police functions. • Revise urban level of service standards (LOS) to appropriate measures - 1150 service (dispatch) calls per responding/field officer per year. • Establish urban levels of service which are high enough to cover preventative activities, in addition to response to incidents and service calls. • Review level of service standards to ensure funding to adequately prevent and fight crime, such as: LOS for proactive, preventative programs; LOS for facility space, equipment, and new technology; and LOS based on nonresidential uses (square feet) and schools, in addition to considerations based on population. POL/CIF Gardens police officer s cur iduci demonstrations with K -9. Fire • Establish a level of service for emergency medical services. • Establish appropriate fire service delivery standards to accomplish internal performance measures. • Continue an adopted level of service standard of a five - minute average response time; work toward a district average vs. a citywide average, and in the interim provide that standard to 98% of all calls. • Propose the requirement of sprinklers in all development west of the Loxahatchee Slough and encourage voluntary sprinkler installation in all development throughout the City. • Provide a fire facility to meet the demands of the western portion of the City, consistent with a rural level of service standard. 'fq Palm beach Garuens r,re Res_ ie cona_icts rescue demonstration. Recreation and Public Works • Provide park acreage and recreational facilities to meet the sports- minded community's needs. • Establish a Public Works facility to provide for infrastructure needs as well as the needs of Police and Fire services. fA The City's Public Works Department provides a varetj of senates includin,; road maintenance, landscaping, drainage, and vehicle maintenarcc All Services ♦ Provide additional funding through impact fees for police, fire, recreation and public structures, facilities and roadways. ♦ Establish a program whereby developers can donate land for public use (parks, substations, schools, etc.) in exchange for a density bonus. • Utilize approved bond monies to increase levels of service for public facilities including city hall, police and fire stations, and parks. • Encourage an increase in levels of service. At a minimum, standards should continue to be maintained via developer contributions, impact fees, grants, donations and other financial resources. Objective 2: To Establish Plans, Procedures and Policies for Emergency /Disaster Situations The Vision Connection: The vision involves recognition of the need to attain an optimal level of readiness to respond to any emergency /disaster situation. Adequate preparation and advance planning are critical elements to the activation of emergency plans. The vision incorporates the use of a state - recognized plan and pursues intergovernmental cooperation. Strategies: • Update the City's Emergency Management Plan. • Budget and procure equipment and materials consistent with the Emergency Management Plan-, ensure that all departments are prepared to undertake their assigned tasks and responsibilities. • Provide information on the contents of the City's Emergency Management Plan to residents and property owners, in advance of an emergency, so that all are familiar with pre- and post- emergency procedures, policies and activities that will be instituted by the City. • Follow code enforcement procedures or additional steps as necessary to protect rights -of -way, canal, drainage and utility easements and other facilities which may become critical for access in the event of an emergency. �7 THE LAND USE PUZ TO PRESERVE LAND USE PATTERNS AND T CURRENTLY CHARACTERIZE THE CITY. Objective l: To Control, Limit and Encourage Specific Types of Development and Redevelopment. The Vision Connection: The City's vision entails specific images of appropriate land uses that make up and are consistent with the existing development within the City. Well aware of the City's current reputation for strict adherence to consistent, quality development in the City, the vision encompasses a plan for continuation of the City's growth and development while maintaining the requirements that characterize the distinctiveness of the City. Strategies: • Restrict development to generally low- densities and intensities (no skyscrapers or continuous rows of apartments), except along 1 -95 or as needed to provide affordable housing. • Attract new businesses that enhance and maintain the qualities and characteristics of the City. • Limit new regional attractors ( "Big Box" developments). • Encourage unique neighborhoods and differing communities which serve different lifestyles and needs. • Promote cultural centers, such as museums, flower and art shows, and cultural art festivities. • Continue to promote and require streetscape programs. • Introduce commercial nodes to new residential neighborhoods to provide services within walking distances. N t� ;r :Y YPES THAT Objective2: To Encourage Integration of Development into New Neighborhoods and Livable Communities. The Vision Connection: The idea included in the vision is the encouragement of "mixed use" in the development of new neighborhoods. The concept of "mixed use" is entirely consistent with the City's vision of developing a sense of community that promotes people - gathering places, linkages and recreation services in a pedestrian friendly environment. The development of the mixed -use concept also entails planning that encourages the use of the concept of mixed use in future development. Strategies: • Develop a concept, such as a mixed -use overlay, to encourage the integration and creation of new neighborhoods, promote a mix of community- serving uses within the neighborhood, and further opportunities for pedestrian /bicycle modes of travel. • Apply the concept to the large vacant tracts in the City's eastern areas. • Implement the concept through the comprehensive plan and future land use map; designating subject properties with a residential land use category and zoning overlay. The C,tv of Paln i Beach Gardens is �. known for its attention to manaf growth and maintaining the beaut the City as it grows. Pictured her, the MacArthur Regional Cef,:: (center building is Good Samaritan anc St. Mary's Health Care Pavilion: right i! the Medical Mall Building; to the left behind the trees is the Gardens Mall. IW 11!01' oil r Ff M& Rm�wlq VERY ww i RM: RERWffi& MMIUM • OOWAERCE m4u i RADE 1 •.. WI•. K ` M OONS �MAA*-Utm-wi OTHER .- v - y At iE C] THE 3 R'S: READING, RITING, & RITHMETIC TO ENCOURAGE THE PROVISION OF QUALITY EDUCATION THROUGH WORLD CLASS CURRICULUM TO ENSURE ALL CHILDREN ARE PREPARED FOR REAL WORLD EXPERIENCES, HOLD THE NECESSARY SKILLS FOR JOBS, AND CONTINUE TO PURSUE KNOWLEDGE. Objective I: To Undertake Efforts to Encourage and Promote a Quality Educational Experience Tailored to Individual Student Needs. The Vision Connection: The vision holds in its list of attainable priorities, the promotion and encouragement of the highest quality educational services to its residents. The City will use its governmental ability to work within the existing system; to coordinate with the designated educational bodies to achieve this goal. Strategies: • Continue to promote the positive aspects of the current education system: a. Encourage the provision of diverse learning styles tailored to the learning abilities of students. b. Encourage educational opportunities and curriculum selection through magnet schools and special programs. c. Encourage the employment of quality teachers who are skilled and are devoted to enhancing the educational experience. d. Encourage the involvement of dedicated volunteers and community resources. e. Encourage diversity of the student population within each school. Encourage programs, strategies and practices that will enhance the educational experience, such as: a. Reduce the size of schools and size of classrooms. b. Encourage the selection of administrators with strong leadership and managerial skills appropriate for the educational setting. C. Ensure proper allocation of fiscal resources. d. Promote teaching to focus on basic job and employment skills, including reading and mathematical calculations. e. Promote parental and community involvement and awareness through parenting classes. f. Provide a form of school concurrency to ensure educational facilities are available when and where needed. g. Encourage vocational training as an alternative for non - college bound students. • Assume an active role in reforming the education system: a. Formulate consensus, through resident input, on the major educational issues affecting the City. b. Regularly meet with the School Board to advise them of the City's needs and recommend strategies or programs to address the identified needs. C. Assert the City as an outspoken leader for education, and call upon the talents and influence of the community to urge changes to the education system. d. Assure that all City governmental activities that impact the educational process are routinely monitored and coordinated by designated staff persons. P T i i Bead &,f oe s E;erneraw , H.gh Schooi ar ti.c of the seven public schools ;ocated :r, Palm Beach Garden WILLIAM T. DWYER' COMMUNITY HIGH SCHOOL AUK, "A MID TERM PROGRESS REPORTS J WEDNESDAY SEPTEMBER 23 p- wl I THE 30'S:OPPORTUNff7,OCCUPATION, &O TO PROMOTE ECONOMIC DEVELOPMENT IN THE CITY THROUGH THE EXPANSION OF EXISTING BUSINESSES AND THE ATTRACTION OF NEW INDUSTRY. Objective I: To Initiate Proactive Efforts to Expand the Economic Base of the City, Working within the Framework of Existing Economic Agencies and Groups. The Vision Connection: The inclusion of the City's businesses and prospective businesses is critical to the success of the vision. Inherent in the belief that the City of Palm Beach Gardens is on the cutting edge of quality, is the understanding and knowledge that such a designation cannot be achieved or maintained without the assistance of quality businesses located in the City. Toward that end, the vision includes an emphasis not only on the attraction of new businesses to the City, but also the retention of existing quality businesses in the City. Strategies: • Develop a unique economic development program that will distinguish Palm Beach Gardens from the rest of Palm Beach County. • Create a City Economic Development Advisory Board that will develop an economic development plan to serve as a basis for an Economic Element of the Comprehensive Plan. • Initiate a public - private venture to pre- approve a goods - producing employer or corporate headquarter campus. • Expand existing industries and business clusters. • Identify and pursue new business clusters that are compatible with the City's desired vision. • Develop an understanding of existing business concerns. • Improve communication and forge alliances with major property owners in order to coordinate efforts in attracting new business to the City. Objective 2: — To Provide a Framework for Quality of Life Factors Important in Business Relocation Decisions. The Vision Connection: The key issues considered by businesses seeking to relocate are the quality of life factors that the City of Palr Beach Gardens is in a position to offer and promote. In addition to conducting an asset inventory to be used in promoting the City to prospective business, the vision requires that the City examine all processes to determine where positive adjustments can be made toward the end of attracting and retaining quality businesses. Strategies: • Recognize the City's assets and liabilities and come to a consensus on what the City offers that attracts /discourages business locations /relocations. • Reduce relocation time by accelerating the development approval process, where possible, by revising comprehensive plan policies and land development regulations. • Maintain a high level of quality in the provision of services. • Monitor /lobby to ensure maximum investment in public schools and the university/community college system. • Promote assistance to education, retraining, and technical support from local universities and community colleges. crtr of PALM BEACHG RDENS Objective 3: To Identify Vacant /Distressed Office and Retail Business Locations /Facilities for Prospective Businesses Relocating to Palm Beach County. The Vision Connection: This objective directs attention to the development of a process, requiring inter - departmental cooperation, that will establish a reliable formula for identifying prospective business locations and forwarding the information to appropriate contacts representing or in contact with those businesses seeking to relocate or expand. Strategies: • Identify vacant /distressed structures available for retail and office relocation by size and location. • Ensure that vacant structures are maintained to code standards. • Identify respective owners of specific properties to encourage redevelopment of distressed properties. • Maintain points of contact with the State, local Chamber of Commerce, Business Development Board, and other economic development groups. Palm Beach Gardens Building Inspector visits site of ne e' the Anspach Effort in Northcorp Industna Parr: r C Lt E E i . S is CS 1r. f v. 1 rte. 0 I`,�•. � "11 j I i .a: s XrV 1 FLORA FAUNA TO PROTECT THE NATURAL ENVIRONMENT THROUGH SUSTAINABLE METHODS AND PRACTICES. Objective I: To Protect and Preserve the City's Natural Resources in a Manner that is Balanced with the Needs of the Community. The Vision Connection: While the vision recognizes and promotes the need to protect and preserve the City's natural resources, the preferred image of the City supports sustainability, the term used to describe the goal of integrating environmental and developmental concerns. This view of preservation is entirely consistent with the City's vision and receives support from the concept of "Sustainable Development," as defined by Norwegian Prime Minister Gro Harlem Brundtland: "development which meets the needs of the present without endangering the ability of future generations to meet their own needs." Strategies: • Protect environmentally sensitive lands, but provide public access and appropriate passive use opportunities. • Afford residents input into the development of management plans for preservation areas. Public input shall be sought regarding: I - desired use (passive recreation); 2 - access; and 3 - how public funds are spent. • Relay to appropriate governmental entities the City's dissatisfaction with the goal of acquiring and setting aside properties without opportunities for passive use, and assert the City's goal of conservation with appropriate public access and use. • Assist Palm Beach County in the acquisition/ management of environmentally sensitive lands through joint applications for grant and other funding. ke Objective 2: To Initiate a Citywide Approach to Protection of Environmentally Sensitive Lands. The Vision Connection: This objective of the vision entails comprehensive planning to ensure the City's ability to designate preservation areas as well as areas to be developed. A city -wide approach, as opposed to a piecemeal determination of preservation areas, is not only consistent with the City's vision, such an approach also ensures pathway linakages, the importance of which was outlined earlier in this plan. This avenue would also provide the City with the ability to identify larger areas for preservation designation. Strategies: • Designate a Greenway System that establishes linked preservation areas, meeting the City's environmental set -aside requirements. The Greenway shall protect the City's natural resources and open spaces, yet define developable areas for future improvement. This Greenway System shall complement the Parkway System and replace, where possible or appropriate, the current practice of preservation on a development - by- development basis. • Investigate a program to acquire and designate a parcel as a mitigation banking area /receiving site for use by developers of properties within the City. This property shall serve as a receiver site for protected species that must be relocated from developing parcels, and as a banking area for mitigation of development impacts. • Initiate a study to re- introduce greenway linkages in the developed areas of the City, via native species and landscaping relocation, within rights -of -way, easements and other appropriate open spaces. Residents enjoy the environment in an ECO-hike at the Loxahatchee Slough. ti Gopher Tortoise found at Pine Flat Woods in Palm Beach Gardens. k, P&R:-"TH E ARE ENDLESS TO PROVIDE RESIDENTS OPPORTUNITIES FOR RECREATION AND LEISURE ACTIVITIES AND OTHER PAST TIME INTERESTS. Objective To Provide Adequate Parks and Recreation Facilities to Meet Residents' Needs and Expectations. The Vision Connection: The vision accords significant attention to the provision of quality recreational services to the residents of Palm Beach Gardens. The vision includes not only the maintenance and beautification of existing facilities, it places significant emphasis on acquiring additional park /recreation areas or funds from new development in the City. The vision of a district park rounds out the City's goal of providing recreational and leisure opportunities for residents and adds immeasurably to the quality and quantity of City leisure services. Strategies: • Provide and maintain a sufficient level of parks and recreation facilities /programs for residents. A dual- measure of park acreage and facility standards shall be established as levels of service standards. • Update the parks and recreation impact fee. This impact fee shall be obtained from all new development that creates additional demands on the City's parks and recreational facilities and programs. The amount of the fee shall be appropriate to cover new development's share of the cost of providing additional parks and recreation facilities to mitigate the impact of an expanded population. • Continue to require parks /recreation dedication from new development. This requirement is in addition to the impact fee. The dedication shall be in the form of land, improvements, or funds, depending on the parks and recreational needs of the City. The dedication requirement shall focus on new, improved park areas, as opposed to raw land. Toward that end, a combination of land, improvements, or funds shall be encouraged as a dedication. • Maintain parks and recreation facilities in a manner to ensure ongoing appropriate and safe conditions. • Acquire and improve a district park within the City, to include passive and active recreational opportunities. Consistent with the "linkage" objectives, this park shall serve as a sports center gathering place and shall be accessible by pathways. • Encourage the private sector to provide cultural amenities in the City. Cultural components such as an amphitheater or a sculpture garden, in addition to the "Art in Public Places" requirement, shall be sought from nonresidential projects in lieu of a park/ recreation dedication and impact fee. Ydirr i beacrl Ui, cier12 i E >',QC�'.: rnit �, nnNl, ii! 1 E[, (: Il Ana ictn9tles offered the Gt ).s Parks & Recreation Departme vg &I,, mlit 4*- 1 BETTER HOMES & "GARDENS" TO PROTECT THE CITY'S CHARACTER OF HIGH QUALITY HOUSING AND FOCUS ON THE MAINTENANCE OF EXISTING AFFORDABLE HOUSING. Objective I: To Protect the Community's Affordable Housing Stock by Promoting the Rehabilitation and Maintenance of Existing Units. The Vision Connection: While the City of Palm Beach Gardens is well known for its affluent neighborhoods and the prestigious development that it attracts, the City's vision is inclusive of a diverse society and all levels of housing. The provision of affordable housing is necessary if a community is to develop fully and completely and is an essential ingredient to a vision whose goal is to foster a strong sense of community. Strategies: • Maintain the condition of existing neighborhoods where affordable houses are located through increased code enforcement activity and improved communication with residents on rehabilitation financing availability. • Use community newspapers and newsletters to disseminate information about code requirements, enforcement activities and financial assistance to residents. • Enhance communication and coordination with neighboring governments on similar housing and code enforcement issues. VA Objective 2: To Continue to Encourage the Private Sector's Provision of Affordable Housing through Developer Incentives. The Vision Connection: The vision also provides for the City to fulfill its role of assisting all residents to enjoy the same access to the amenities offered by the City. The City will, therefore, attempt to assist in ensuring affordable housing for residents. The City will, when appropriate, offer incentives to developers to encourage the provision of affordable housing. Strategies: • Continue to provide sufficient land with high density residential designations to encourage the provision of affordable units. • Provide a density bonus (up to 3 units per acre) in the RH category for the provision of affordable units. The density bonus may be awarded upon demonstration of performance standards such as project design and aesthetics, amenities, and commitment to management and maintenance. • Increase support and reliance on the Palm Beach County Commission on Affordable Housing as the entity for promoting affordable housing and recommending incentives. • Continue to allow and preserve the quality of life of residents of existing mobile homes. Provide opportunities for current mobile home residents to learn of additional measures that can be taken to strengthen their "tie downs" due to concern for their wind vulnerability and the City's storm - potential location. The Gay hay a vide range of de/eiwn�enis in meet the needs of all resider Pictured here are trn'ce e�:ampie� of ,he-rro, ana range a,,ailable in the C �E l� a; � 1 . �! _J- + �' - •� +fit¢ u v PROGRAMS ADDRESS WATER SUPPLY NEEDS, FLOOD CONTROL, PRESERVATION OF ENVIRONMENTALLY AQUIFER RECHARGE. The Loxahatchee Sla_ Objective 1: To Promote Adequate Surface Water Management Systems That Protect the Properties in the City from Flooding, yet Minimize Discharge of Run -off to Tide Water. The Vision Connection: The City's ability to ensure adequate infrastructure maintenance serves as the foundation of vision achievement. Without the assurance of the proper functioning of these foundational elements, the other components of the vision will become incidental. The H2O story is a simple one: Every drop counts. The vision includes strategies to recognize and maintain adequate provision of this most basic resource. Strategies: • Continue to work with state, regional and local agencies in conjunction with landowners to formulate surface water management plans that meet the City's level of service for the following areas: a. North of PGA Boulevard and west of the Turnpike. b. South of Northlake Boulevard and west of the Turnpike. C. Areas north and south of SR 710 that are not going to be acquired through the Environmentally Sensitive Lands (ESL) Acquisition Program. k 4� • Continue to work with state, regional and local agencies regarding the development of a management plan for the areas acquired through the ESL Acquisition Program. The management plan for the ESL areas needs to be compatible with existing and future drainage systems for the City. • Recognize the potential need to modify and /or amend current policies with regard to water management systems in the City depending upon the outcome of the United States Environmental Protection Agency's (EPA) issuance of a National Pollutant Discharge Elimination System (NPDES) permit for the City. • Continue work on completing the Master Drainage Plan, inventory, and analysis of City Surface Water Management Systems, recognizing the possibility of increased budget allocations for replacement and renewal of existing systems that are reaching the age of their expected service life. • Continue to seek opportunities with Northern Palm Beach County Improvement District, South Florida Water Management District and Seacoast Utility Authority to develop stormwater retention systems and storage areas so as to minimize the discharge of surplus fresh water to tide water and maximize availability of fresh water for aquifer recharge and maintenance of ecosystems within the City. • Continue to seek opportunities for implementing the construction of a salinity control structure at the juncture of RCA Boulevard and Prosperity Farms Road. • Continue to seek opportunities to work with South Florida Water Management District and the Corps of Engineers on improving flood control in the C -17 Basin. • Continue the process of identifying areas of poor drainage in the City and undertake the necessary improvements and /or retrofit of existing systems so as to provide these areas with the levels of service adopted by the City. Objective 2: To Promote Water Supply Policies and Plans that Balance the Needs of the Urban Population and the Environment. The Vision Connection: The vision also includes emphasis on ensuring adequate water supply and supply facilities for current and future needs. Such planning will include a forward emphasis in coordinating with other governmental entities to ensure future reliable water storage and water supply. Strategies: 11 • Actively participate in regional water supply issues that evolve through the Corps of Engineers' restudy of the Central and Southern Florida Project, the South Florida Water Management District's Lower East Coast Water Supply Plan, and the Governor's Commission for a Sustainable South Florida. Each of these projects needs to properly address water supply needs for the coastal urban areas of southeast Florida. The City's participation in the regional water supply planning process should support the following policies: a. Continued and improved flood control. b. Continued and improved water supply facilities to meet current and future demands without necessitating costly alternative uses of poor quality water. C. Encourage the investigation and consideration of water supply alternatives such as storage and allocation of natural rainfall /runoff. JedCO2St Utllq, r::e' T, d. Appropriate allocation of water supplies to the coastal urban areas and adoption of policies that embrace the concept of shared adversity if supply is in a shortfall. e. Encourage water supply managers to provide additional infrastructure for the storage of water that will provide a sustained and reliable supply for all users. f. Water allocations must include a sustained water supply for all community interests, people and businesses in South Florida. g. While protection of our environment is crucial to our region, environmental goals with regard to preservation and restoration should be realistic and developed from proven scientific principles, so as not to negatively affect the water supply for City residents. Objective 3: To Continue to Ensure Adequate Potable Water and Sanitary Sewer Service to City Properties and Uses. The Vision Connection: The vision also includes emphasis on ensuring adequate water supply and supply facilities for current and future needs. Such planning will include a forward emphasis in coordinating with other governmental entities to ensure future reliable water storage and water supply. Strategies: • Increase the level of service for potable water to 191 gallons per capita daily (gpcd) to reflect usages. • Increase the level of service for sanitary sewer to 107 gpcd to reflect actual usages. • Implement an assessment program for extension of water and /or sewer facilities to developed but unserved areas (east of the Slough) where a minimum 52% of properties indicate willingness to participate. • Promote the philosophy of primary use of the surficial aquifer system be retained or public water supply. Amounts in excess of that required by the respective comprehensive plans would be available for other uses, including irrigation, when no other source is obtainable. • Promote the use of grey water in the irrigation of new golf courses, parkways, and common landscaped areas. GROWING GARDE TO PROMOTE THE LOGICAL PHASING AND TIMING OF NEW DEVELOPMENT, CONSISTENT WITH CAPITAL IMPROVEMENT PLANS AND BUDGETS. Objective, 1: To Establish a Growth Strategy Consistent with City Service Provision Plans. The Vision Connection: Accomplishment of the vision requires accurate determinations of the City's ability and capacity for providing services according to established levels of service for urban and rural areas. This objective will assist in achievement of the vision by grounding the vision in a basis of reality. Successful achievement of the vision requires the ability to provide the services that compose the vision. Strategies: • • • • i Divide Palm Beach Gardens into "urban" and "rural" areas with the Loxahatchee Slough as a natural boundary delineation. Continue to concentrate the City's capital improvements program (CIP) on the maintenance of existing facilities and new or expanded facilities based on the comprehensive plan's population projections and growth policies. The CIP shall be concentrated in the "urban" area. Provision of capital improvements in the "rural" area (extension of services beyond programmed capital improvements) may be undesirable because it brings additional operation and maintenance costs which have not been programmed. Limited extension of "urban services" into the rural area through alternative methods, such as package plants, may be desirable to promote economic development, special housing, protection of natural resources, and other social or energy considerations. Establish urban and rural services to include the following: police, fire, parks, roads, drainage and solid waste. Urban services shall include potable water and sanitary sewer, while rural service may include wells and septic tanks. k f� Objective 2: To Establish a Growth Management Strategy, such as an Urban Boundary Approach. The Vision Connection: The City is Headquarters to PG National which also include approximately two- thirds of the City' residents. Pictured here is one of th, entrances to PGP To ensure further the achievement of the vision, it is necessary to delineate service areas in a realistic manner and consistent with the City's Capital Improvement Plan (CIP). The establishment of the parameters of service will assist in the provision of services and future planning. As such, the parameters serve as a guide to the achievement of the goal. Strategies: • Establish an "urban service area" which depicts where services are available now or can be in the immediate future. Within this urban service area, services (water, sewer, police, fire, drainage, etc.) can be currently provided in an efficient manner, within the City's fiscal capabilities, or are planned in the five -year CIP to be expanded or improved. Urban Service Area = City properties generally east of Central Boulevard between Hood Road and Northlake Boulevard, but including developed communities of PGA National, Ballenlsles, Frenchman's Creek, Westwood Gardens, and Westwood Lakes. • Establish an "urban reserve" outside or surrounding the urban service area which depicts the areas to be served within the planning period of the comprehensive plan - 2015, but are not currently served, nor planned for service in the five -year CIP. Urban Reserve = Area east of Loxahatchee Slough within City limits and annexation area, west of Central Boulevard. • Establish the "urban growth boundary" around that portion of the City that is designated as the urban service area and urban reserve. The area to the east of the boundary is intended for urban levels of development. West of the boundary, the area will be agriculture, environmental preserves or rural- intensity development with rural services and limited economic development. Generally, growth is encouraged east of the boundary and growth west of the boundary can occur only in a non -urban nature. Urban Growth Boundary = Loxahatchee Slough ecosystem. Objective 3: To Proactively Plan for New Roads and Thoroughfares to Ensure Continuity, Access, and Efficient Travel Patterns. The Vision Connection: Critical to a successful growth management strategy is the successful planning for and implementation of a transportation plan designed to be consistent with and adequate for the planned growth. The transportation plan will ensure continuity and travel options between neighborhoods and activity centers. Strategies: • Create a City Thoroughfare Plan that illustrates conceptual linkages and new roadways through the vacant areas of the City. • Require new development to provide thoroughfares, continuity and linkages consistent with the conceptual Thoroughfare Plan, or provide acceptable alternatives. • Assess city road impact fees to cover new developments' fair share of the capital costs of new thoroughfares and linkages. • Initiate a study to establish a means to eliminate "ghost" trips from the traffic model created by approved, but unbuilt (and never to be built) development. S t 1 '.i. � { I '11,1 . � �5: 1. •. � .. The City of Palm Beach Gardens prepares for it continued gromh by consb , new City Hall and Police Station and making additions and renovations to the m F, e itaticn and G.!rders P�,: Objective 4: To Continue to Plan for Parkways, Pedestrian and Bicycle Facilities and Alternative Modes of Transportation. The Vision Connection: This objective demonstrates the interrelatedness of all aspects of the vision. The first goal of this document established the desire for creating "people places" and the importance of establishing linkages to connect those gathering places. Toward that end, the development of a conceptual linkage plan is not only consistent with the goal of planning for growth, it will also support and contribute greatly to the goal of successful "people places ". Strategies: • Continue to promote the Conceptual Linkage Plan's requirements for parkways, pedestrian and bicycle facilities. • Continue to require new development to provide parkway improvements and provide for pedestrian and bicycle access. WHERE DO WE GO FROM HERE? The City of Palm Gardens PROJECTED POPULATION In the end, the value of the visioning process will be determined by the success of the City in translating the vision into reality. Broad visions must be translated into specific actions. The vision provides the framework for those actions. The vision is our preferred, ideal, or desirec image of the future. I While the next step in the process is to take that vision and translate it into reality, the vision"' should not be lost in that process. "Translating it into reality" will entail an analysis of the goals, strategies and objectives in terms of administrative, political, legal and fiscal terms. Many decisions and specific actions will require analysis and perhaps changes in such areas as personnel, land, equipment, studies, regulations, the adoption of new ordinances, and changes to the City's Comprehensive Plan. Nonetheless, throughout this process, the vision will continu( to serve as the guide. The vision will serve as a guide in a number of ways: • it will assist in establishing day -to -day, month- to-month, and year -to -year priorities; 4 • it will guide and undergird policies, plans, actions and decisions; • it will offer an integrated approach in that all elements of the vision are treated from a perspective that recognizes their interrelatedness; • it contains enough flexibility to allow for adjustments when necessary; and • it ensures a certain level of support for future issues since it does represent community inp Palm Beach Gardens is a growing and dynamic city. From 1990 to 1998, the City increased its' population by 47.1 %, making it the second fastest growing municipality in Palm Becah County. Palm Beach Gardens is also the largest city in the North County region with a land area of 53.9 square miles, second in land area only to West Palm Beach in Palm Beach County. The City is approximately 50% developed and current projections estimate that the City's population will double again by the year 2010. As a community we will prepare for that future by embracing: "Our Vision - A Strategic Plan." Join us as we make steady and consistent progress toward the achievement of our goals; as we become one of the pre- eminent cities in the United States. This is our Vision. y 1959 o� Palm Beach Gardens uarantee high quality services which are _. delivered in a cost effective and timely manner Elicit resident involvement in decision making, emphasizing open government Nurture the assets and natural resources entrusted to its care Stimulate high quality of life and the pursuit of excellence thought public - private partnerships City of Palm Beach Gardens Post - Retirement Medical and Life Insurance Benefits Actuarial Valuation As Required by GAS B 45 • EACH GARDENS Fiscal Date: October 1, 2007 — September 30, 2008 Date of Report: March 27, 2007 Prepared By: Bolton Partners, Inc. 575 South Charles Street Suite 500 Baltimore, MD 21201 BOLTON PARTNERS, March 27, 2007 Allan Owens City of Palm Beach Gardens 10500 North Military Trail Palm Beach Gardens, FL 33410 Dear Mr. Owens: INC. The following sets forth the October 1, 2007 GASB 45 Annual Expense for the City of Palm Beach Gardens for the Fiscal Year Ending September 30, 2008. The report is based on August 1, 2006 census data, which is less than 24 months before the first day of fiscal year 2008. However, since The City of Palm Beach Gardens is a Phase 2 employer, implementation is not required until fiscal year 2009. Accordingly, if The City of Palm Beach Gardens decides to implement early, this report can be used to meet the requirements of GASB 45 for fiscal year 2008. If the City does not implement early, these results would need to be updated using more recent data to comply with GASB 45 in FY 2009. ' The report is based on data submitted by the City and medical claims reported by the carriers. We have not performed an audit of the data and have relied on this information for purposes of preparing this report. The report set forth information that will be required in accordance with the Governmental Accounting Standards Board No. 45. These values have been computed in accordance with generally accepted actuarial principles and practices. The various actuarial assumptions and methods are, in our opinion, appropriate for the purposes of this report. Respectfully submitted, Kevin Binder, F.S.A. Consultant (443) 573 -3906 KBinder@BoltonPartners.com �v . Kay M , C.E.B.S. Consultant (443) 573 -3913 KMorang Bo ltonPartners. com Bolton Partners, Inc. 575 S. Charles Street • Suite 500 • Baltimore, Maryland 21201 • (410) 547 -0500 • (800) 394 -0263 ' fax (410) 685 -1924 Actuarial, Benefit and Investment Consultants City of Palm Beach Gardens .............................10 ' GASB 45 — Accounting for Post - Employment .............................10 Benefits Other Than Pension for FYE 2008 .............................10 ' Table of Contents .............................10 ' 1. Executive Summary ................................................................ ..............................1 .............................11 Background............................................................................. ............................... 1 ' The Annual Expense (ARC) .................................................... ............................... 1 PlanProvisions ....................................................................... ............................... 2 DemographicData .................................................................. ............................... 2 ClaimsData ............................................................................. ............................... 3 ImplicitSubsidy ....................................................................... ............................... 3 Demographic Assumptions ...................................................... ............................... 3 EconomicAssumptions ........................................................... ............................... ActuarialCertification .............................................................. ............................... 4 4 2. Plan Expense ........................................................................... ..............................5 Expense.................................................................................. ............................... 5 3. Liabilities ................................................................................. ..............................6 Liabilities as of Valuation Date ................................................ ............................... 6 4. Summary of Principal Plan Provisions .................................. ..............................7 ' General Eligibility Rules .......................................................... ............................... 7 Underlying Plan Description .................................................... ............................... 7 RetireeContribution ................................................................ ............................... 7 5. Valuation Data ......................................................................... ..............................8 Counts ................................... .. ................................................ ............................... 8 Active Age — Service Distribution ............................................. ............................... 9 6. Valuation Methods and Assumptions ................................... .............................10 CostMethod ............................................................................. .............................10 Coverage Status and Age of Spouse ....................................... .............................10 InterestAssumptions ................................................................ .............................10 TrendAssumptions .................................................................. .............................10 DecrementAssumptions .......................................................... .............................11 ClaimsAssumption ................................................................... .............................14 7. Glossary .................................................................................. .............................16 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 1. Executive Summary This report sets forth the FYE 2008 expense. Background In June 2004 the Government Accounting Standards Board (GASB) released Statement 45 which revised the GAAP accounting standards for post employment benefits other than pensions (OPEB). This standard will be applied to post- retirement medical benefits that are provided to the City of Palm Beach Gardens retirees. Prior to the new standard these benefits were accounted for on a pay as you go basis. The new standard requires that these benefits be accounted for on an accrual basis. This report determines the initial expense for FYE 2008 under the new standard for the City ' of Palm Beach Gardens. These results are based on early implementation for the City of Palm Beach Gardens. ' The new standard is effective for periods starting after December 15, 2007 for Phase 2 governments. Phase 2 Governments are those with total annual revenues of at least $10 million but less than $100 million as of FY2000. Since the City of Palm Beach Gardens is a Phase 2 Government the standard must first be used for the October 1, 2008 to September 30, 2009 period, however early implementation is encouraged. ' GASB 45 does not require pre- funding of OPEB liabilities. However, the difference between the GASB (OPEB) annual expense and cash payments for OPEB benefits will be treated as a balance sheet liability. OPEB payments include payments made to a trust as long as the trust assets cannot be used for other purposes. In addition, GASB 45 requires footnote disclosure of OPEB liabilities. ' GASB 45 provides another incentive to pre -fund OPEB liabilities by requiring that OPEB liabilities be measured using a discount rate based on the underlying investment return of the ' assets used to provide these benefits. Since general government assets are typically held in conservative short-term accounts earning relatively low investment returns, a decision not to pre -fund these benefits will result in a much lower discount rate and an annual expense ' which is much higher than the expense determined using a discount rate typically assumed for a pension plan. Accordingly, we have provided two sets of results (funded and unfunded) depending upon whether the City decides to pre -fund these benefits. The Annual Expense (ARC) The annual cost of OPEB benefits under GASB 45 is called the annual required contribution or ARC. The City of Palm Beach Gardens' ARC is shown in Section 2. If the City of Palm Beach Gardens decides to pre -fund OPEB liabilities by establishing a trust, the ARC for the ' FYE September 30, 2008 is $307,000. This amount is as of the end of the fiscal year. The estimated pay as you go cost for OPEB benefits during the same period is $83,500. ' 1 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 1. Executive Summary (cont.) If the City of Palm Beach Gardens decides not to pre -fund OPEB liabilities the ARC increases from $307,000 to $417,000. The end of year balance sheet liability is estimated to be $333,500 which is equal to the unfunded ARC minus pay as you go payments plus interest to the end of the year. The actual final balance sheet liability cannot be determined if the plan is not pre - funded until the pay as you go costs are known. Estimated Benefit Payments for the period from October 1, 2007 through September 30, 2008 are $83,500. These estimated benefit payments are comprised of $40,000 from current retirees and $43,500 from active employees who are assumed to retire between August 1, 2006 and September 30, 2008. It is important to note that, even if all the assumptions we use materialize, the ARC is expected to increase by between 4% and 5% per year, since the cost of annual accruals will increase with healthcare inflation and given the amortization method used for the Unfunded ' Accrued Liability (i.e., benefits earned to date). In addition, an increase in the work force will also increase the ARC in future years. Plan Provisions Retirees can continue the same medical coverage they had (including family coverage) as active employees. Retirees receive no explicit subsidy for their post- retirement medical insurance. Employees must attain age 50 with 1 year of service or reach retirement eligibility in their respective pension plan. In view of the implicit subsidy, the age 50 and one year of service requirement is very generous. The City may want to simply make retirement plan eligibility the standard for retiree medical eligibility. We would recommend continuing the age 50 and one year of service rule for disability retirees. Terminated vested retirements are not allowed to elect coverage at the time of retirement. Demographic Data Demographic data as of August 1, 2006 was provided to us by the City of Palm Beach Gardens. This data included current medical coverage for current employees and retirees. Because the census data is less than 24 months before the first day of fiscal year 2008, it can be relied on to comply with GASB 45 for FY 2008. Although we have not audited this data we have no reason to believe that it is inaccurate. 2 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 1. Executive Summary (cont.) Claims Data ' Monthly paid claims, administrative expenses and enrollment for retirees from November 2003 through October 2006 were supplied by the carrier. Although we have not audited the claims data we have no reason to believe that it is inaccurate. ' Implicit Subsidy Y The published insurance rates for persons prior to Medicare eligibility are based primarily on the healthcare usage of active employees. Since retirees use healthcare at a rate much higher than employees, using these blended rates creates an implicit subsidy for the retiree group. GASB 45 requires that the claims assumption we use for this valuation be based on the actual per- capita retiree cost. The difference between the actual usage of healthcare by retirees and the assumption built into the published rates is identified as the implicit subsidy amount. Demographic Assumptions Demographic assumptions mirror those used for the various pension plans. The pension plans are the City of Palm Beach Gardens Police Officers' Pension Fund, the City of Palm Beach Gardens Firefighters' Pension Fund, and the Florida Retirement System for general employees. An indicator was provided by the City to determine which pension plan employees are in. Substantially all employees are covered by one of these 3 plans. Section 6 details the assumptions for electing coverage. Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 1. Executive Summary (cont.) Economic Assumptions The discount rate assumption is tied to the return expected on the funds used to pay these benefits. The discount assumption will be materially tied to the decision of whether or not to pre -fund these benefits. Our funded results are based on a 7.5% annual return, which assumes that the City will pre -fund these benefits starting with the beginning of the fiscal year ending September 30, 2008. Results using an alternate assumption of 4% are also provided. This assumes that benefits continue to be funded on a pay -as- you -go basis and that general fund investments can earn 4% over the long term. Medical claims are assumed to increase 9.5% from 2006 to 2007, decreasing 1% per year to ' an ultimate rate of 5.5 %. While medical costs have increased by a rate well in excess of 5.5% in recent years, prevailing practice is to assume that these increases will slow in the future. This is based on the macroeconomic assumption that if they do not moderate, medical ' expenses will consume an unacceptable percentage of the gross national product. The long- term assumption selected is consistent with CMS's office of the actuary's assumption for per- capita increases in medical costs. Payroll is assumed to increase at 4.0% per annum. This assumption is used to determine the level percentage of payroll amortization factor. Actuarial Certification In preparing the valuation we relied on demographic and claims data provided by the City of Palm Beach Gardens. We reviewed the data for reasonableness, but did not audit the data. The actuarial methods and assumptions used in this report comply with GASB 45 and the ' actuarial standards of practice promulgated by the American Academy of Actuaries. The healthcare cost trend rate selected is consistent with prevalent practices. The 2005 to 2006 increase is consistent with recent experience. As discussed above, increases of this magnitude cannot be sustained indefinitely. Accordingly, standard actuarial practice (and ' GASB 43 Paragraph 34.g.) is to assume an "ultimate trend" which is consistent with the best estimate of GNP growth. However, the number of years until the ultimate trend is attained and the rate of decrease are not known. There is a significant probability, that between now and the next actuarial valuation we will not observe the anticipated amelioration of medical trends. If this is the case, typical practice is to reset the initial trend and to defer the year that the ultimate trend rate is attained. If this occurs annual actuarial losses of 5% to 15% of M liabilities due to the revised trend rate can be expected. Kevin Binder is a Member of the American Academy of Actuaries and meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained in this report. Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 ' 2. Plan Expense Expense Below is a summary f the calculation of the Plan's Expense y p under the e provisions as of October 1, 2007. These amounts are calculated as of the end of the year. Funded Not Funded '10101/2007 10/01/2007 (1) Interest Rate 7.50% 4.00% ' (2) Amortization of Unfunded Accrued Liability (a) Unfunded Accrued Liability $2,131,000 $3,240,000 (b) Amortization Factor (Rounded) 18 29 (c) Amortization Amount $118,000 $112,000 (3) Annual Required Contribution of Employer (ARC) — As of End of Fiscal Year ' (a) Normal Cost $189,000 $305,000 (b) Amortization of Unfunded Accrued Liability $118,000 $112,000 ' (c) Total ARC $307,000 $417,000 (4) Annual OPEB Cost (AOC) (a) ARC $307,000 $417,000 (b) Less N00 Amortization $0 $0 ' (c) Plus Interest on N00 $0 $0 (d) Total Cost $307,000 $417,000 ' (5) 1% Sensitivity (AOC) $353,000 $488,000 (6) Net OPEB Obligation (N00) ' (a) Beginning of Year N00 $0 $0 (b) Current ARC $307,000 $417,000 (c) Expected Cash Payment $(307,000) $(83,500) ' (d) Projected End of Year N00 (a + b — c) $0 $333,500 1 5 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 3. Liabilities Liabilities as of Valuation Date Below is a summary of the Plan's Liabilities under the current provisions as of 10/1/2007. Item (4) shows the impact of a I% increase in trend. Funded Not Funded 10/01/2007 10/01/2007 (1) Discount Rate 7.50% 4.00% (2) Actuarial Accrued Liability (a) Actives $1,817,000 $2,880,000 (b) Retirees in Pay Status $314,000 $360,000 (c) Total $2,131,000 $3,240,000 (3) Normal Cost (End of Year) (a) Normal Cost for Benefits $189,000 $305,000 (b) Expense Load $0 $0 (c) Total Normal Cost $189,000 $305,000 (4) Trend Sensitivity (a) Actuarial Accrued Liability $2,403,000 $3,709,000 (b) Total Normal Cost (End of Year) $204,000 $359,000 6 Bolton Partners, Inc. 1 1 City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 4. Summary of Principal Plan Provisions The following summary describes principal plan provisions assumed in calculating the cost of your post- retirement medical plan. General Eligibility Rules Eligible participants are assumed to be employees, former employees or beneficiaries of the City of Palm Beach Gardens who had health coverage as an active employee. Disabilities must meet eligibility requirement for service retirement, or have attained age 50 with 1 year of service. No distinction has been made between ordinary disability and line of duty disability for purposes of this valuation. Police retirement eligibility is age 52 with 10 years of service or 20 years of service regardless of age for normal retirement. Early retirement eligibility is age 50 with 10 years of service. Fire retirement eligibility is age 52 with 10 years of service or 25 years of service regardless of age for normal retirement. Early retirement eligibility is age 50 with 10 years of service. Florida Retirement System Regular Class normal retirement is age 62 with 6 years of service or 30 years of service regardless of age. Early retirement is 6 years of service. We have included a liability for employees who leave employment after attaining age 50 with one year of service and immediately elect retirement benefits. Underlying Plan Description Pre - Medicare retirees may choose between two medical plans (a PPO plan and an HMO plan), both of which are packaged with prescription benefits. Retiree Contribution Retirees pay 100% of the published rates for actives. 7 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 5. Valuation Data Counts The following table summarizes the counts, ages and coverage as of 7/1/2006, for those currently enrolled in Medical /Drug coverage: General Police Fire Total (1) Number of Participants (a) Active Employees 238 99 107 444 (b) Retirees (Pre- Medicare) 9 0 1 10 (2) Active Statistics (a) Average Age 43.84 39.86 35.97 41.06 (b) Average Service 6.82 10.28 7.97 7.87 (3) Inactive Statistics (a) Average Age (Pre- Medicare) 59.72 N/A 57.83 59.54 8 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 5. Valuation Data (cont.) Active Age - Service Distribution Shown below is a distribution based on age and service of active participants who are currently receiving medical and drug benefits from the City as of the valuation date. The following table shows averages in total for the above participants. Averages Age: 41.06 Service: 7.87 9 Bolton Partners, Inc. Years of Service as of 07/01/2006 Age Under 1 01 -04 05 -09 10 -14 15 -19 20 -24 25 -29 30+ Total Under 25 8 15 1 0 0 0 0 0 24 25-29 9 28 5 0 0 0 0 0 42 30-34 6 38 8 7 1 0 0 0 60 35 -39 6 29 22 13 11 1 0 0 82 40 -44 2 22 10 23 19 10 0 0 86 45-49 4 26 9 9 14 8 2 0 72 50-54 3 12 10 3 8 1 0 0 37 55-59 1 10 5 1 1 3 0 0 21 60 -64 0 2 4 6 1 1 0 1 15 65 &Up 0 1 2 0 1 0 0 1 5 Totals 39 183 76 62 56 24 2 2 444 The following table shows averages in total for the above participants. Averages Age: 41.06 Service: 7.87 9 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 6. Valuation Methods and Assumptions Cost Method This valuation uses the Projected Unit Credit method, with linear pro- ration to assumed benefit commencement. Coverage Status and Age of Spouse Actual coverage status is used; females assumed 3 years younger than male spouse. Employees with individual coverage are assumed to elect individual coverage in retirement, those with spouse /family coverage are assumed to continue this coverage at retirement. This valuation assumes that 20% of those eligible will continue the same coverage levels at retirement. Interest Assumptions Funded Not Funded Discount Rate 7.50% 4.00% Payroll Growth 4.00% 4.00% Trend Assumptions * The normal cost is assumed to increase each year with Ultimate Trend. 10 Bolton Partners, Inc. Base Sensitivity Medical and Drug 06/30/2007 9.50% 10.50% 06/30/2008 8.50% 9.50% 06/30/2009 7.50% 8.50% 06/30/2010 6.50% 7.50% 06/30/2011 5.50% 6.50% Ultimate 5.50% 6.50 %' * The normal cost is assumed to increase each year with Ultimate Trend. 10 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 6. Valuation Methods and Assumptions (cont.) Decrement Assumptions Below is a summary of decrements used in this valuation. Sample Retirement, Disability, and Termination rates are illustrated in the tables below. Mortality Decrements Description (1) Healthy RP 2000 Combined Healthy Table (2) Disabled RP 2000 Combined Disabled Table Police Officers' Pension Fund Annual Rate of Retirement For each year eligible for early retirement 5% For year when normal retirement date is attained 60% For each four years after normal retirement date 40% For fifth year after normal retirement date 100% Age Termination Rates Disability Rates 20 6.0% 0.21% 25 5.7% 0.23% 30 5.0% 0.27% 35 3.8% 0.35% 40 2.6% 0.45% 45 1.6% 0.76% 50 0.8% 1.50% 55 0.3% 2.32% Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 - Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 6. Valuation Methods and Assumptions (cont.) Decrement Assumptions (Cont.) Firefighters' Pension Fund Rates of Retirement 100% at first age eligible (age 52 and 10 years of service, or 25 years of service). Age Termination Rates Disability Rates 25 16.1% 0.05% 30 15.0% 0.06% 35 11.6% 0.09% 40 8.2% 0.12% 45 4.9% 0.27% 50 1.7% 0.43% 55 1.7% 0.43% 60 1.7% 0.43% Florida Retirement System General Class 12 Bolton Partners, Inc. Retirement - Regular Male Female First Subsequent First Subsequent Age Eligibility Eligibility Eligibility Eligibility 20 0.0% 0.0% 0.0% 0.0% 25 0.0% 0.0% 0.0% 0.0% 30 0.0% 0.0% 0.0% 0.0% 35 0.0% 0.0% 0.0% 0.0% 40 0.0% 0.0% 0.0% 0.0% 45 6.9% 2.5% 6.3% 0.5% 50 19.9% 13.5% 14.3% 8.0% 55 19.5% 12.5% 16.3% 9.0% 60 26.4% 18.1% 26.3% 17.4% 65 31.6% 32.8% 25.3% 27.6% 12 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 - Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 6. Valuation Methods and Assumptions (cont.) Decrement Assumptions (Cont.) Termination Regular - Male Combined Attained Age Years of Service 20 25 30 35 40 45 50 55 60 65 0 Disability Rates 27.2% 25.8% Regular 24.4% Age Male Female 20 0.000% 0.000% 25 0.030% 0.010% 30 0.058% 0.026% 35 0.073% 0.049% 40 0.102% 0.075% 45 0.188% 0.165% 50 0.313% 0.285% 55 0.523% 0.478% 60 0.687% 0.599% 65 0.239% 0.150% Termination Regular - Male Combined Attained Age Years of Service 20 25 30 35 40 45 50 55 60 65 0 32.8% 27.2% 25.8% 25.8% 24.4% 24.4% 23.4% 27.4% 27.4% 27.4% 1 31.8% 23.2% 19.2% 17.9% 15.8% 15.7% 15.2% 18.4% 18.4% 18.4% 2 25.2% 19.1% 15.5% 14.2% 12.0% 11.6% 10.7% 14.1% 14.1% 14.1% 3 18.4% 14.6% 13.2% 12.6% 10.7% 10.3% 9.4% 12.4% 12.3% 12.3% 4 15.8% 12.7% 11.8% 10.9% 9.0% 8.8% 7.9% 9.9% 9.7% 9.7% 5 13.3% 11.0% 10.0% 9.7% 8.4% 7.7% 6.9% 8.9% 8.8% 8.8% 6 12.4% 9.4% 8.6% 8.3% 7.5% 7.2% 6.1% 6.4% 6.3% 6.3% 7 11.7% 8.8% 7.5% 7.2% 6.6% 6.3% 5.6% 5.5% 5.4% 5.4% 8 11.0% 7.7% 6.4% 6.2% 5.8% 5.7% 5.1% 4.9% 4.8% 4.8% 9 10.5% 6.6% 5.8% 5.6% 5.5% 5.4% 4.8% 5.0% 4.9% 4.9% 10 or more 10.9% 6.9% 5.2% 4.7% 3.3% 3.0% 3.3% 5.0% 5.9% 4.1% 13 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 - Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 6. Valuation Methods and Assumptions (cont.) Decrement Assumptions (Cont.) Claims Assumption Because these are multiple plans, to determine the assumed cost, we weighted the 2006 premium rates by the current enrollment. Retirees pay the entire assumed cost. Gross claims are based on enrollment and paid medical and prescription drug claims for employees and pre -age 65 retirees paid from November 1, 2003 to October 31, 2006. The claims were projected to Fiscal Year 2007. Medical claims and prescription drug claims were projected assuming a 10% annual increase. The claims are a blended average of the projected 2003 -2004, 2004 -2005, and the 2005 -2006 claims with the 2003 -2004 projected claims weighted 30 %, the 2004 -2005 projected claims weighted 35 %, and the 2005 -2006 projected claims weighted 35 %. These amounts were increased by 50% to account for selection The resulting average pre -age 65 claims were age adjusted. Fixed costs (administrative fees and stop -loss charges) were assumed to be 13 %. Family coverage is assumed to be 2.58 times the cost of individual coverage for the same age band. 1 14 Bolton Partners, Inc. Termination Regular - Female Combined Attained Age Years of Service 20 25 30 35 40 45 50 55 60 65 0 31.9% 28.0% 26.7% 26.7% 25.7% 25.7% 24.4% 27.8% 27.8% 27.8% 1 28.6% 22.0% 18.8% 17.7% 15.5% 15.4% 14.8% 17.6% 17.6% 17.6% 2 23.3% 18.0% 15.3% 14.2% 12.1% 11.9% 11.5% 13.7% 13.7% 13.7% 3 18.3% 14.7% 13.2% 12.6% 10.6% 10.3% 9.2% 11.3% 11.2% 11.2% 4 15.4% 12.9% 11.3% 10.9% 9.1% 8.8% 8.4% 9.7% 9.6% 9.6% 5 15.3% 12.2% 10.7% 10.2% 8.0% 7.7% 7.0% 8.3% 8.2% 8.2% 6 12.4% 10.5% 9.5% 9.2% 7.2% 7.0% 6.5% 7.0% 6.9% 6.9% 7 11.9% 9.7% 8.5% 8.2% 6.6% 6.4% 5.8% 6.3% 6.2% 6.2% 8 11.6% 8.6% 7.9% 7.5% 6.0% 5.8% 5.5% 6.0% 5.9% 5.9% 9 11.3% 7.9% 7.2% 6.9% 5.5% 5.3% 5.1% 5.6% 5.4% 5.4% 10 or more 11.6% 5.3% 5.4% 4.6% 3.3% 3.0% 3.2% 5.4% 7.2% 4.1% Claims Assumption Because these are multiple plans, to determine the assumed cost, we weighted the 2006 premium rates by the current enrollment. Retirees pay the entire assumed cost. Gross claims are based on enrollment and paid medical and prescription drug claims for employees and pre -age 65 retirees paid from November 1, 2003 to October 31, 2006. The claims were projected to Fiscal Year 2007. Medical claims and prescription drug claims were projected assuming a 10% annual increase. The claims are a blended average of the projected 2003 -2004, 2004 -2005, and the 2005 -2006 claims with the 2003 -2004 projected claims weighted 30 %, the 2004 -2005 projected claims weighted 35 %, and the 2005 -2006 projected claims weighted 35 %. These amounts were increased by 50% to account for selection The resulting average pre -age 65 claims were age adjusted. Fixed costs (administrative fees and stop -loss charges) were assumed to be 13 %. Family coverage is assumed to be 2.58 times the cost of individual coverage for the same age band. 1 14 Bolton Partners, Inc. ' City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 1 6. Valuation Methods and Assumptions (cont.) ' The following chart shows the implicit costs including both medical and prescription drug. This is the claims cost in excess of the premium. These claim amounts are projected using the medical and drug trend assumptions on page 10. ' July 1, 2006 to June 30, 2007 Single Family ' 1. Implicit Costs a. Under 50 1,221 3,146 ' b. Age 50 -54 2,396 6,173 c. Age 55 -59 3,526 9,083 d. Age 60 -64 5,108 13,157 e. Age 65 and Older N/A N/A 15 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 7. Glossary Annual OPEB Cost (AOC): An accrual -basis measure of the periodic cost of an employer's participation in a defined benefit OPEB plan. Annual Required Contributions of the Employer(s) (ARC): The employer's periodic required contributions to a defined benefit OPEB plan, calculated in accordance with the parameters. Covered Group: Plan members included in an actuarial valuation. Defined Benefit OPEB Plan: An OPEB plan having terms that specify the amount of benefits to be provided at or after separation from employment. The benefits may be specified in dollars (for example, a flat dollar payment or an amount based on one or more factors such as age, years of service, and compensation), or as a type or level of coverage (for example, prescription drugs or a percentage of healthcare insurance premiums). Employer's Contributions: Contributions made in relation to the annual required contributions of the employer (ARC). An employer has made a contribution in relation to the ARC if the employer has (a) made payments of benefits directly to or on behalf of a retiree or beneficiary, (b) made premium payments to an insurer, or (c) irrevocably transferred assets to a trust, or an equivalent arrangement, in which plan assets are dedicated to providing benefits to retirees and their beneficiaries in accordance with the terms of the plan and are legally protected from creditors of the employer(s) or plan administrator. Funded Ratio: The actuarial value of assets expressed as a percentage of the actuarial accrued liability. Healthcare Cost Trend Rate: The rate of change in per capita health claim costs over time as a result of factors such as medical inflation, utilization of healthcare services, plan design, and technological developments. Investment Return Assumption (Discount Rate): The rate used to adjust a series of future payments to reflect the time value of money. 16 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 7. Glossary (cont.) Level Percentage of Projected Payroll Amortization Method: Amortization payments are calculated so that they are a constant percentage of the projected payroll of active plan members over a given number of years. The dollar amount of the payments generally will increase over time as payroll increases due to inflation; in dollars adjusted for inflation, the payments can be expected to remain level. This method can not be used if the plan is closed to new entrants. Net OPEB Obligation: The cumulative difference since the effective date of this Statement between annual OPEB cost and the employer's contributions to the plan, including the OPEB liability (asset) at transition, if any, and excluding (a) short -term differences and (b) unpaid contributions that have been converted to OPEB- related debt. Normal Cost or Normal Actuarial Cost: That portion of the Actuarial Present Value of pension plan benefits and expenses which is allocated to a valuation year by the Actuarial Cost Method. Other Post - employment Benefits: Post - employment benefits other than pension benefits. Other post - employment benefits (OPEB) include post - employment healthcare benefits, regardless of the type of plan that provides them, and all post - employment benefits provided separately from a pension plan, excluding benefits defined as termination offers and benefits. Pay -as- you -go (PAYG): A method of financing a pension plan under which the contributions to the plan are generally made at about the same time and in about the same amount as benefit payments and expenses becoming due. Payroll Growth Rate: An actuarial assumption with respect to future increases in total covered payroll attributable to inflation; used in applying the level percentage of projected payroll amortization method. Plan Liabilities: Obligations payable by the plan at the reporting date, including, primarily, benefits and refunds due and payable to plan members and beneficiaries, and accrued investment and administrative expenses. Plan liabilities do not include actuarial accrued liabilities for benefits that are not due and payable at the reporting date. 17 Bolton Partners, Inc. City of Palm Beach Gardens GASB 45 — Accounting for Post - Employment Benefits Other Than Pension for FYE 2008 7. Glossary (cont.) Plan Members: The individuals covered by the terms of an OPEB plan. The plan membership generally includes employees in active service, terminated employees who have accumulated benefits but are not yet receiving them, and retired employees and beneficiaries currently receiving benefits. Post - employment: Post - employment Healthcare Benefits: Select and Ultimate Rates: The period between termination of employment and retirement as well as the period after retirement. Medical, dental, vision, and other health - related benefits provided to terminated or retired employees and their dependents and beneficiaries. Actuarial assumptions that contemplate different rates for successive years. Instead of a single assumed rate with respect to, for example, the investment return assumption, the actuary may apply different rates for the early years of a projection and a single rate for all subsequent years. For example, if an actuary applies an assumed investment return of 8% for year 20W0, 7.5% for 20W1, and 7% for 20W2 and thereafter, then 8% and 7.5% are select rates, and 7% is the ultimate rate. 18 Bolton Partners, Inc.