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1991.07.09_FAB_Minutes_RegularTOWN OF HIGHLAND BEACH FINANCIAL ADVISORY BOARD REGULAR MEETING - MINUTES Tuesday, July 9, 1991 9.30 A.M. Chairman S. Myron Browner called this Regular Meeting of the Financial Advisory Board to order at 9:30 A.M. in Commission Chambers. Deputy Town Clerk Doris Trinley called the roll. Present were the Chairman, Vice Chairman Victor P. Hadeed and Regular Members Richard Brunton and Fred Firstenburg. Regular Member Dennie Freeman was ab- sent. Also present were Commissioner John F. Rand, Town Manager Mary Ann Mariano and Finance Director Michael Seaman. Chairman Browner also acknowledged the presence of Mayor Joseph A. Boulay, who in turn introduced Mr. Frank Calarello, explaining that Mr. Calarello planned to attend meetings of all Town boards in an effort to decide where his interests lie before submitting a Talent Bank Appli- cation. Upon MOTION by Mr. Firstenburg/Mr. Hadeed, the Minutes of the Regular Meeting of June 11, 1991 were approved with unanimous vote. OLD BUSINESS The Chairman deferred to Vice Chairman Hadeed and asked that he bring the members up-to-date on the following issues: Balanced Budget: Mr. Hadeed said that after meeting with Town Manager Mariano regarding his concern that the proposed budget could be legally considered "balanced" since approximately $175,000 was being carried forward, he was satisfied with Mrs. Mariano's explanation, including that this practice was not uncommon in municipal budgeting where a " - 0 based budget was not required by law. Contingency Reserve Funds: Mr. Hadeed noted that a standard amount was used for budgetary purposes each year, thereby making it a "plug-in" figure. It was his suggestion that the Board give consideration to this in the future and make a recommendation to the Town Commission and Town Manager that some kind of formula basis be used to determine contingency, perhaps a percentage basis of the total budget. State Pooled Investment Fund: The Vice Chairman explained the events leading up to his receiving copies of correspondence from Cliff Hinkle, Executive Director of the State Pooled Fund, regarding FDIC insurance coverage on investments in U.S. branches of foreign -owned banks (see Financial Advisory Board Regular Meeting - Minutes July 9, 1991 Page 2 of 4 j Minutes of June 11, 1991 Meeting). He said that upon review, he was not satisfied that the information contained therein applied to the Pooled Fund, at which point he was referred to one of the Fund's attor- neys. Mr. Hadeed said the attorney with whom he spoke seemed to concur that the FDIC information contained in the correspondence did not apply to the State Pooled Fund; also the attorney felt the institutions in question were "U.S. banks" owned by foreign banks, whereas Mr. Hinkle contended they were "U.S. branches" of foreign banks. Mr. Hadeed further stated that he had read the Florida statutes which stipulate that public deposits in institutions require separate col- lateral set aside from the assets of the bank, but there is a question if that is only required by Florida banks or by all banks. Mr. Hinkle, he said, indicated that this applied to all banks, but the attorney thought it was probably just Florida banks. Therefore, the Vice Chairman said he thought it appropriate that a legal opinion be sought in several areas, i.e.: Does the FDIC insurance apply? What type of institutions the foreign banks are: U.S. Charter banks owned by foreign banks? Branches of foreign banks? State statutes re separate collateral for public deposits: Florida banks only? All banks? Mr. Hadeed concluded his remarks by suggesting these discrepancies be addressed by the Fund's attorney, after he contacts the FDIC, and an opinion returned to the Board before any recommendations could be made by the Board. Mrs. Mariano suggested that the specific questions raised today be transmitted to her and she in turn would request the Town Attorney to get in touch with the Fund's attorney. NEW BUSINESS Conclude Review of 1991/1992 Fiscal Year Budget (Revenues); Recommend tentative millaae. Before review started, Mrs. Mariano advised the members that while no new available information on Revenues had been forthcoming since the FAB's last meeting on June 11, on the expenditure side of the budget an increase of approximately $200,000 had to be applied to fire/rescue contract costs (acct. 01-10-22). She explained that this was the result of county firefighters finally reaching contract agreement, which included retroactive salary increases. Mrs. Mariano said it was her recommendation that the additional monies be taken from reserves, rather than have to levy additional taxes. This information gen- erated substantial discussion between the members, the Town Manager and .Finance Director regarding cash balances brought forward; questions posed by the members were ultimately answered to their satisfaction. However, during the discussion it was noted that use of contingency would allow for a "deficit" budget and substantial discussion took place regarding this assumption. It was pointed out that this proposed Financial Advisory Board Regular Meeting - Minutes • July 9, 1991 Page 3 of 4 budget was consistent with past proposed budgets, but full expenditure of contingency funds had never come to pass in the actual budgets. Re- garding a suggestion that it might be better to either cut expenditures or increase taxes, Mrs. Mariano said there was no way expenses could be reduced by the approximate $380,000 contingency under discussion. She stated that it was certainly within the pervue of the FAB to recommend a tax increase to the Town Commission, but it would not be her recom- mendation to the Commission, adding that the proposed budget was based against millage to preclude a tax increase. She added that use of con- tingency for unexpected expenses, such as the increase in fire/rescue costs, was a way of "giving back" to the taxpayers by not having to raise taxes. The members then turned their attention to the proposed millage rate and considerable discussion took place, which included the "roll back" formula used to arrive at the proposed millage. Concluding discussion, it was the CONSENSUS of the members to proceed to the next agenda item before a Motion was called for regarding pro- posed millage. Water Rates • Some of the factors discussed during this review were: .the Town's mandatory water restrictions as of June 1, 1991 would most probably have an effect on the amount of water sold in the future. .inverted rate schedule re "use more; pay more" was in line with South Florida Water Management District's conservation measures. .Mr. Firstenburg spoke strongly against any in- crease in unit charges, saying this measure would be extremely unfair to condominiums. .water rates represent a fee -oriented service that has nothing to do with taxes. Although there was nothing to review in the Sewer System portion of the Enterprise Fund this fiscal year, Mr. Seaman distributed copies of the current rate structure to the members for their information. • Financial Advisory Board •Regular Meeting - Minutes July 9, 1991 Page 4 of 4 CONCLUSION Millage: Upon MOTION by Mr. Firstenburg/Mr. Hadeed, the following carried with unanimous vote: THE FINANCIAL ADVISORY BOARD RECOMMENDS TO THE TOWN COMMISSION THAT A TENTATIVE MILLAGE RATE OF 2.5653 BE ADOPTED. Water Rates: Upon MOTION by Mr. Firstenburg/Mr. Browner, the following carried with unanimous vote: THE FINANCIAL ADVISORY BOARD RECOMMENDS TO THE TOWN COMMISSION THAT WATER RATES BE ADOPTED AS FOLLOWS: Rate 1st 20,000 per 1,000 gal.: 0.95 After 20,000 per 1,000 gal.: 1.35 Unit Charge per month: 3.00 Sewer Rates: Upon MOTION by Mr. Hadeed/Mr. Firstenburg, the following carried with unanimous vote: • THE FINANCIAL ADVISORY BOARD ACCEPTS THE SEWER RATE STRUCTURE AS PRESENTED. It was agreed that no future meeting date would be set at this time and upon MOTION by Mr. Brunton/Mr. Hadeed, this meeting was adjourned at 10:55 A.M. NOTE: Although the meeting had officially been adjourned, before he left the Chambers, Commissioner Rand complimented the members on their intelligent and in-depth review of the proposed 1991/1992 Fiscal Year Budget, saying the fine work they had done would make the Town Commission's review of same a much easier task. dmt APPROVED: Myron rowner, Chairman -- h 0 % ! i ei4 J' PO j, AIT C 0 -- Richard Brunton *TEST: DATE: _E/ / J % 7 9 f Victor _P _.-Hadeed J Fted Firstenb ru g