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2011.12.16_FAB_Minutes_RegularX40-- +f . ----- i� TOWN OF HIGHLAND BEACH N4RQUTES OF THE FINANCIAL ADVISORY BOARD flhj{ter REGULAR MEETING Friday, December 16, 2011 9-M AM Members Pry Ronald Brooks, Brice Giacoma, Gerald Gitoer and William Gross_ Also A Mayor Bernard Featherman, Town Manager Kathleen Weiser, Ailing Finance Director Cale Cutis, Deputy Town Clerk Valerie Oakes and members of the per. CALL TO ORDER — DEPUTY TOWN CLERK: Deputy Town Clerk Oakes called the Regular Meeting to order at 9.30 a.m. followed by a roll call_ ADDITIONS. DELETIONS OR ACCEPTANCE OF AGENDA: Deputy Town Clerk Oakes called for any additions or deletions to the agenda, hearing none, called for a motion to accept the agenda. MOTION: Member Giacoma moved to accept the agenda as presented. Member Brooks seconded the motion, which passed unanimously. PUBLIC COMIIIENTS AND REOUESTS- None- one_ PRESENTATIONS: PRESENTATIONS- e • Introduction of Board Members Deputy Town Clerk Oakes called on each of the board members to introduce themselves. • Announcement One (1) Vacancy eu the Board Deputy Town Clerk Oakes announced that there is one vacancy on the Board. If any person is interested in serving on the Board, fill out a Talent Bank Application form and submit the form to the Town Cleric's Office. • Town's Three -Year Strategic Plies, Pbund ag Board Mester Carl Feidaan Carl Feldman, Planning Board Member, presented the Town's 'Three -Year Strategic plan and its process. By consensus, the Bowd nxluested to add the following items to the strategic plan master wish list: o Purchase the lot at 3200 S. Ocean Blvd., re- zone the area for park use and allow access to the Intracoastal Waterway. o Replace the fire truck. NEW BUSUWM: A) RcView Resolution #11406 R Deputy Town Clerk Oakes read into the record Resolution No. 11-006 R- B) General Di mmssion of Fsancial Topics — Cale Cards, Acting Faaace Director Town's FMMMC;iMfS Cale Curtis, Acting Finance Director, reported that the Town's fiscal year ended September 30, 2011. The pre -audited figures show a total general fiord fund balance of $6.1 million, a decrease of over $274,000 from the prior year. This is the first decrease in fiord balance in over seven years. The decrease can be directly tied to slumping real estate values, lowering of the tag rate, and steady, if not, increasing operating expenditures. Of the total fund balance, $1.78 million is reserved for budget stabilization, $300,000 is reserved for disaster recovery, with the remaining $427 million undesignated and unreserved. Total GF revenues were down $650,000 year over year. Total expenditures were down just over $70,000. Total rash in investment accounts at year-end was $82 million. Total investment earnings were just under $40,000 for the year. The Town's independent auditors will begin their audit work in early January 2012 and will issue their report shortly thereafter. The Town, in conjunction with the auditors, will prepare and publish the Comprehensive Annual Financial Report in late February or early March. The Finance Department issues a monthly financial report to the Commissioners, FAB board members, and department heads. The report provides balance sheet figures, budget to actual comparisons, and an investment schedule. Director Curtis recommended reviewing the construction of the latest financial report, and providing feedback on the material so as to enhance its utility to the reader. There was general discussion from the Board, by consensus, the Board decided to review the Town's Investment Policy. Financial Advisory Board Regular Meeting Mmw 12/16/11 Page 2 of 5 INVESOM at OPPWIMi[y — TMM Owmwd Pr peWy = Eons Botch Director Curtis said that presently, the Town is advertising two surplus parcels of land located in the City of Boca Raton. These parcels of land are where the Town's old water plant and well fields were located in Boca. The advertisement is on the Town's website and is not actively marketed by a reahor. The latest property appraiser value for the 8.5 acres well field is a little over $7 million and the 1.8 acre parcel is appraised at $12 million. Realizable market value is unknown at this time. At a recent Commission meeting the Commission moved to table, until further notice, the action of hiring a commercial property real estate agent to list and market the parcels. Per Resolution 755 passed in Marro of 2000, the proceeds from the sale of the parcels are restricted to the repraymeat of debt service on the new water plant At the end of 2011, the total outstanding debt on the new pmt was approximately $12 million_ There was general discussion fiom the Board, by consensus, the Board asked the Finance Director to review the Town's water debt instruments to determine what, if any pre- payment provisions may be present. The Board will review the information when it is C) Review of the Tort's Water Rates Director Curtis explained that on November 29, 2011, the Town Manager received a leiter from Ron Brown, President of Bel Lido Property Owners Association, requesting the Town to review the water rates chimed to multi -family units and single-family homeowners. It is the belief of the Bel Lido Property Owners Association that single- family owners pay more for water when compared to multi -family owners. Specifically, the association believes that the three-tier strvctiae of water rates is the cause for the increase in single-family owners' water bilis. The Town's water rates changed from a two-tier to three-tier structure in September of 2006 following the recommendation of an independent analyst' rate study. One of the goals of the three-tier rate structure is to foster water conservation. Copies of the Water & Wastewater Rate Study and Water & Wastewater Rate Study Letter Report were distributed to the Board. After general discumon, by corms, the Board agreed to review the current water rates and the fie. D) Preservation of the Tout's Fund Balance Director Curtis reported that in September of this year, the Town Commission adopted a policy on Fund Balance. This policy designated fund balance into five separate categories: (r) Non -spendable, (ii) restricted, (iii) committed, (iv) assigned, and (v) unassigned. Unassigned Fund Balance (UFB) represents the cash that is available for general purposes and is not obligated or specifically designated. When the Commission adopted this policy, they also established an Assigned Fund Balance of 16.7"/o of General Fund operating expenditures. This Assigned Fund Balance is designed to provide budget stabilization during periods of potential cash flow shortfalls. Presently, the 16.7 percentage represents 2 months of operations. Fmmcud Advisory Botd Rep w Meeting MmuW 12/16/11 Page 3 of 5 When the economy took its tum for the worse, the Town's main revenue source, property taxes, began to decline. This decline in revenues has caused the Town to use a portion of its Unassigned Fund Balance to balance the budget. This year alone, the Town estimates having to use over $710,000 of its UFB to make up for lost revenues - Director Curtis distributed a find balance graph, which provided a historical and forward-looking use of fiord balance in the Town. If the Town continues on the same path, unassigned find balance will be fully exhausted by 2017. The importance of the Town having a plan to retain the UFB was discussed. It is recommended that the Board gener Ie ideas that will preserve the Town's UFB. There was general discussion from the Board, no action taken. This matter will be addresged in future meetings of the FAB. E) Detiervaiwe and Approve 2012 Meeting Scbedsk Quarterly Afeetnrgs at 9:30 AM— Town Hall Cmorence Room March 2012 September 2012 June 2012 December 2012 Deputy Town Clerk Owes reviewed the 2012 meeting schedule with the Board. MOTION: Member Giacoma moved to approve the 2012 meeting schedule as recommended and meet on January 20, 2012, and on March 23, 2012. Member Gitner seconded the motion, which passed unainimously. Town Manager Weiser stated that the Board would fly meet in the Town Hall Conference Room, however, the conference room was not available due to a scheduled event Town Manager Weiser questioned if the Board would rather meet in a round table setting or on the dais. By ems, the Board agreed to meat m a rood table setting. ELECTION OF CHAIR: Deputy Town Clerk Oakes opened the floor to nominations for the position of Chair of the Board. Member Brooks nominated Gerald Gitner as Chair of the Board. There being no other nominations, nominations were closed. MOTION: Member Brooks moved to elect Gerald Grbwr as Chair of the Financial Advisory Board, seconded by Member Gross. ROLL CALL: Member Brooks - Yes Member Grass - Yes Member Giacoma - Yes Ficial Advisory Board Regaim Meering Mmes 12/16/11 Page 4 of 5 Member Gitner - Yes Motion carried 4AL These being no further business, Deity Town Cleric Oakes called for a motion to ac§cxmm the meeting at 10:45 a.m. MOTION: Member Giaooma moved to adjo the meeting at 10:45 AM. Member BnxA s seconded the motion, which passed unanimously. T0WN SEAL FA0� Valerie Oakes, CMC Deputy Town Clerk Board Secretary Date: 12,c,fa�� , ,61ia�� Rdhald Brooks, Board Member e�� William Gros,, Board Member vacancy Fi WCW Advisory Board Rc*w Mectmg Mertes 12/16/11 Page 5 of 5