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2012.08.07_TC_Minutes_WorkshopTOWN OF HIGHLAND BEACH MINUTES OF THE TOWN COMMISSION 2012-2013 PROPOSED BUDGET WORKSHOP MEETING Tuesday, August 07, 2012 4.30 PM Mayor Bernard Featherman called the Budget Workshop Meeting to order in the Commission Chambers at 4:30 PM. CALL TO ORDER: Roll Call: Members present: Mayor Bernard Featherman; Vice Mayor Ron Brown; Commissioner Doris M. Trinley; Commissioner Dennis J. Sheridan; and Commissioner Louis P. Stern. Also present: Town Attorney Glen Torcivia; Town Manager Kathleen D. Weiser; Town Clerk Beverly M. Brown; Police Chief Craig Hartmann; Finance Director Cale Curtis; Public Works Director Jack Lee; Library Director Mari Suarez; Assistant to the Town Manager Zoie Burgess; and members of the public. Pledge of Allegiance: The Pledge of Allegiance was given, followed by a moment of silence. Civility Pledge: The Civility Pledge was recited by the Town Clerk. 1. ADDITIONS, DELETIONS OR ACCEPTANCE OF AGENDA: Mayor Featherman called for any additions or deletions. Receiving none, the agenda was accepted as submitted. 2. PUBLIC COMMENTS AND REOUESTS: Town Attorney Torcivia noted for the record that he would be leaving the meeting at 5:00 p.m. Bob Crozer — 4201 Intracoastal Drive I am here to comment on the renovation project for the Police Department. I have lived here for 14 years. I want to voice my approval of this. I know it is at a very tough time with taxes, raising the rates, and all of those issues. When I think about the Police Department in any desirable community, they are the lynch -pin, and I do not feel that they have been treated that way. I am glad that we have a great Library and common areas, but what should be a top priority for any town has been left to the way side for many, many years. As a future voter and a resident, I want to share with you the reason why I live here is because of the safety of this community, and the way our lives are. The Police Department is such a lynch -pin in making that happen. I am here to share with you my feelings that even if you have to get a loan, it is time to do something with this project, and give our community and Police Department the tools they need to be successful. Town Commission Budget Workshop Meeting August 07, 2012 Page 2 of 20 Ira Oaklander — 1001 Russell Drive I disagree. I think we have a great Police Department, and we always have, but I do not think it is time to raise taxes, and I do not think it is time to build a project of this quantity. We have a great facility as it is, and to expend the amount of money that we are talking about spending and raise taxes, this is not the time to do it. I think to do it without a referendum to the entire town is wrong. I think if we are going to look at raising taxes and spending this kind of money above the $350,000 that we are allowed to spend, I think is wrong. If we are going to do it, I think it needs to go to the town for a vote. Carl Feldman — 3210 S. Ocean Blvd. I am listening to all of the comments, pro and con. I don't think that it makes any difference to get up here and speak because nobody listens anyways. You know how you are voting. You know what you are doing. It is obvious from this meeting what the future will be in this town. You are going to spend what you want to spend. The limits are off. The gloves are off. You do not have to fight anymore. Do what you want. Elyse Riesa — 1133 Boca Cove Lane I want to first say thank you to some of you who have worked very hard to lower our taxes the last several years. I have been here for six years, and I am very appreciative, and voted my appreciation in the previous election. However, in reading some of the information that has been floating around in some of the local newspapers, it has come to my attention that the Town Commissioners want to change the Charter and raise the amount of money, in which, you will be able to spend without the votes of the people. I really thought that we have given you our trust, and you are not abiding by our trust. It is very difficult right now for me to understand that you want to make expenditures without the public having any real opinion on this at the polls, especially since this is going to cost us a lot of money and taxes that we weren't having before. I personally do not see anything wrong with the facilities that we have. I love the Police Department; I think they are absolutely terrific as I have told them that in every town meeting we have. They have kept us safe and sound. Why do we need to do this major renovation is the thing that concerns me the most. I am very, very disappointed if you already have your opinions made up, and you do not take into account what fellow citizens have to say. Then we would be feeling that our opinion didn't count, our vote didn't count. I really hope that you listen to some of us today. Elizabeth Susskind — 2629 S. Ocean Blvd. I have shared the same feeling as the young lady before. I think that we have to have some fiscal responsibility especially when we do not know what the economic situation is in our nation. I have a question for the Chief of Police. If we make a nice facility, is that going to improve his job? Are they going to be doing abetter job? Shouldn't they be doing the same job in this current facility? I do not see where a facility for the Town Hall, the Police Department or the City will make a difference in the quality of service that we are getting from the police. Am I right? Can I ask a question of the Chief of Police? Mayor Featherman — That is alright. Manager Weiser — He will be giving a presentation. Mayor Featherman — Let her finish, please. Mrs. Susskind — Yes, but I do not see where it will affect the quality of service that we have from the police force. Mayor Featherman — Town Manager, please allow her to finish her remarks without interrupting. Please go ahead. Mrs. Susskind — I think that we do have to have fiscal responsibility. We do Town Commission Budget Workshop Meeting August 07, 2012 Page 3 of 20 have to look carefully at the budget. We all have the same interest and heart in this town. We all are willing to do what is necessary, and we should look at issues where our reserves are too low. I noticed that there is new plumbing that needs to be installed; those are things that are important to the Town, and should be addressed as needed. Taxpayers understand this, but what they do not see are costly renovations coming into play right now when now is not the time. Its not like we are living in a shack here, everyone has a roof over their head with a pretty good facility. I think this should be considered by all of you. Taxpayers are the ones that put you in office, and the taxpayers are the ones that will vote you out. This could be a really big issue with taxpayers and residents of the Town. I have spoken to a number of my friends who have multiple properties. Some of them rent and depend on the rental income for their lively hood. A lot of people are not getting the rent they use to. A few years ago, rents were great when people were defaulting on houses and had no place to go, but today is a different story. I am speaking for about 20 people who couldn't make it, but believe me they have a vote also. Mayor Featherman — The Town Manager has a question for you. Manager Weiser — No, I was answering her question. She was asking the Police Chief a question. I was saying that he would be answering your question in his presentation. Mayor Featherman — As the Town Attorney is leaving early, do any of the Commissioners have any questions. Hearing none, the Mayor proceeded with his inquiry. In reviewing the quotes for the renovation of $750,000, there are additional quotes that have to come in for audio, television sets, and new furniture. Is that all going to be included in the quote or is it just going to be individual? I think a lot of people have brought this up to me, and I think this is important because it could run one -million and a quarter to one -million and a half. In the past we have experienced this, and I just feel I would like to allay the fears of people in the community as to whether it is included or not. Town Attorney Torcivia — It is premature. Assuming there will be an RFP, that the Commission approves that goes out requesting proposals due to the construction and any other items that might be ancillary that are not in the construction like audio, would be a separate contract that would come to the Commission. I believe that you would have control over every step of the process as to every contract you are signing. Mayor Featherman — But everything in the renovation, will be including everything not only interior but into the renovations itself like the furniture, lighting, computers and television. Town Attorney Torcivia — I would think the overall budget would break down the furnishings. Mayor Featherman — I have been asked by a lot of people what is included in the overall budget. Is it the overall package or including the approximation of what it will cost in addition to the amount of the renovations plus the furniture, plus the AV, which is the recorders, computers and all? Is that all included in the renovations because it will all be new? That is a very difficult thing to come up with. Town Attorney Torcivia — I think that is the decision you will make as you go through the budgeting process. If you are going to separate those into separate projects, or have that all as one master project. You can do it either way. It is up to the Commission. Mayor Featherman — That is why I am asking you how do we figure it? I have spoken to people who have done renovations in the past, and they said that when they have come up with a price, instead of running a million dollars it could run a million and a half or whatever. So I want to know, what is included in it and I would think the Commissioners would like to know as well. Town Commission Budget Workshop Meeting August 07, 2012 Page 4 of 20 Commissioner Sheridan — I feel as though this particular project has certainly not been approved by any of the Commissioners at this point. We are here look and find out how much it is going to cost, then we will make our decision. I don't see that it is a done deal that we have to ask what certain things are going to be, lets find out if we are going to do the project or not. We may not do the project. Mayor Featherman — Well first of all, we asked for a vote of the general public if we should do it, but it was turned down by you today with the exception of the first article that we voted on. I think we have to have a vote by the voters in the town to see if they want to invest more money because we find that we are in a very difficult time in the economy. Look, I like the Police Department. I think the Chief is doing a good job and the policemen are doing a good job, but if we have to go into more taxes, and this is going to happen this year after the Presidential Election no matter who wins, and if we continue to raise our millage, that increases our taxes too. We have taxes on our mortgages, we have taxes on everything else that will increase. We have to have an input by our people here. I really think they have to have a say whether they want to have an addition put on or a capital expenditure put on. I said it before. We need to have that as a question for the people if they want to have capital expenditures in these critical times, or not, or what we should add to the total amount of the bill because now that we passed it we have not only this but we have piping and so forth that is needed for the water; people have to have clean water. I feel it is important to know what our costs are. Commissioner Stern — The Commission would like to know if this project will happen and what the final costs are. However, we are not there yet. We have a budget to work on today and that is why we are here. Whether it is a part of the budget or not, we do not know that yet. Mayor Featherman — That is a very good point, but we have a lawyer here if we want to get interpretation. Commissioner Stern — We are going to have more than one workshop, and we will have two public hearings, so we have time. Not to cut you short, I think your comments are appreciated but maybe a tad premature. Elyse Riesa — 1133 Boca Cove Lane I was hoping that we could bring up the infrastructure of the town versus renovation itself. It seems to a lot of the residents and neighbors in the town that I know, that the most important thing that they are having difficulties with involve the infrastructure of the town such as the sidewalks. The sidewalks in our town are disgraceful in that you can trip, fall, break your neck especially if you are walking in the dark. It appears like it is taking a very long time for that to be repaired so I am sensing there isn't enough money in the budget to cover it, and I would think things of that case would be much more important than working on a renovation for a new building that we quite frankly, as a Town, have not voted on. I would sincerely hope that we get that opportunity to vote as a town and you wouldn't unilaterally take us out of that voting process. Mayor Featherman — To make a note, it was discussed to take $65,000 to repair the sidewalk temporarily. Then it was moved to $75,000. It was voted on to correct that and hopefully we can get that done very promptly because it is important for the safety of our people here. Town Commission Budget Workshop Meeting August 07, 2012 Page 5 of 20 3. PRESENTATION OF 2012-2013 BUDGET: Town Manager Weiser — I am going to turn this over to Cale Curtis, Finance Director. A lot of the information in the presentation you have seen before, but for the benefit of the audience and those watching at home we want to give an overall picture of our entire budget. Cale Curtis, Finance Director — This evening's presentation is very similar to the one you received on July 20"'. There are a few changes and the changes reflect the tentative maximum millage rate that you set at that meeting. Town's Taxable Value — Gives a historical look at the Town's taxable value. In 2007, at our high point we were valued at $2.3 billion. A short six years later we are at $1.75 billion, which is roughly 25% less than our highest point. Without adjusting taxes and increasing rates, we have actually lowered tax rates. That is lower than the amount of revenue that we have brought in. We have been giving the same level of service with less revenue. To cover that, we have been using our unassigned fund balance. Understanding Your Tax Bill — Gives a breakdown of the resident's total tax bill. The total tax bill is split up by multiple taxing authorities. The largest on your bill in the School Taxing System, which receives 41 % of your taxes as they did in 2011. The next largest in the county at 25%. Highland Beach comes in third at 22%. The remaining 12% gets split up between multiple special districts. Millae Rate Scenarios — You will notice the first change on this slide. I have added the last column "Tentative Maximum Rate Set by the Commission." The rate you set was 3.95. That brings in approximately $274,000 in additional tax revenue. The new revenue decreases the amount taken from the unassigned fund balance by the same amount. The rate that was proposed in the budget was 3.7876. Millagge Rate Effect on Average Condominium — Another change was to the middle column "Tentative Maximum Millage Rate 3.95." What is being shown is the change from last year's levy to three different condos, if the Commission were to choose to stay with the 3.95 rate. For example, an average condo in Seagate, their levy last year was $425. If the Commission chooses the 3.95 rate, that same condo would pay an additional $69 on their tax bill toward Highland Beach. The same goes for the Highland Beach Club; last year's levy was $851 and there would be an additional $135. For Toscana, last year's levy $2,555, and there would be an additional $408. The additional amount they would be paying would go toward closing the general funds operating deficit. We have experienced this deficit for the last four or five years; we have made up for it with the unassigned fund balance. We have drawn that fund balance to a level that we do not think is feasible anymore. What we are proposing is to close that gap with taxes. Unassigned Fund Balance — Here is a historical look at the unassigned fund balance. We have been using the fund to cover our operating deficit. At the largest point, we have taken over $1 million in a year. We are estimating that at the end of our next fiscal year that our fund balance will be at $2.5 million. General Fund Proposed Budget Highlights — Some highlights of the general fund proposed budget. We have experienced an increase in our taxable value, which is the first time in five years; it is a modest increase of 1.5%. We have balanced the budget using a tax rate that closes our operating gap. We are using unassigned fund balance (surplus funds) to cover capital projects this year as proposed $764,000. We are adding increased code enforcement through existing staff and restructuring a department. We are proposing to do the walk -path that the Mayor referenced earlier. The Police Department and Commission Chambers renovation is included. There has been no change to personnel services, or the reserve for contingency; the line item that the Commission appropriates for unanticipated expenses throughout the year. Ca pital Town Commission Budget Workshop Meeting August 07, 2012 Page 6 of 20 Outlay — Capital outlays that are proposed this year, which are funded through the unassigned fund balance include the following: Public Works — repair to Highland Beach walk path ($75k), replace two air conditioners in Library ($33k); Police Department — replace high mile patrol vehicle with police vehicle ($33,200); Building Dept. — upgrade permit issuing/tracking software ($7,500 est.), purchase filing cabinets ($1,250); Library — purchase of books, movies, CDs, and other library media ($60k est.); Other General Gov't — Chambers/Police Dept. Renovations [construction] ($750k), Chambers/Police Dept. Renovations [equipment, ancillary] ($75k). Director Curtis — At this point of the presentation, I will ask Police Chief Craig Hartmann to discuss the Renovations Project. Craig Hartmann, Police Chief (Renovations Project) — In January of 2009, when I got here, this was already in the Capital Improvement Plan. Back in 2008 they were identifying the needs that the facilities were inadequate. I have correspondence from three chiefs prior to me in 2006, that identified it as a dysfunctional, inadequate and small police department. This goes back quite a way. (The Chief reviewed the existing floor plan of the commission chambers and police department.) There is a walk room and restrooms that go right through our facility. We have three separate spaces for this police department. The department is dysfunctional, substandard, not big enough and we have adapted to three separate spaces. We have 12 lockers and 15 sworn officers, one civilian and three reserve officers; that is 19 personnel for this department. This is the biggest department in the town with one of the smallest, oldest facilities. We do not have enough lockers for all of our officers; that is a big deal for cops. They work 12-hour shifts, and quite often we have officers here for 16 hours. We do not have a male/female locker room, which is pretty standard in facilities. In the locker rooms, there are lockers, showers and stalls. The male shower has not worked in years as it does not drain. Currently, when you come in to talk to our receptionist, there are officers with their back to the public. It is a busy area, a noisy area. It is certainly not setup like any other police agency that I have been to. Our dilemma to create a unified, one space department is a challenge because of public restrooms, the chambers, and a walkway, which is in the middle of the entire structure. The proposed plan would connect town hall, and accomplish some of the things we want by updating our restrooms as they are not ADA compliant. We had a commissioner that fell in the bathroom. This would be the same double doors you would come in. What happens in our old facility, everybody walks by the front door of the police department that has never been here because these double doors draw you in, so people wonder in the hallway looking for the police department. This brings you right in where it is connected to town hall, two bathrooms have been expanded and updated to be ADA compliant, and your able to get right in to the police department or the chambers. We created a lobby similar to what we have except the officers' workspace is not on top of the assistant, people are able to come into a small interview room but that is key, most places have that — police departments have that and we do not have that. When we are taking a report of somebody in our lobby, they are sitting there talking to people, while other people taking in critical, private information, while other people come walking in. This gives us a male and female locker room. It gives us enough lockers to accommodate our whole police department. It gives us a workspace for the officers. We can do training and briefings. They are on 12-hour shifts. Everyday that they come in they write reports, they have tele-types, there is a lot that goes on. This room would accomplish that. Cabinet space — they do not have their own desk, their own space and they need some type of filing system as they have subpoenas, paperwork. They would have training online; a variety of Town Commission Budget Workshop Meeting August 07, 2012 Paae 7 of 20 different things that would go on there. This would continue on with the office space we have now with the sergeant, lieutenant, chief, conference room, additional room for storage, additional office possibly for volunteers, a detective, or a victim's advocate. We get people that come in that have been victimized that need information, need help through that process. We like to identify that and bring someone in on a part-time basis to help with that. We want to create a Highland Beach Emergency Operation Center. Right now we don't have that — a nerve center. When we prepare for hurricane, critical incidents, natural disasters, there are a lot of facilities that setup that rooms for that — a war room. You are able to get communications in, data in. While our residents are leaving the community, we hunker down here and officers work shifts around the clock. There is a lot of information that comes in through the Delray EOC, Palm Beach County EOC, and national weather stations, which can all be coordinated for the Town to be setup for one of the conference room to be an operations room to do double duty. You have heard me talk about state accreditation the prior year, and those things are critical to keeping your agency as a professional, model agency. No matter who your chief is, those standards are in place. Right now we have an evidence room that does double duty with our server. For everyone who says that they have a great facility, you haven't been in there and don't realize the dysfunctional and problems and challenges that a law enforcement environment in a 24-7 operation create. Certainly, not an ideal situation. Our evidence room would be alone, locked and secured, and wouldn't do double duty with our server and our national database, tele-types, and things that we have in there. I think what we asked of the architect, did a great job. I give the Town Manager a lot of credit. I think over the years they were trying to get the police department to adapt to the space that it was not created for. I think they finally said lets adapt this space for the police department for what is needed and create that type of police department. I heard Mr. Resnick say earlier today that we have a magnificent Library, and we do and we are proud of that. No one comes in and says that they are proud of this police department facility. Everyone tells us that they love the police department, and I know they do, they are fantastic, they support us. I hear that all the time. I am identifying the needs of this agency and facility that needs updating and where it will get us, what we want to get done and accomplish. This is this community's facility — not the Chiefs, not the Commissioners', it is this community's facility that we are going to create. The Commission Chamber is an afterthought. You have to move that to connect to this whole space, and make this a one functionality police department. We are really please with the architect; they really listened to us. They kept the cost minimum and stayed within the existing roofline to get this done, so that is what you have before you. I'm glad to answer any questions. Mayor Featherman — Are there any questions for the Chief? Commissioner Stern — No questions here. Commissioner Sheridan — No questions. Vice Mayor Brown — No questions. Commissioner Trinley — No questions. Mayor Featherman — Thank you very much Chief. Manager Weiser — I will turn the presentation back over to Cale, who will finish the presentation on the budget. Director Curtis — Thank you, Chief. Moving on with the presentation to our next slide. Un unded Bud get Requests — Has a number of unfunded budget requests that came from departments that we had asked them to put off. I give this to the commission as far as informational purposes to see if Town Commission Budget Workshop Meeting August 07, 2012 Page 8 of 20 the Commission feels that some of these items need to be funded, or not. First are some iPads for the Commissioners ($1500), as we move along with technology, there will be a time you will put your agendas and presentations all through electronic means. Mayor Featherman — Can you tell us the savings that we have on iPads because I know they are using them in some groups that I am in? Director Curtis — A savings as far as...? Mayor Featherman — Time, paper, and getting information to people inexpensively. Director Curtis — I think you have identified some of the savings. I do not have a dollar figure attached to those. Again, these items are not included in the budget right now. When we do head down that path, we will certainly have savings information to provide a cost analysis for you all. Next is in the Public Works Department, we have taken out the replacement of one of the 4X4 trucks that we have ($28k); replacing the mesh fence on the north side of the RO plant ($5k); and GIS mapping software ($15k) had been defended and taken out of the budget as well as another one of the patrol vehicles that is at or exceed 100k miles has been eliminated from the proposed budget. Director Curtis —Potential Budget Reductions — Also as part of the proposed budget, we have given you some potential budget reductions for the Commission to consider and think about. What I want to do is highlight that these suggestions deal directly with employees. We have asked the departments to cut and cut and cut their operating budget each for the last few years. There is only so much we can cut without affecting the services we put out. As you see, the next ideas we are proposing, not recommending are to freeze/eliminate employee holiday bonus gift cards ($4k); reduce merit increase by 1% increments ($13k), which is important to note that this will only affect town staffs non -negotiating members; a potential budget reduction by eliminating the police supervisor's SUV request ($33,200); eliminate advisory board stipend ($7,500), which is the $25 per meeting that is paid to advisory board members; eliminate board appreciation luncheon ($3k); up employee insurance contribution by 10% increment ($4,500); and eliminate walk path repairs — replace with design/architect for streetscape project ($45k). Mayor Featherman — What exactly does that entail? What is the total amount you are figuring on? Director Curtis — We do not have a total amount as far as construction. What we are proposing is that a design architect may come in at $30k for the engineer to do it. What we have right now in the proposed budget is a repair to the walk path of $75k. We are proposing to take that $75k out and replace it with a design architect to do an overall... Mayor Featherman — That could run $800,000-900,000. Director Curtis — Yes. Mayor Featherman — I don't think we should be putting that money up right now. Director Curtis — We wouldn't be putting that in this year's budget. We would only be putting up the money for an architect. Mayor Featherman — If we are not going to go into something, why should we put up the architect's cost? When we are ready to go to get a quote on it, then we should get an architect's quote. We are spending a lot of money, and I don't know what it is useful for. Manager Weiser — Mayor, if you remember, in prior commission meetings, you had talked about the possibility of doing an entire streetscape with the walk path. Mayor Featherman — Yes, but you are talking $800k. Manager Weiser — That is correct, but that is not a policy decision for Cale. That is a policy decision for this body. If you would want to go that route, and forego the repairs and do an entire project that would resurface. Probably do decorative streetlights, decorative benches and entryways for the community. What we would do is forego the repairs, and hire an architect then budget for the project in the... Mayor Featherman — Town Manager, we have already approved, from my understanding, the repairs of the sidewalk. Town Commission Budget Workshop Meeting August 07, 2012 Page 9 of 20 It was told to us that it would run about $800k with tile on both sides where people could trip on that tile, and so we decided to just have it repaired where it needed to be. Manager Weiser — That is why the repairs are in this budget. Then you had a further conversation saying maybe we should look at an architect. This is not in the budget — it is given to you as an option as policy option if that is what you want to do. Mayor Featherman — That is good so we all know that. Vice Mayor Brown — If I may say a few words about the walkway, we also talked about putting it in our strategic plan, which is our three year plan, so that is why we are talking about it here if we are going to repair it in a year or two versus year three an option to save $45k. Director Curtis —Thank you. Water System Proposed Budget — Moving on to Enterprise Funds. I will give you a brief rundown on the water system. We have total estimated revenues of $3.5 million, which has left us a little extra on the expense side. We are anticipating that our revenues will exceed our expenses by $7,602 on the expenditure side. Sewer System Proposed Budget — Our revenues and expenditures come in as anticipated. We will have just about balanced it. We will have a little less than $9k in excess revenue. It is a good sign for both of those funds. At one point, the water system was loosing money. S Year Capital Improvement Plan — The five year Capital Improvement Plan is something new that we are introducing to the Commission this year. There has been one change since the presentation that was given to you back in July and that is in 2014-2015 we have received word that we are going to have to replace the fire truck a little earlier than anticipated. I am working with Delray Beach Fire Chief Danielle Connor and gathering all details to make a formal presentation to you. We are anticipating that somewhere in 2014-2015 a cost of $850k. They have also given us a lease to buy option where is would be $130k over seven years. It adds a little bit to the cost, but it is not as much upfront costs. Mayor Featherman — Have you gotten an idea of how long a fire truck lasts? I have spoken to people in fire departments, and they say it runs 25 to 30 years. How old is our fire truck now? Director Curtis — Our fire truck is 18 years old. Mayor Featherman — I see. It would cost us at least $850k or more? Director Curtis — That is the estimate that we have received so far. As part of the recommendation from the Fire Chief, we are going through an analysis to determine the operating cost, and the out of service cost that are being incurred right now. Right now I am trying to get it on the Commission's radar on the five year Capital Improvement Plan, so you have an idea of what may come in the future. Mayor Featherman — The most important part is the water because we can have good water going out and some of those pipes may bring in water that is not drinkable. That has to be replaced — the water system. I see a lot of these things that we are looking at as pretty stiff as far as the budget for the future. I don't think that we pick those fire trucks and all as a priority. Is that correct? Director Curtis-- I don't want to make that distinction as to whether the fire truck is a priority over the water replacement. What I can tell you is that we are dealing with two separate funds of the town. The water fund is going to fund the replacement of its infrastructure. Mayor Featherman — If that is needed, then we should have it because people need good drinking water. Director Curtis — Absolutely, that is why... Mayor Featherman — The fire truck has eight to 15 years left in it; I would think about it a second time. Director Curtis -- Again, we are going through that cost benefit analysis. Gathering the useful life . and all that information. What I am giving you here is what may come out of it. We are not there yet though. Director Curtis —Budget Re-Cap/Action Items — Recap: 1) The Town Commission is poised to "stop the bleeding" of the unassigned fund balance by adopting a millage rate that generates Town Commission Budget Workshop Meeting August 07, 2012 Page 10 of 20 enough revenue to close the on -going operation budget gap. 2) All proposed capital improvements will be funded through the Town's unassigned fund balance. I want to stress to you all that even without any of these capital improvement in the budget such as replacing vehicles, renovations. We would be proposing a millage rate that closes the operating budget gap with an increased tax rate. We have been providing equal services as in our high value in 2007 today with less revenue. Again to do that, we have been using our surplus funds. I am recommending that we no longer do that. We need to close that gap regardless of capital improvements or not. Action Items: I am going to ask that the Commission provide us with a little direction on any of our unfunded budget requests that I have highlighted in this presentation. We would also like direction on potential budget reduction measures and at this point, I will turn it over to the Commission for any questions you may have on the budget. Thank you. 4. COMMISSION REVIEW, QUESTIONS & DISCUSSIONS: Mayor Featherman — Commissioner Sheridan, do you have any questions? Commissioner Sheridan — Mayor are we going to go through the budget page by page? Mayor Featherman — I would prefer we do. That would be the best way to do it. Thank you very much Cale for the presentation. Vice Mayor Brown — On the five-year Capital Improvement Plan, I think the Commission needs to come up with the funding for the walkway. I think we need to fund the Library at about year five of the five-year plan. I think we need to include the replacement of police vehicles because I know he wants to replace police cars over a period of several years. I think we need to show that in there if we are going to use it as a working tool, which I think that is what we are trying to do. Mayor Featherman — There is one thing I must caution you about this. We don't know what the economy is going to do at the end of this year. No matter who gets in as a Republican or Democrat, taxes will probably go up and costs will go up. If we are hit with cost here, as well as in the government itself a lot of people that are retired will feel it very difficult in our own community. Because of the economy being so low right now, and being so unaccustomed then they are generally, I think we should look closely about raising taxes to that extent. We will go line by line item. Well lets go page by page. It has been underlined that the Town has drawn down the unassigned fund balance of close to $700k to $1 million a year. The last two years I know that I have been Mayor we have drawn down about $800k. We are down to $4.2 million. We have put about $50k back each year from what our finance manager has told me. Are we in agreement to that? We are at $4.2 million. Vice Mayor Brown — That is not the unassigned. There is a lot of that fund that you are talking about in that figure you just threw out that are committed and are assigned i.e. they are not available for us to use as unassigned funds. Mayor Featherman — That is what is called a reserve fund, which we use in case there is a hurricane or an emergency that we draw upon it. Now when I look at the various, and of course you folks have looked at it, I'm sure. I looked at the amount of percentage that people take in their operating budget. They have gone to about 16% of what their operating budget is to get to the minimum amount that they should have. If you have 15-16% of $10 million, that is $1.7 million. We have $4.2 million. How much is that? Director Curtis — Mayor, if I may. If you are on page 3 looking at the fund balance chart, there are a number of classifications for fund balance. The 16% that you are speaking of is the fourth item down called "Assigned Budget Stabilization". We have set aside Town Commission Budget Workshop Meeting August 07, 2012 Page 11 of 20 17% for budget stabilization to provide for the hard times. It essentially equates to two months of operating expenses. Mayor Featherman — What do we have right now in the reserve fund? Director Curtis — As of today, we have $3 million in our unassigned fund balance. Moor Featherman — Do you draw anything down from that? Director Curtis — In the proposed budget, we are proposing $1 million to be taken out of that. Mayor Featherman — I see, so you are proposing to bring it down to $3 million? Director Curtis — No, it will bring us down to $2 million in the unassigned fund balance that the Commission can use. Per the policy that you set, you have designated a portion of the total fund balance that you speak of, the $4 million, as being designated for budget stabilization, disaster recovery, or for the current budget. Mayor Featherman — When you stated we have $800k were drawn each year the last two years, have we increased that amount of money to withdraw now? Director Curtis — No, we haven't. We have drawn down on it to cover the operating expenses. Mayor Featherman — From $800k or more? Director Curtis — Yes. This year's draw down was $730k. Commissioner Stern — It says here that Town policy says we should have a minimum of 16.7%. What does three million, which we have now, represent percentage wise? Director Curtis — A percentage of the general fund budget all depends on the amount in the general fund. As you speak right now, three million is 25 or 26%. Commissioner Stem — If we take it down to two million, where will that take us to? Director Curtis — 18 or 19%, based on the figures here. Mayor Featherman — Let us please continue to the next page. The part where patrol cars have been reduced by one, how many do we have now? Director Curtis — Six marked vehicles. Mayor Featherman — Police Department and Chambers renovation is included of $750k. Director Curtis — Yes sir, it is. Mayor Featherman — Where is that included? Is that in this year's budget? Director Curtis — That is included in the proposed budget you have before you. Mayor Featherman — How do you intend to pay that? Director Curtis — As of right now, we are proposing to pay for it out of our unassigned surplus fund balance. Mayor Featherman — So that will bring us down to three million dollars? Director Curtis — That will bring us down to two million dollars. Total capital expenditures this year are estimated at a little over one million dollars. We have three million in the bank right now. We take one million out to fund these projects; we will be left with two million at the end of FY 2013. Mayor Featherman — There is a one and one quarter increase in property value with an increase tax rate to produce $6.65 million, can you explain that to us? Director Curtis — Year over year our property values have increased by 1.4%. It is amounted to about $25 million. It is taken us from $1.73 billion to $1.75 billion. $25 million may sound like a lot but on the scale of things it is a very small amount. The reference to producing $6.65 million in general fund revenues has to do with the proposed tax rate of 3.7876. This tax rate, the amount of revenue we are proposing to bring in, again, closes our operating budget gap and makes the general fund whole. Mayor Featherman — Okay. Is there anything anyone would like to comment on page 6? (No response). Page 7 on capital outlay, the public works pathway we have estimated at $75k. We have two air conditioners in the library that one is $22k and another air conditioner at $11k. We have audio and visual estimated at $75k. Replacing of one patrol car at $33k. There is a upgrade permit tracking software at $7,500. A new file cabinet set at five for $150. In the Library, we Town Commission Budget Workshop Meeting August 07, 2012 Page 12 of 20 have an estimate to purchase new books at $60k. Is there any questions on that? Vice Mayor Brown — None. Commissioner Trinlev — How did you come up with a 20% reduction from last year for the Library purchases? Director Curtis — All departments are asked to find 10% in their budgets. The Library Director found 10% in hers in the purchasing of books, CDs, and DVDs. Looking at the budget from prior year to this year, prior year expenses came in just a little over $60k. Without further explanation, we figured we would take the 10% reduction, which brought it down to $67,500 and bring it down to the $60k that was spent the year before. Mayor Featherman — On page 8, on the GIS mapping software, who would use that? Manager Weiser — It is primarily Public Works, but if you are familiar with GIS mapping software, you can track everything from when they have had police calls, pipes break, or anything on a particular piece of property. We are kind of behind the ball not having a GIS system and you may want to consider putting this in the budget. Mayor Featherman — Who's car would it go into? Who would it reflect on? Manager Weiser — It is not something that goes into a car. It is a computer software system. The police can use it. It is primarily public works because they can map all of our water systems throughout the town. Then you can add particular properties to see what has happened and particular permits. It is a program that all departments can use even the Clerk's office can use it to see what motions have been made at a Planning Commission meeting and on a piece of property. It is one of those systems that keeps branching out for the community. I would encourage you to look at adding that into the budget. Mayor Featherman — On the police supervisor's SLTV, how would that be utilized? That is $33k. Chief Hartmann — That is a utility vehicle by taking two vehicles out of the fleet and having one. There will be one supervisor utility vehicle because it sits up higher to get through some of the standing water, get onto the beach in case of an emergency, tow some of the equipment that we have like our message board, or the beach patrol vehicle when it goes over for service. The way the storage units are on an SLTV, we can store more emergency equipment all in one vehicle as opposed to two vehicles. You would be replacing a vehicle that is over 100k miles in October. Vice Mayor Brown — It will be fully outfitted? Chief Hartmann — Yes, just like the police cars. You will see it everyday. Commissioner Trinley — Reduction measures. Last line, most of these reductions affect employee and volunteer salary benefits. What kind of benefits and salary do volunteers get? Director Curtis — Volunteers do not get salary and benefits. What I am eluding to is that it affect the $25 per meeting stipend. Mayor Featherman — We are really asking for a small amount for the time people put in. I think they should be compensated for that time, but I do not know what the other commissioners think. Commissioner Stern — Totally. Commissioner Trinley — I think it is only fair that we give them some kind of stipend for their time, energy and expertise. Vice Mayor Brown — I would like to talk about the unfunded request for the 4X4 Public Works truck. Are we talking in this budget that it needs to be replaced that bad, or are we talking downstream a bit? Mayor Featherman — I would assume it is downstream. Vice Mayor Brown — It is an unfunded budget request for this budget year. Jack Lee, Public Works Director — We proposed buying two trucks this year. One for utility maintenance, which is this 4X4, and a two - wheel drive truck for the water plant operators. All three of the trucks we have right now, my truck included, is almost 10 years old. The salt air around here is starting to eat these trucks up Town Commission Budget Workshop Meeting August 07, 2012 Page 13 of 20 from the bottom up. We are starting to have some mechanical difficulties with them. I have spoken to Bill Moore, Utilities Superintendent, and we decided that we could put this off for one more year if it is your desire. Mayor Featherman — Page 9: Any questions on that page? Vice Mayor Brown — On the Capital Improvement Plan, I would like to see the items on there that I previously brought up to include the Library in the out years, include the walkway and include the police cars. Director Curtis — Does the Commission want to have a say of when you want those in? Vice Mayor Brown — I personally would like to see the walkway put in the 2013-2014 timeframe. Mayor Featherman — Are you talking repairs or the full $800k or more? Vice Mayor Brown — There is an option. I would like to do the full re -do of the walkway. I would like to look at it in the 2013-2014 budget. Mauer Featherman — I think we should look at it after next year, not this coming year to see if we want to consider it because we do not know what the conditions will be and not spend money like a drunken sailor, in my mind, of close to $850k-900k is reprehensible especially when we have the water works, which must take place if people want to have good water. I want to see the pipes changed. That should take preference over everything. Vice Mayor Brown — Yes and that will come out of the water fund, not out of our general budget. Commissioner Sheridan — Exactly. Vice Major Brown — How do we do this? Do we get it put on by vote? By motion? Do we kick it down the road? Mayor Featherman — Let us put this on to all the voters, so they can vote rather than us because you are looking at something that costs a lot of money and maybe they don't want to consider that right now. Vice Mayor Brown — I have heard two people get up today and talk about it. Mayor Featherman — Since the beginning, people came out because they want to do repairs. The people voted to do repairs. So I don't see why we should go into something like that for something that is going to cost us so much money and to boot when I saw the design they had on the tile for both sides, people can trip on that and fall and hurt themselves. Vice Mayor Brown — There are other designs. That was just one. Mayor Featherman — That is the one that you showed, sir. Vice Mayor Brown — I beg to defer, but whatever. Manager Weiser — May I make a suggestion? The Capital Improvement Plan is kind of a bonus to this budget. It is something that you can look at and can be changed. How about I put it on a future workshop and we can work some more on it. It does not have to be something that is standing. I can move some stuff around by putting it on a future workshop and we can work on it some more. We are going to have the presentation from the Fire Chief and we will have more information regarding the walk path. So we can put that on a future workshop agenda for more discussion. Commissioner Stern — That is a great idea because we really need to work on the budget, and not what is happening a few years from now. Manager Weiser — Correct. Mayor Featherman — On the conclusion, anything on that page? (No responses.) Looking at the organizational chart. Now let us move onto the budget itself. Page 12: It has a proposed rate for the budget fiscal year 2012-2013 and the rate has jumped to 3.7876 for 2012-2013. I'm sorry it moved up to 4.6571 for the year 2012-2013. Vice Mayor Brown — That is the wrong one. That is the majority vote. That is not the one we are looking at. Mayor Featherman — But that is what he has here on the forms. Director Curtis — Sir, look down and each of the columns and rows has a number or a letter identifying it. If you go to column "F" and row "4", you will see the proposed tax rate is 3.7876. Mayor Featherman — I am sorry. I am a little confused. Okay. While you have the proposed rate of 3.7876, you also have a majority vote for 4.671. Director Curtis — Yes, and you all did not choose to go that high. The highest rate you went to was 3.95. This is just for informational Town Commission Budget Workshop Meeting August 07, 2012 Page 14 of 20 purposes only so you can see what your highest level of taxing authority would be. May Featherman — What was it this past year? Director Curtis — The current year is 3.4070. Mayor Featherman — This would give us 38 points of mill increase. What does 5.744? Director Curtis — That is a moot point. That is the maximum majority millage rate when you combine the debt service rate. We are not at that rate. We cannot go that high. Mayor Featherman — We have 4.70 as a rate in there. Director Curtis — 4.7049. Mayor Featherman — Are there any questions the commissioners have? We will have to look this over again. Commissioner Trinley — What happened to our 3.95? Director Curtis — I prepared this document before we had that meeting. That was a rate that was made in a motion by one of the commissioners. That was not a proposed rate. Commissioner Stern — That is the rate that we placed as our maximum rate and we never expected to go that high. We had to propose something. Vice Mayor Brown — If you look at that, I ran some numbers on that. At 3.95, the ad valorem taxes would be $8,209,937 versus the $7.9 million. That extra money could be used to rebuild our reserves. Mayor Featherman — That is going to be taking on our people considerably, am I correct? Director Curtis — This is the scenario that a commissioner made in a motion and we adopted as our tentative millage rate as 3.95. This is the highest rate the commission can adopt; you can not go any higher. Mayor Featherman — What would Bel Lido go up approximately? Director Curtis — You could possibly say that a house in Bel Lido might be of the same value as a penthouse in Toscana, so you might see an equivalent amount. It all depends on the assessed value of that individual home; they are all going to be different. Mayor Featherman — Are they being reassessed now? Director Curtis — They are assessed at the time of sale or at an owner's request. The property appraiser comes and issues an assessed value every year; it changes every year. Mayor Featherman — Are there any other questions anyone would like to bring out? (No responses.) Page 13: The General Fund. The proposed budget will bring it up to $11,225,000 against an adopted budget of $10,139,000. So it went up a little over a million dollars that we need to get taxes for. Director Curtis — Actually, the main difference with the budget has to do with our capital items. We are not using taxes to fund those. We are using our unassigned fund balance. If you look at the bottom line the appropriation from reserves, that is us proposing to take $1,037,880 from our surplus funds — the reserve unassigned fund balance. Mayor Featherman — The utility fund. That runs about the same. The only difference is the budget proposed for 2012-2013 is over a million dollars more. Director Curtis — We have actually seen slight reductions in the enterprise funds in the water fund, and the sewer fund we are seeing modest reductions in cost. Mayor Featherman — We will go to page 14 — the General Funds. Director Curtis — What you have here is a summary of each department. Later on in the pages, it gets into the detail of what makes up that department's budget. What you can notice on this is that the revenues on the page before and the expenditures from this page match one another. Mayor Featherman — What is the general government increase from $398,000 to over one million consist of? Director Curtis — It Is a little over a million. That is directly tied to our capital requests this year. Our improvements is a major chunk of that. Operating expenses have stayed relatively the same if not, they have gone down, but we have put off numerous capital improvement projects year after year and now we are proposing to finally fund those. Mayor Featherman — Where will we get that money from? Director Curtis — Our unassigned fund balance (reserve surplus funds) as proposed. Mayor Featherman — But that has increased considerably over the prior years? Director Curtis — The capital improvement requests are higher than years past. Mayor Featherman — Are there any questions? Town Commission Budget Workshop Meeting August 07, 2012 Page 15 of 20 Commissioner Sheridan — Under the Utility Fund, the water department's reserve for contingency, why that difference? Director Curtis — Current year, the revenues are not coming in as they were. We have been able to capture more water since we put in the new system on AIA and the new meters. The same amount of water is not being used as in years passed so the revenues are not coming in at the same rate. We have had a reduction in revenues if you look at the water utility revenue, you will see that revenue has gone down by roughly the same amount as the reserve for contingency. It is still meeting its obligations, but it is not bringing in that excess anymore. Commissioner Stern — We can sit here and try to pick apart the budget page by page, but I do think that our staff has done a great job by putting this together... Mayor Featherman — I certainly do. Commissioner Stern — I think it is time to talk some theory. Let us talk about what this Commission would like to do, so that we have a balanced budget. I think it is time to maybe find out what it would take to not take money out of our unassigned fund because at three million dollars, I am not comfortable going much lower. I am personally not comfortable. I have not had any conversation with my fellow commissioners, so I do not know how they feel. Even if we didn't do some of the projects, we would still have a deficit — is that correct? Director Curtis — Yes sir, sticking with the tax rate that we have in the current year at 3.4070. Commissioner Stern — Let us jump up to the one you proposed — the millage rate of 3.78. If we use that as the basis for what you were recommending, we would still have a deficit if we didn't do all of our renovations and so forth this year? Director Curtis — No, what that rate does is fully cover our operating expenses. It does not cover the capital items. Mayor Featherman — In other words, where would we get our money for the capital expenditure items like renovations and all? Director Curtis — Again, those are being proposed to come out of our unassigned fund balance. Commissioner Sheridan — Is the question how we would replenish it? Mayor Featherman — I don't know. It is confusing to me a little bit. If you tax people more, then they are going to be paying for these things. The taxes and the millage is going up. Where else are the taxes going up? Commissioner Stern — What I am saying is that I would like to see us close our budget with increased taxes because that is the only way we can do it. The commission prior to me and others, closed the budget for four or five years using unassigned or surplus money to the tune of seven or eight hundred thousand dollars, whatever the numbers were. I would like us not to do that this year. I know that there is no way that we can not raise taxes, somewhat. We need to make sure, if possible, to not use any of our funds from the surplus funds from the unassigned. Mayor Featherman — That means you have to cut spending if you are going to raise the millage. Commissioner Stern — Thank you sir, that is my next question. I would like to ask of Cale and of our Town Manager. Are there areas, not picking 10% from different departments, that we could pick up $200,000 to $400,000 out of this budget? Director Curtis — We have identified a few potential budget reductions. Commissioner Stern — Those are meaningless. Manager Weiser — Let me try to answer your question and put it into perspective. It costs us $100,000 to run the Post Office. If you would want to close the Post Office, that is a savings of $100,000. It costs $600,000 to run the Library. There is $700,000 but those are services that the community wants. So, when you are talking about cutting those kind of levels, you are tallying about cutting into services. So at those dollar amounts, we need to look at starting to cut- personnel. Commissioner Stern — If that is what it takes, that is what I am thinking. Manager Weiser — It is like cutting personnel and cutting the hours that we are open because there is no way to come up with those figures without actually stopping services. Mayor Featherman — I really feel reticent on cutting back services. Commissioner Stern — I don't want to cut back on services, sir. I think the Town Commission Budget Workshop Meeting Aumust 07, 2012 PaLye 16 of 20 Post Office and the Library are important. Mayor Featherman — However, we can cut back on capital expenditures for a year. Commissioner Stern — Yes we could. Mayor Featherman — That would put us in a position that if business turns around, we can go ahead with capital expenditures in the future. Commissioner Stern — I am not disagreeing with you. Commissioner Sheridan — That will not balance our budget. Commissioner Stern — That still does not close our gap. We still need $300,000 more, so that we do not have to have a deficit this year, and take money out of our reserves. Mayor Featherman — Why don't we look at this between now and our next meeting? Commissioner Stern — I think now is the time to look at it. Mayor Featherman — We really have to go through the whole budget and see what we got to cut. I think what we should do is review the budget, come back and say this is what I think we can cut out and bring out $300,000. You can't do it off the cuff because you really have to reflect on it. Vice Mayor Brown — Where is this $300,000 shortage? I mean if we pick the proposed rate, then we do not have a shortage, is that correct? Director Curtis — If you use the proposed rate, yes we will close our operating but if the Commission chooses to fund the capital projects then we need to come up with a little over a million to fund those projects. The projects are being proposed out of our reserve surplus fund. Vice Mayor Brown — That still does not cover the $300,000 shortage. As long as we stay with the 3.95, we are in good shape. Commissioner Stern — You would break even, sir. That is correct. Director Curtis — Are you talking about eliminating capital improvement projects? Commissioner Stem— Yes. Director Curtis — Let us go to 3.7876. If you eliminate all of the capital improvement projects, at 3.7876, there is no deficit; it is fully funded. Mayor Featherman — Without drawing from our reserves? Commissioner Stern — That does not make sense to me. If you have $1,037,880, and you are talking $750,000 for renovation and $85,000 for auxiliary materials, there is still a deficit between $850,000 and $1 million? Director Curtis — Beyond the renovations and the ancillary cost, we have the request for a police vehicle, and other capital improvements. Commissioner Stern — But some of those are necessary to do, like the police vehicle would possibly be a necessity. Some of them might be. We can reduce some of those to find $300,000. Director Curtis — Yes, you could make changes to the capital improvements in order to break even at either one of those rates. Commissioner Stern — As much as I do not want to raise taxes, I think we still need to have a slight increase in tax, but I do not want to see our unassigned funds go lower than three million. Mayor Featherman — You are suggesting that the millage be increased again? What number do you have in mind? Vice Mayor Brown — 3.95 and that replenishes our reserves. Commissioner Stern — I could be convinced of that, but I was hoping we could drop down one level to 3.7876. Mayor Featherman — Well then you have to cut something in your expenses. Commissioner Stern — That is exactly what I am hoping we will be able to do. Mayor Featherman — We are being taxed enough in very difficult times right now. Most other towns and cities are running a deficit, a serious deficit. We have been very fortunate that we have been holding the line on a lot of costs. Commissioner Stern — I am reading so many articles of what other towns are doing and towns that have been going bankrupt around the country. It is very scary. In yesterday's paper, Lake Worth said that if they continue, they will not have a surplus budget in year 2014; it will be gone. I do not want that to happen here. Mayor Featherman — That is true. We have to watch if we have a hurricane or some emergency. We have to protect our citizens here, and our residents that are living here. Commissioner Stern — So let us look at it another `way. What if we did go with the 3.95 and we break even, let's see if we can still look for ways to save so that we can build up the unassigned surplus dollars. It is time to start building again. Moor Featherman — I would like to put that to the residents to vote on that. If they think that necessary to do, otherwise, I think that we need to cut our capital expenditures completely for one year or two to recoup and not get into debt more; especially at these difficult times. Commissioner Stern — At the Town Commission Budget Workshop Meeting August 07, 2012 Page 17 of 20 rate 3.95, we would indeed not have to cut anything other than capital expenditures. Mayor Featherman — That is true. Commissioner Stern — But if we drop down to 3.78, then I am looking for us to find some ways to find $300,000 to take out of this budget, so that we do not have a deficit and not raise the taxes quite as high. Mayor Featherman — Well we have to go through the line items then. That is the only way I can see it without penalizing our residents with such an increase all the way through. I would like to take a break and come back at our next meeting, and look at all of the figures, talk to some of the people out there, get an indication of what they think as well, so we can come back instead of shooting off the cuff. We have definite definitive direction. Commissioner Stern — I just want people in this town to understand sir that we are not going to raise taxes just for the renovation of this building, and that is the word that is out there. We are only going to raise taxes to renovate this building and that is not the case. We would have a major deficit if we did not raise our taxes, and it has nothing to do with capital improvements. Mayor Featherman — I tend to agree with you on that. Commissioner Sheridan — I feel the same way. I feel that most important we balance this year's budget without drawing anything out of our reserve. Whatever it takes to do that, that is where I am. Commissioner Trinlev — I would agree, and we are all in this together in that, we would all pay a little bit more, but 3.95 sounds good to me. Vice Mayor Brown — I think we need to take a look at it and reconvene. Take what we are talking about now as it is a different focus then what we were talking about before, and see where we end up. Commissioner Stern — I want to thank you all for supporting some of my thoughts because to try to go through this budget line item by line item to look for $20 we would be here for two months. Mayor Featherman — You are right, but I think the people really need to know what is going on. They deserve to have something known to them. We have to be fair and balanced in our responsibility to them. With people saying that taxes are going to be raised and capital projects, there is such an undercurrent right now that it is very difficult for people to comprehend what is going on. I think if we state it straight out they will understand what is going on, but we have got to cut our spending then. Commissioner Stern — If we are physically responsible, then I think the townspeople will understand that they might have to pay a few more dollars. Commissioner Trinley — So you folks out there, pass the word that we are not talking about capital projects, we are talking about a good balance of the budget. Manager Weiser — May I make a suggestion? Since you only have another workshop scheduled and that is where you have to make your final decisions between now and then, if you would, as you go through the budget, give myself or Cale any suggestions you may have for budget cuts. We can put together a list for the workshop of what has been suggested beyond what we are suggesting, so you can take a look at those at your next workshop because at that meeting, you have to make your final decision. If there is anything between now and then we can put it into a list of what you might think could be put in for budget cuts. 5. COMMISSION BUDGET MEETING: August 21, 2012 — Budget Workshop — 1:30 PM September 7, 2012 — First Budget Public Hearing — 5:01 PM September 20, 2012 — Final Budget Public Hearing — Set Millage Rate — 5:01 PM 6. PUBLIC COMMENTS AND REQUESTS RELATED TO ITEMS DISCUSSED AT MEETING: Elizabeth Susskind — 2629 S. Ocean Blvd. Town Commission Budget Workshop Meeting Aueust 07, 2012 PaEe 18 of 20 Could I address a few questions to our Finance Director? I have some questions about the budget that were a little bit unclear. Mayor Featherman — Sure. Mrs. Susskind — You had mentioned a capital improvement for the water. Is that coming out of the water fund because water is taxed separately, right? Director Curtis — Yes, that is correct. Capital improvements to the water fund, which is funded by user fees. Mrs. Susskind — So that would mean technically an increase in the water cost, correct? Director Curtis — No ma'am, you would not have an increase. Right now the fund is building its renewals and replacements for projects such as these. Mrs. Susskind — So you are building in a reserve fund already for the capital improvements coming up. Director Curtis — Yes. Mrs. Susskind — What about loans? We have a number of loans like the water plant and the library. What is the interest rate that we are paying on these loans? Director Curtis — The interest rates range anywhere from 4% to just under 3%. Mrs. Susskind — Is there any room to negotiate these loans to bring down the interest rates and thereby save us a couple hundred thousand in fees? Director Curtis — We have looked at that and many of these loans there is language for pre- payment penalties and breakage fees. Last time we looked at it, it was not conducive or cost effective to re -finance the loan based on those fees. Mrs. Susskind — Well I guess that wasn't a very good negotiation, I guess. On your millage number, does that 3.78 represent about a 20% increase in the millage rate, am I right? Commissioner Stern — No. Director Curtis — It is around 15%. Mrs. Susskind — So that means with our taxes, if we are paying $1,000, then we will be paying $1,115. We are looking at 15% more on $1,000. Director Curtis — All depending if the values stay the same. Mrs. Susskind — So it is a substantial increase to taxes. 15%, 20% is substantial. On this millage rate 3.78, you said here that they would cover the whole operating expense, right now without any cutting, and would cover us without having to go into the reserve fund? Director Curtis — No, we would have to go into the reserve fund and take $1,037,880. Mrs. Susskind — You are talking about capital projects. Take those out then the 3.78 would cover the budget. Director Curtis — Yes ma'am. Mrs. Susskind — And without having to go into the reserve fund? Director Curtis — Yes. Mrs. Susskind — Then we don't need 3.95. What is the 3.95 that you were talking about? I don't understand. Director Curtis — That is a policy decision that the Commission was discussing in regard to rebuilding the fund balance that we have drawn down on. Mrs. Susskind — Are we comfortable at three million? Is that the balance right now? So the whole point, it is if we are comfortable with the three million balance we have right now? Director Curtis — That is the decision of the Commission, yes. Mrs. Susskind — In other words, what I understood from your talks, that three million is the bottom rank and you do not want to go below that. In that case, if three million is the crucial level, then we don't need the 3.95 we can deal with the 3.78 and maybe a little lower if we shave a few hundred thousand in the budget, is that correct? Mayor Featherman — That is a good point. Mrs. Susskind — You have a lot of work ahead of you. Mayor Featherman — They are doing a great job, I'll say that. Horst Susskind — 4216 Tranquility Drive Bel Lido We are in very trying times as the Mayor said already. I have lived here since 1979. I agree with you that we are in very bad times. In my opinion, any raise of taxes will make it more difficult and is out of the question. Any beautification should be pushed back until the times are better. That is my statement, at the moment. Greg Bobby — Ocean Place Estates I am the HOA President there. Ocean Place Estates is a very security conscious community, we are a gated community on the ocean. We are a bunch of financial professionals, and we are a very Town Commission Budget Workshop Meeting Ausiust 07, 2012 Pate 19 of 20 large tax contributor. The points that we would like to make as a community is that we understand the sensitivity on taxes, and not wanting them to go up. The one thing that we are concerned about is keeping the valuation of the town high, the properties going up. One of the things in the presentation that was very interesting is that this is the first time that properties have gone up and stabilized a little bit, and that is great but why do we think that happened? That's not luck because in other areas of the country they are still going down. One of the main reasons it is happening is because of the safety and security of this town and that comes from the police force and the way we are all pulling together. Something that we need to make sure is that we are not only spending to many tax dollars or not raising taxes to much, but improving the whole value of the town because then your tax dollars will go up without changing the millage rate. How do you do that? Keep Highland Beach the number one safest community in Florida like it is right now. It is sure luck that we are number one right now. When you look at the police station and the infrastructure that we have versus some of the other towns, it is really sort of pathetic. I agree that you do not want to spend a lot of money, you do not want to go into a large deficit. This is what I do for a living. I understand that, but you do want to spend a little bit of money to make sure that you continue to improve the valuations, and that way the tax revenue will go up and people will come here. Our community talks about it all the time, unemployment is going up, people are earning less, more things are getting stolen. We here it from all of our neighbors in Delray, who are friends in Delray that say my community is getting robbed three times the amount as last year. Do what you can and work on the budget as you are, but don't be afraid to spend a little bit of money to improve the police force because you are going to be at a very slippery slope if Highland Beach goes from number one to number 15 in communities. Your property values are going to drop a lot more and then you are really going to have a millage rate problem. Mayor Featherman — Thank you very much. Are there any other statements anyone would like to make? I want to thank all of you for being here today. Commissioner Trinley — I would like to thank Cale Curtis for a very comprehensive presentation. Thank you, Cale. Commissioner Stern — I would like to second that. Commissioner Sheridan — Indeed. 7. ADJOURNMENT: There being no further business to come before the Commission, Mayor Featherman adjourned the Budget Workshop Meeting at 6:14 PM upon a MOTION by Commissioner Sheridan and seconded by Commissioner Stern. APPROVED: 4, " I I,- , " � Bernard Featherman, Mayor Ron Brown, Vice Mayor Town Commission Budget Workshop Meeting August 07, 2012 Page 20 of 20 Trinley, Dennis J. Sheriff, Commissioner P. ATTEST: everly M. rown, MMC J4",/ - G �%/ C�---' ate