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2012.11.01_FAB_Minutes_Regular '•� TOWN OF HIGHLAND BEACH s : ' f 3• :s �o: •en at MINUTES OF THE N 44 , PL O09 FINANCIAL ADVISORY BOARD -= REGULAR MEETING Thursday, November 01, 2012 9.30 AM Members Present: Chair Gerald Gitner, Board Member Ronald Brooks, Board Member David Buchsbaum, Board Member Bruce Giacoma, and Board Member William Gross. Also Attending: Finance Director Cale Curtis, Town Clerk Beverly Brown and members of the public. CALL TO ORDER Chair Gitner called the Regular Meeting to order at 9:30 a.m. in the Commission Chambers followed by a roll call taken by the Town Clerk. ADDITIONS, DELETIONS OR ACCEPTANCE OF AGENDA Chair Gitner called for any additions, deletions to the agenda, hearing none, the agenda was accepted as presented. PUBLIC COMMENTS AND REOUESTS: Chair Gitner called for any public comments and requests. Carl Feldman — 3210 S. Ocean Blvd. I think a lot is changing now. A lot of people are going into rentals and there is a lot of building being done. I think a lot of these developers are going to be looking for property to purchase at this time, so they can start their building. I was reading the Wall Street Journal, Coldwell Banker is really pushing for vacant property in Ft. Lauderdale, Florida. Should we put it back on without the stipulations at least to see what we can get for offers? I think we can easily get $10 million for that property (surplus property located in Boca Raton). Hopefully, people would get active on it to develop it in the future. Advise the Commission. Chair Gitner changed the order of the agenda to approve the minutes prior to the presentation by Chief Hartmann. Financial Advisory Board Thursday, November 01, 2012 Pate 2 of 6 APPROVAL OF MINUTES: • September 20, 2012 — Regular MOTION: Member Brooks moved to approve the minutes of September 20, 2012, Regular Meeting as presented. Member Buchsbaum seconded the motion, which passed unanimously. PRESENTATIONS: • Report on the Police Department By: Police Chief Craig Hartmann Police Chief Craig Hartmann — Today is the Police Department's 40` anniversary. In 2009, the department prepared its mission, vision statement, and goals. The town's organizational chart includes the structure of the police department. There are 18,000 police departments in the United States, and 75% of all departments have 25 members or less. The department's total budget is just over $2 million, which represents 19.5% of the town's total budget. The Fire Department represents just over 28% of town's total budget. The operating budget for the Police Department is under 9% of its total budget; the remaining budget is fixed for personnel. This year's budget includes a new vehicle for a supervisor; we have not purchased a new vehicle in six years. We currently have six marked patrol vehicles, and with the new purchase of a supervisor's vehicle at the end of the month, we will eliminate one vehicle; therefore, we will have five marked patrol vehicles. There are a total of 15 patrol officers. There are three officers to work a 12 -hour shift, and the vehicles are used 24 hours a day. We are in the process of recycling the vehicles, and our goal is to change all cars every three years. Once the warranty maintenance expires on the vehicle(s), costs increase. The proposed re- modeling facility was removed from this current budget year. When I was hired, I was told the department's quarters were deficient and would be upgraded. Prior Chiefs had requested re- modeling the facility, but due to budget constraints, it is presently on hold. Member Brooks — Do the officers take vehicles home? Chief Hartmann — No, this is standard practice in coastal communities. Member Gross — What is the health insurance allowance? Director Curtis — The town carries 100% of employee health coverage and 90% of dependent health coverage. Member Gross — Do we know how ObamaCare is going to affect us? Director Curtis — At this time it is unclear how the insurance market is going to react, their guesstimate is that it is going to increase costs. Financial Advisory Board Thursday, November 01, 2012 Page 3 of 6 Chair Gitner — Who sets the insurance allowance? Director Curtis — The Police Department follows the town's policy. Member Giacoma — Since there are three separate locations, has a space study been conducted concerning efficiency? Chief Hartmann — An architectural study was completed. The study took into account the needs of the agency. The department is in antiquated space. As far as efficiency, the lighting is decades old, and since the ceiling is high, the air conditioning does not offer a big return on your money, which would all be upgraded with the re- modeling. Chair Gitner — When you look at the budget, there are no facilities charges. It does not show square footage and the cost to run the department. Over the course of time, we might want to adopt a budget system that has the office space for all of the departments, so we have a better understanding of where the money is being spent, especially looking forward to long term capital budgeting. According to the Capital Improvement Plan, there is nothing listed for renovating the police department within the next five years. Director Curtis — The Capital Improvement Plan is still a working document. We plan to go back to the Commission in the next few months. Chair Gitner — If you only address the needs of the Police Department, what budget number would you need for the facility to last five or ten years? Chief Hartmann — The challenge we have is where we are situated. To tie the three existing spaces together to make it a cohesive, functional facility, the chambers, public restrooms and walkway are in the middle of the department. Originally, there was a plan to keep the police department as two separate spaces, which was estimated at $200,000 to renovate. From a long -term point of view, we thought it was best to do a complete remodel of the area to connect to Town Hall and upgrade the chambers. Safety and security is paramount, and we lack that in our facility. Our vehicles are exposed on a daily basis, which contain technology, rifles and firearms. Chair Gitner — The Police Department is a 24 -7, 365 days a year operation, and there are 15 officers. If the police department was renovated to last 10 years, let us estimate is would cost $250,000. The amortization to pay for the $250,000 would be $25,000 per year. That is $1667.00 per officer. If the average officer works 240 days, that is $6.94 per day. There are 4,207 taxpayers in Highland Beach to pay the $25,000 a year for the amortization that is $5.94 per taxpayer per year to fund the renovations. That is $59.42 per taxpaying entity. We would get better communication and better coordination. In this particular case, I am not sure if that is the proper test as much as morale, efficiency, retention of personnel, recruitment of personnel, and the long -term impact on property values. I can convince myself that it is the proper thing to do without including the renovation of the commission chambers. Member Buchsbaum — There are 15 positions budgeted within the department with one reserve officer. Chief Hartmann — When I first arrived, we were budgeted for 16 sworn officers. I did a analysis of our demands and were able to reduce to 15 officers. Financial Advisory Board Thursday, November 01, 2012 Page 4 of 6 Member Buchsbaum — The 15 officer makes $89,000; the reserve officer makes $12,000. Is that figure accurate? Chief Hartmann — It is accurate. It is a standard for smaller departments to have reserve officers, but we did not have one. Instead of creating a position, the reserve officer is used to supplement any shortage of officers due to absences. The reserve officers do not receive benefits, overtime pay or merit increases. Member Buchsbaum — Why don't we have more reserves? Chief Hartmann — A certain number is required for the department. We are budgeted for three reserves, and use two. Member Giacoma — What is the call count coming into the Police Department? What is the severity of the crimes? Chief Hartmann — One of my important responsibilities is looking at our department and providing what this community needs and provide the best level service, then affectively provide what we need. Last year, we started a 501(c)3 Police Foundation, which is another area where we can lessen the burden on our operating expenses. OLD BUSINESS• A) General Discussion of Financial Topics Follow -Up: • Investment Options/Policy Director Curtis — At our last meeting, the Board gave me direction to open a savings account offering 50 basis points, so I did that. However, it dropped down to 35 basis points. I cannot get our current bankers to budge on our rates; they are not offering returns on government funds. I reached out to other brokers and dealers that deal with local government investment portfolios to get their opinions. Both came back with a six - month, nine- month, and one -year laddered CD portfolio virtually risk free and all FDIC insured. The rate of return over a year is 37 points. Is 35 points worth a year CD? They offer it one day but drop it the next day. Chair Gitner — There is $1 million in surplus, so I would recommend investing it. Member Giacoma — One year from now, if we are lucky, the basis points will be 150 points higher than they are now. Keeping the money short-term is probably appropriate. If you can get 35 basis points, I would grab it. Member Brooks — Mr. Bernanke has already said it was not going up. If we get 35 basis points, I suggest we take it. Chair Gitner — Do we have a consensus on a recommendation to Director Curtis as to take 35 basis points on a six -month or one -year term on a portion of the reserve? Financial Advisory Board Thursday, November 01, 2012 Paae 5 of 6 Member Buchsbaum — I do not think the environment is going to change for the next year. If this is what we can get for this year, I suggest moving forward and revisiting in one year. Member Giacoma — These are uncertain times. There are chances of a flare -up situation, but would move forward for 35 basis points for one year. By consensus, the Board recommended to open a savings account providing for 35 basis points for one year. • Sale of Suralus Property Director Curtis — This is still a work in process. I spoke to the respondent that provided a proposal. In his proposal, all work provided to the Town such as an assessment would be billed at $250 an hour, and had a contingent fee on the sale. He explained that it is not an attractive property for new development; there is no direct access to it. Virtually, there is no interest. I received a call once a month from someone who is driving by and sees a for sale sign; after the discussion, I hear nothing further. I am reworking the Request for Proposal (RFP). Chair Gitner — Is the objective of the new RFP to have the least amount of restrictions, but still comply with laws and regulations? Director Curtis — I am trying to generate interest. I reached out to a broker and did not receive a response. Member Gross — In this kind of environment, do we need to have an RFP? Why can't we get in touch with a major commercial real estate firm? Director Curtis — That is the procurement law that is mandatory as per the State of Florida and Palm Beach County. Chair Gitner — When does the right of first refusal to the City of Boca Raton expire? Director Curtis — It appears that it expires in 2015. • Monthly Financial Report Director Curtis — No update on the August financial report. • Capital Improvement Plan Director Curtis — The Town Commission approved the Capital Improvement Plan in the budget; however, it is not finalized. We plan on going back to the Commission early next year to add/remove items and review better estimates. • FY 2013 Budsiet Director Curtis — The Town Commission adopted the 2013 budget and millage rate on September 20 The Board has received a current copy of the budget. Financial Advisory Board Thursday, November 01, 2012 Pave 6 of 6 NEW BUSINESS Chair Gitner — Regarding the implications of an event like Hurricane Sandy, I think this is a wake -up call. At the next meeting, I would suggest having a discussion on the size of the reserve, if $500,000 is sufficient for the Disaster Relief Fund, or another number. Member Giacoma — I am deeply concerned with the reserve being adequate. I think a larger number seems appropriate. When I was cycling south, there was a washout that occurred on AIA in between two buildings and created a funnel. There was a photographer taking pictures of the waves and he was dragged through this funnel and ended up on A 1 A. He was slightly injured. Chair Gitner — We all have been put on notice with this situation. At a minimum, we need to determine what would be appropriate. The Board scheduled their next meeting for Thursday, January 17, 2013 at 9:30 a.m. in the Commission Chambers. ADJOURNMENT: There being no further business, Chair Gitner called for a motion to adjourn the meeting at 10:35 AM. MOTION: Member Giacoma moved to adjourn the meeting at 10:35 AM. Member Gross seconded the motion, which passed unam APPROVED: erald Gitner, Chair onald Brooks, Board Member TOWN SEAL David Bu aum, Board Member Bruce G' co and Mem T. William Gross, Board Member Valerie Oakes, CAC Deputy Town Clerk Date: February 01, 2013