Loading...
2014.01.17_FAB_Minutes_Regular TOWN OF HIGHLAND BEACH MINUTES OF THE FINANCIAL ADVISORY BOARD REGULAR MEETING Friday, January 17, 2014 9:00 AM Members Present: Chair Gerald Gitner, Board Member David Buchsbaum, Board Member Bruce Giacoma, and Board Member William Gross. Members Absent: Board Member Ronald Brooks (excused). Also Attending: Finance Director Cale Curtis, Deputy To Clerk Valerie Oakes, To Manager Kathleen Weiser, Commissioner Louis Stern, and members of the public were invited, but none present. CALL TO ORDER: Chair Gitner called the Regular Meeting to order at 9:00 a.m. in the Commission Chambers. Roll call was taken by the Deputy Town Clerk Oakes followed by the Pledge of Allegiance. Chair Gitner noted for the record that proper notice of the meeting was given to all board members. 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 REQUESTS: No public comments and requests. PRESENTATIONS: General Update By: Town Manager Kathleen Weiser Kathleen Weiser, Town Manager — The Financial Advisory Board meets on an as needed basis as do most advisory boards. It is not unusual that a meeting is cancelled due to a lack of agenda items. The Board has assisted in invaluable ways such as the Board's input on the Strategic Plan; recommendations to the Town Commission regarding the Boca properties; improving the Town's investment policy and savings; and changes to the tax structure. In the future, I see the fire truck being an issue. We have had recommendations from our very top fire personnel that we need to replace that truck. It has been out of service numerous times and Delray has informed us that we may have to start paying for replacing parts on the equipment. What Delray does with their fire Financial Advisory Board Regular Meeting Friday, January 17, 2014 Page 2 of 5 service, will dictate what we are going to do with that truck. The other issue is the sale of the Boca Property and what to do with that money. The Board advised the Commission to change their policy on what those funds could be used for. I see this coming back to the Board once those funds are on hand as to whether use it on capital or pay down debt. Regarding the budget, I don't see the Commission changing their policy of having the budget go to you first. That is between myself and the Commission which is delineated in the Charter. They may send you certain items for your review. Chair Gitner — Regarding the fire truck, it is a fascinating issue whether we should own or lease. We have to wait and get some definition as to what is going to happen with Delray Beach. As far as the budget is concerned, we are here to help. Member Buchsbaum — My suggestion would be that when you inform the Commission that we might have some ideas about how to make budget considerations more transparent to them, it is not to comment or give policy, but to make sure that the financial information is in the form that the Commission can use. Town Manager Weiser — On a day -to-day basis, we are a small entity and what you have done as an advisory board is big. Member Giacoma — It would be very helpful to us if we were a sounding board before and not after the event. APPROVAL OF MINUTES: August 9, 2013 — Regular Meeting Chair Gitner called for a motion to approve the August 9, 2013 Regular Meeting minutes. MOTION: Member Giacoma moved to approve the minutes of August 9, 2013 Regular Meeting as presented. Member Buchsbaum seconded the motion, which passed unanimously. OLD BUSINESS: A) Update on the Sale of the Surplus Land Finance Director Cale Curtis reported that the Town entered into a contract for the sale of the surplus property. The buyer, Mr. Durrett, gave a $50,000 deposit which bought him a 90 day window to do due diligence on the property. On August 6 the Town Commission approved Amendment One to that contract which allowed for a 90 day extension to the original contract. The buyer asked for the extension, due to Boca Raton's board meeting schedule, and did not have enough time to have his plans reviewed and back to us in time for the closing. In exchange for that extension, he put down an additional $20,000 deposit. The following month, the Town Attorney reported that there were some underlying land use issues on the eight acre parcel in Boca. While Financial Advisory Board Regular Meeting Friday. January 17.2014 Page 3 of 5 the zoning for the property is residential, Boca's Comprehensive Plan's underlying land use was Government Institutional. The Town Attorney reported that the Town would have to submit a Comprehensive Plan Amendment to Boca in order to get the Government Institutional changed to residential. On October 1 the Town Commission approved Amendment Two to the contract until May 14 Chair Gitner — In the event this does not get approved, is this all refundable? Finance Director Curtis - $20,000 is non - refundable, $50,000 is refundable. It is all held in an escrow account. The $20,000 is being shown as a receivable. The Town had to hire a Traffic Engineer and an Environmental Engineer to assist our attorney in submitting the Comprehensive Plan amendment application. The Town did their part in this; the buyer submitted his site plans and Boca has reviewed it and offered their comments. The buyer had to make some changes and should be ready shortly. We are hopeful and believe the Comprehensive Plan amendment will be approved. We should see a closing sometime in March or April. Member Gross — Can either party back out at this point? Finance Director Curtis — Yes. If we back out the full deposit becomes refundable. Member Buchsbaum — Is the property still being marketed? Finance Director Curtis — It is not being fully marketed. The sign is still up stating that it is for sale, but we do not have it listed anywhere. Member Buchsbaum — Why is it not being marketed? Town Manager Weiser — We are in contract with intent to sell the properties to Mr. Durrett. We have had other calls, but when they hear what he is purchasing those two properties for, they are not interested in paying that amount. Chair Gitner — The Town has never hired an agent so there is no commission. Is that correct? Town Manager Weiser — Yes, it is. The change of land use would have to be for any buyer. There is every indication that it is going through. They are putting a great deal of money into this property. Member Gross — What is the cost of doing this land use analysis to rezone? Town Manager Weiser — Our portion was $6,000. We asked to be the applicant because if you are a government applicant going through another government, it goes much faster. Member Buchsbaum — I feel we should be providing as much of a robust process as possible to bring in potential buyers. I think we should spend a little bit of money on the internet to allow for potential parties to be aware that it is available. During the interim, I presume that the property may have appreciated in value over time. Is there a copy of the appraisal? Town Manager Weiser — We will provide you with that copy. It was around the amount that they are paying for it. There are environmental considerations on both properties. The Commission's choice was it was valuable to have someone who was willing to take both pieces of property as a package deal. Finance Director Curtis — The last page in your packet is an article provided by the Mayor. It is in regards to the Town of Lake Alfred. They approved a resolution that allows their finances to be moved from the Small Business Administration. They are Financial Advisory Board Regular Meeting • Friday, January 17, 2014 Page 4 of 5 going to put some money in the Florida League of Cities Florida Municipal Investment Trust. I will be doing some background research on it and will report back to the Chair. Chair Gitner — The Town does have a good cushion of cash. Other than the approximate 1.5M dollars set aside for contingency, we discussed going out to different institutions to ladder the money that is not in the contingency in a 30/90/180 day rolling set of CD's (say, $500,000 per) to see whether there is a significant difference in the rate that we would get. Put that capital to work rather than have it sit all in one basket; being sure that any depository is backed by FDIC. Finance Director Curtis — I don't believe that is the case with CD's. That is the case with Money Market accounts. Overall we are averaging 20 -22 basis points. Our best is 36 and our worst is 15. Member Giacoma — As long as it is insured. It is an extraordinary rate of return of 2.1 to 4.6 %. I would like to know how they derive those kinds of numbers because they seem extraordinarily high, considering the rate of returns. Finance Director Curtis — I will report back. NEW BUSINESS: Member Buchsbaum — At some point, I would like to have a discussion exploring pensions and pension liabilities. Finance Director Curtis — The Town participates in the Florida Retirement System and we are on a pay as you go basis. Each July 1 the State Legislature passes the following year's contribution rates and we submit, monthly, our contributions on eligible salaries based on those rates for classes of employees. We do not have a long term liability on pension payouts. Member Buchsbaum — Is that contractually obligated by the contracts we sign with the Police, or is that something the Town has opted into? Finance Director Curtis — The Town has opted into it. I would have to investigate the contract with the Police. Chair Gitner — Cale, could you provide the different scenarios for all the various pension obligations for contract and non- contract people at our next meeting. PUBLIC COMMENTS: Ed Kornfeld, Regency Highland — I have a financial background and I reviewed the new budget; it is an excellent one. Regarding the appraisal on the property, was that based on government use or residential? Finance Director Curtis — It was based on residential. Mr. Kornfeld — The budget indicated that those proceeds can be used at the discretion of the Commission. I feel it is kind of loose. Chair Gitner — We were the ones that made that recommendation to the Commission. You have good views and perhaps you may want to communicate those with the Commission. Mr. Kornfeld — Regarding the fire truck in the budget, it seems there was an agreement with Delray for them to supply a truck and an ambulance for $130,000 a year to be tacked onto their agreement for ten years. Is that still an open issue? Finance Director Curtis — In preparing the budget, the plan of the Commission was to negotiate an amendment to our contract with Delray for them to provide us with a fire truck and an ambulance over the next ten years. Following Financial Advisory Board Regular Meeting Friday, January 17, 2014 Page 5 of 5 the adoption of our budget, Delray's Commission directed their Fire Dept. to investigate the possibility of joining Palm Beach County Sheriff's Department. At that point, our negotiations with Delray to amend our contract were put on hold pending the results of their study. It was the plan going into this budget year, but it was not agreed to. The budget is not a legally binding document to commit to services; it is more of a forecasting tool. Mr. Kornfeld – CD's are strong, but my concern is that because of the cap of $250,000 that is insured by the FDIC, we are very careful not to go over this. Finance Director Curtis – All of our funds are deposited in FDIC institutions. Mr. Kornfeld – Do you review the budget before it is passed? Chair Gitner – The Town Manager, Director Curtis and the Town Commission review the budget; the FAB is an advisory board only. ADJOURNMENT: Chair Gitner announced that the next Financial Advisory Board meeting will be held on Friday, April 11, 2014 at 9:30 am. There being no further business, Chair Gitner called for a motion to adjoum the meeting at 9:54 AM. MOTION: Member Giacoma moved to adjourn the meeting at 9:54 AM. Member Buchsbaum seconded the motion, which passed unanimously. APPROVED: Gerald Gitner, Chair Absent Ronald Brooks, Board Member David Buchsbaum, Board Member TOWN SEAL Bruce Giacc hoard Membee !I04 William Gross, Board Member Valerie Oakes, CM Deputy Town Clerk Date: I ( —ly-