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2014.07.09_TC_Minutes_Special TOWN OF HIGHLAND BEACH MINUTES OF TOWN COMMISSION MEETNG SPECIAL MEETING Wednesday, July 9, 2014 9:30 AM Mayor Bernard Featherman called the Special Meeting to order in the Library's Goldstein Community Room at 9:30 AM. CALL TO ORDER: Roll Call: Members present: Mayor Bernard Featherman; Vice Mayor Ron Brown; Commissioner Dennis J. Sheridan; Commissioner Louis P. Stern; and Commissioner Carl Feldman. Also present: Town Attorney Brian Shutt; Town Manager Kathleen D. Weiser; Town Clerk Beverly M. Brown; Finance Director Cale Curtis; Public Works Director Edward J. Soper; Police Chief Craig Hartmann; Library Director Mari Suarez; Assistant to the Manager Zoie Burgess; and members of the public. Pledge of Allegiance: The Pledge of Allegiance was given, followed by a minute of silence. 1. ADDITIONS. DELETIONS OR ACCEPTANCE OF AGENDA Mayor Featherman asked for any additions or deletions. Hearing none, the agenda was accepted as submitted. 2. PUBLIC COMMENTS AND REOUESTS No public comments or requests were received. 3. NEW BUSINESS A) Setting the Tentative Maximum Millage Rate — Fiscal Year 2014 -2015. Town Manager Weiser — The tentative maximum millage rate should be considered the upper limit on this year's tax rate. It can always be lowered but it can't be raised without significant requirements. We are remaining at our current rate of 3.95 which is our recommendation to you. Proposed Operating Budget 2014 -2015 Presentation by Finance Director Cale Curtis: The following is a synopsis of the plan. A complete copy is available in the Finance Dept. in Town Hall. Town Commission Special Minutes July 9, 2014 Page 2 of 7 The Town's Taxable Value In 2015 our taxable value is up 6.27% or $1.93 billion. It is the third increase in a row. Understanding Your Tax Bill: The tax bill is not only for Highland Beach but has other taxing jurisdictions on there. The largest tax jurisdiction is the public schools. Highland Beach is about 24% of the tax bill. Unassigned Fund Balance The big change in 2012 was when we established the budget stabilization reserve. Basically, what we did was take funds from the Unassigned Fund Balance and put it into an Assigned Fund Balance. The funds are still there and are set aside for budget stabilization and disaster recovery. The estimated 2014 Year End General Fund fund balance will be around 3.1 million. If the proposed budget were adopted today, we would have to take about $400,000 from that to balance it to cover our Capital Improvements; leaving the ending fund balance with about 2.76 million. This does not include the anticipated proceeds of the sale of the Boca Raton properties. Town Tax Rate Our high point was in 2013. The total tax rate was 4.8673 and that was with an operating tax rate of 3.95. The tax rate was kept the same in 2014 and we are proposing to do the same in this upcoming budget year. Our total tax rate is going down due to the voter approved debt service that we have. As we make principle and interest payments on that, the annual payments go down. As property values increase, the tax rate that is needed to service that debt goes down. From 2014 to the proposed, we have had about a 3.3% decrease in the total tax rate. General Fund Proposed Budget Highlights On the revenue side, the taxable value increase is 6.27 %. There is no proposed tax rate increase and will stay with the 3.95. There is 409k being taken from the Unassigned Fund Balance to balance the budget. Our Capital Improvement Budget is about $425k. All the Unassigned Fund balance funds are going to fund one time capital expenditures; not your recurring annual operating expenditures. On the expenditure side, there is an increase in personnel services of 5.1 %. The operating expenses are up 4.3% which includes scanning/electronic archiving; fire services agreement; fire vehicle maintenance, fire station repairs; general repairs /maintenance to Town facilities; solid waste collection and library media. Capital Outlay The total capital outlay for the General Fund is $426,000. This is used to fund projects for the Public Works Dept.; other general government; Police Dept.; Fire Dept.; and the Library. Water System Proposed Budget: The total estimated revenue is $4,019,720 which consists of charges for services (water usage); miscellaneous; transfer from GF (debt) and appropriation from Reserve. The expenditures in the water system are now Town Commission Special Minutes July 9, 2014 Page 3 of 7 exceeding their revenues each year. The total estimated expenses are $4,019,720 for personnel, operating expenses, capital outlay, debt service and reserve for contingency. Sewer System Proposed Budget: Total estimated revenue is $1,140,303 which consists of charges for service, miscellaneous and reserves. The estimated expenditures of $1,140,303 are operating expenses; capital outlay and reserve for contingency. 5 Year Capital Improvement Plan: The 2014 -2015 section listed would become your capital budget if adopted today. The remaining four years would become the capital plan. The first year will be the only year that you will allocate and appropriate funds for. We moved the purchase of the Calcite Flow System and the side street water mains into year two. The idea is that we will hopefully engage with an Engineer and Professional Consultant to help us put together better cost estimates, a feasibility analysis, in a roll out plan on how we can attack these major projects. Millage Rate Scenarios: Our estimated taxable assessed value for 2014 is $1,938,425,792. We are proposing to stay at the tax rate of 3.95 and the debt service tax rate at 0.6913. If we stay at the proposed tax rate, it is a 3.4% decrease in the total tax rate from the current year's adopted rate. Setting the Tentative Maximum Millage Rate: This is the purpose of today's meeting. The tax rate set today should be a rate that the Commission feels gives them the most revenue flexibility throughout the budget process. We can always lower that tax rate, but cannot be raised without notifying each taxpayer individually via certified mail. Staff is recommending, at a minimum, a tax rate of 3.95 be adopted which will cover the operating expenditures and offsets a small portion of the one -time capital improvements. Vice Mayor Brown — We are taking $400,000 plus out of the Reserves. The average millage rate throughout the County is 4.8. Did Staff consider a millage rate of 4.0 to raise another $100,000 to help fund the very aggressive Capital Improvement Plan that we are looking at for the next five years. Fin. Dir. Curtis — I did look at 4.0 and it is possible to do that. The tax rate we have now is covering our reoccurring operating expenditures. The reserves we are using is to cover a one -time capital improvement. Vice Mayor Brown — I would like to see us seriously go to 4.0. Fin. Dir. Curtis — That would be a policy decision of the Commission. It could always be lowered at our meetings in September. Mayor Featherman — There is a possibility that Delray would purchase a fire truck. We have a contract with them which will expire in a few years, but we may put this Town Commission Special Minutes July 9, 2014 Page 4 of 7 contract out for a competitive bid. If they own this truck and we would have to purchase our own truck, have we gotten any information on leasing a fire truck on a basis of five or ten years? Fin. Dir. Curtis — The idea behind our vehicle maintenance fee is we would have to amend the agreement we currently have with Delray. Part of that amendment would be to extend the term of that agreement. Delray would not want to purchase a vehicle they would have to pay for over a period of ten years and have us opt out of it in three years. In our negotiations, we would come up with a vehicle maintenance fee that would cover the fire truck and the fire rescue vehicle over the term of that extended agreement. We do have leasing and financing terms with the manufacturer. Mayor Featherman — Can we renegotiate any of our payables now to a lower rate? Fin. Dir. Curtis — We have some pretty aggressive pre - payment penalties on any of the bank loans we have. We also have some very good rates with the State Revolving Loan System. The rates are under 3% which is an excellent rate. We could look at refinancing those loans since there are no prepayment penalties involved. Mayor Featherman — Have you considered moving any of the monies to other banks where we can get a lower rate? Fin. Dir. Curtis — Banks are willing to work with you when you are giving them your deposits to put in their account. This is something they consider and would adjust their rates accordingly. Comm. Feldman — If we raise the millage rate then it would increase the tax on each individual homeowner. The major improvement we would have is the water mains. I am in favor of bonding this project. I am not in favor of raising the millage rate to 4.0. I feel we have plenty in the reserves at this time and we will have money coming in from the sale of the Boca Property. Comm. Sheridan — I would like to stay with the 3.95% rate that the Town has suggested. Comm. Stern — I have read the budget several times and am comfortable staying with the 3.95% rate. We will be getting money in from the land sale, so our reserves will not be depleted. There is nothing wrong if we decide to go to 4.0 because we can always lower it. Vice Mayor Brown — We are not setting the millage rate today; only talking about the maximum millage rate. It can be lowered but not raised. We have a meeting where we will set the rate. We have not received the money from the sale of the property as of yet, and still have not decided what we are going to do with the money. I don't feel we should base our reserves on the 3.5 million that we have not yet received. Mayor Featherman — I feel we should keep the rate at 3.95 and not raise the taxes on our residents. Town Commission Special Minutes July 9, 2014 Pa eg 5 of 7 MOTION: Commissioner Stern moved to adopt a "Tentative Maximum Millage Rate" of 3.95 %. Commissioner Feldman seconded the motion. ROLL CALL: Commissioner Stem - Yes Commissioner Feldman - Yes Commissioner Sheridan - Yes Vice Mayor Brown - Yes Mayor Featherman - Yes Motion passed with a 5 to 0 vote. B) Setting a Time and Date for Budget Workshops. Town Manager Weiser — We have tentatively set the dates for Thursday, August 7 at 4:30 pm and Tuesday, August 26 following the Commission meeting, if necessary. Vice Mayor Brown questioned the time on August 7 Fin. Dir. Curtis — This will give the residents who cannot come to an earlier meeting the opportunity to attend. Since most working people do not get home until after 5 pm, the Commissioners agreed that 6:30 pm would be a better time to have the meeting. MOTION: Commissioner Feldman moved to set the time at 6:30 pm for the August 7 Budget Workshop Meeting. Commissioner Stern seconded the motion. ROLL CALL: Commissioner Feldman - Yes Commissioner Stern - Yes Commissioner Sheridan - Yes Vice Mayor Brown - No Mayor Featherman - Yes Motion passed with a 4 to 1 vote. MOTION: Commissioner Stern moved to have, if necessary, the second Budget Workshop following the Commission Meeting on Tuesday, August 26 Commissioner Sheridan seconded the motion. - ROLL CALL: Commissioner Stern - Yes Commissioner Sheridan - Yes Commissioner Feldman - Yes Vice Mayor Brown - Yes Mayor Feartherman - Yes Town Commission Special Minutes July 9, 2014 Page 6 of 7__ Motion passed with a 5 to 0 vote. C) Setting a Time and Date for two (2) Public Hearings to Adopt a Millage Rate and Budget. Town Manager Weiser — The proposed dates for the Public Hearings for the Town Commission are September 9 and September 23` both at 5:01 pm as required by law. MOTION: Commissioner Feldman moved to adopt the dates of September 9, 2014 and September 23, 2014 at 5:01 PM for the Budget Public Hearings as. required by law. Commissioner Sheridan seconded the motion. ROLL CALL: Commissioner Feldman - Yes Commissioner Sheridan - Yes Commissioner Stem - Yes Vice Mayor Brown - Yes Mayor Featherman - Yes Motion passed with a 5 to 0 vote. 4. PUBLIC COMMENTS AND REQUESTS RELATED TO ITEMS DISCUSSED AT MEETING Peter Rodis, 3224 S. Ocean Blvd — It is important that the people in this Town attend the Commission Meetings so they can understand what is going on in their town. I thank you for having the meeting at 6:30 so those who work can attend. There has been so much talk about the sale of the property and what will be done with the funds. It is important to the residents of this town to know what use the funds will be put to; whether it is to reduce taxes or reduce the amount of money that we borrow. These are issues that should be brought up at these meetings and residents should attend and ask questions. Bill Weitz, 1135 Boca Cove Lane — I think keeping the millage rate at 3.95% is a smart decision; especially since the property value has increased by 6.7% which means you have more spendable dollars. It seems to me that we are moving full speed ahead with regard to spending or increase spending. I would thank you to consider the individual taxpayers who are experiencing increases in insurance, water, etc. at the budget hearings. Town Commission Special Minutes July 9, 2014 Page 7 of 7 5. ADJOURNMENT There being no further business to come before the Commission, Mayor Featherman adjourned the Special Meeting at 10:22 am upon a MOTION by Commissioner Sheridan seconded by Commissioner Stern APPROVED: Bernard Featherman, Mayor Ron own, Vice Mayor Dennis J. SheAQn, Commissioner s St rn, mmissio Carl Feldm issione ATTEST: Beverly M. W�C , Town Clerk 4 . �� "F ""r / Y Date