2013.08.09_FAB_Minutes_Regular i:: iTali a ::
TOWN OF HIGHLAND BEACH
' . ' 'i MINUTES OF THE
X1 4 * ••F. iii .o� r
FINANCIAL ADVISORY BOARD
REGULAR MEETING
Friday, August 9, 2013 9:00 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, Deputy Town Clerk Valerie Oakes,
Town Manager Kathleen Weiser, Mayor Bernard Featherman, Vice Mayor Ronald
Brown, Commissioner Dennis Sheridan, Commissioner Louis Stem, Commissioner Carl
Feldman and members of the public.
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.
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.
PRESENTATIONS:
• FY 2013 -2014 Proposed Annual Budget
By: Cale Curtis, Finance Director
Cale Curtis, Finance Director presented the 2013 -2014 Proposed Operation Budget (see
attached Exhibit `A'), which is the same presentation provided to the Town Commission
on August 7, 2013.
Board Discussion:
Chair Gitner — On the taxable value, do we see many appeals or is the number "solid"
from the Palm Beach County Clerk and Assessor? Director Curtis — For the most part, it
Financial Advisory Board
Friday, August 09, 2013 Page 2 of 6
is solid. In town hall, we have not received inquiries as the Palm Beach County Property
Appraiser's Office is contacted directly. [Refer to slide no. 2.]
Member Gross — Is taking $920,000 from the unassigned fund contingent upon the sale
of the surplus property? What happens if we do not close on the property? Director
Curtis — That is the Commission's decision. However, it is currently not contingent
upon the sale of the property. If the sale does not proceed, we may have to reprioritize
the 5 -Year Capital Improvement Plan (CIP). [Refer to slide no. 4.]
Chair Gitner — Even though we have these categories, is it not totally within the
Commission's purview to use that money, as it is not restricted? Director Curtis — Yes,
it is not restricted by outside sources or covenants. The Commission sets a policy for a
certain purpose, which can always be changed. All of the money is in the same pool.
[Refer to slide no. 5.]
Member Gross — Can you provide the breakdown of the $130,000 fire vehicle
maintenance fee? Director Curtis — It is the cost of two vehicles. The immediate
replacement of the fire truck and the future replacement of the rescue vehicle truck,
which is also aging. We anticipate the rescue vehicle truck could be replaced anywhere
within the next two to three years. [Refer to slide no. 6.]
Chair Gitner — In the new contractual agreement with the City of Delray Beach, is there
any language included that we do not get an old truck; we receive an average truck all
the time. Director Curtis — We are still in negotiations with our contract but that would
certainly be one of the provisions. In initial conversations with Delray Beach, we would
be getting a new truck. Chair Gitner — The concept of replacement goes away and it is
simply maintaining an adequate vehicle(s). Director Curtis — Yes. [Refer to slide no. 6.]
Member Gross — From a competitive perspective, has the Town looked at what the City
of Boca Raton can do? Director Curtis — Our contract with the City of Delray Beach runs
through 2017. The Fire Chief has been trying to replace the fire truck for the last four or
five years; furthermore, the truck is getting worse and needs to be replaced. [Refer to
slide no. 6.]
Chair Gitner — I noticed that there is the dispatch service, fire service agreement, and fire
vehicle. Is this all a part of a single contract or separate contracts? Director Curtis — As
of right now, we have viewed them separately. When we continue our negotiations for
the vehicle maintenance fee, we are going to look at the possibility of combining the
contracts. [Refer to slide no. 6.]
Member Gross — Currently you have a balanced budget that includes the Town Hall
renovations at $825,000, what happens if that number comes in at a higher price?
Director Curtis — Hopefully, we have a more accurate figure by the time the final budget
is adopted. However, if we stay with this figure and we go into the new fiscal year and
the lowest bid is higher than budgeted, we would go back to the Town Commission and
Financial Advisory Board
Friday, August 09, 2013 Paee 3 of 6
request a budget amendment. The Commission could also choose to review the contract
and eliminate items. [Refer to slide no. 7.]
Chair Gitner — What is the threshold for Commission approval? Director Curtis — The
Commission's threshold is 10% of the general fund budget, which would be $1.17
million; anything over would go to the voters for approval. [Refer to slide no. 7.]
Chair Gitner — Even though the proposed tax rate is -1.3 %, the actual tax bill will likely
go up because of the increased property valuations, correct? Director Curtis — Yes.
[Refer to slide no. 11.]
Member Buchsbaum — What is the total annual contribution for the mandated retirement
that has increased by 55 %? Director Curtis — It is approximately $200,000.00.
Member Buchsbaum — The City of Delray Beach agreement runs through 2017. At that
time, it would be wise to look at other options and to include an "opt out" provision in
the new agreement. Director Curtis — The Town has looked at all possible options
including in- house, Palm Beach County, City of Boca Raton and City of Delray Beach.
We have looked at the salaries for the City of Boca Raton whose firefighters are paid
more than Delray Beach. Palm Beach County sets their contract services based on a
Municipal Special Taxing District Unit (MSTU) rate of 3.26 mills that would be applied
to our taxable value, which would be approximately $6,000,000 for those services.
Currently, the City of Delray Beach is the best choice, but it does not mean that we will
not look into other services available to us. Member Buchsbaum — That makes sense.
Anytime there is a large contract, it is always good to look at other service providers that
are available.
Member Gross — In terms of our Board, I think we are getting involved late in the
budgeting process. If you really want to use the expertise that you have on the Board, I
think the following year it might make more sense to get involved early on. Right now,
the budget looks like it is in stone; to get our input at this point could be too late. I
would feel more comfortable getting involved earlier in the process. Member Giacoma
— I think it makes sense to have an earlier involvement for all of us to participate in the
grass roots. Personally I think you have assembled a good budget that seems consistent
with what has been done in the past. If it isn't broke, don't fix it. Chair Gitner — I echo
the view on getting involved if we want to have a potential impact, but that is up to the
Commission.
Chair Gitner — Is there a reason why a beginning and ending balance sheet is not
included in the budget? Director Curtis — There is no reason why it is not included and
no reason that it could not be included for next year.
Financial Advisory Board
Friday, August 09, 2013 Page 4 of 6
APPROVAL OF MINUTES:
• April 12, 2013 — Regular
Chair Gitner called for a motion to approve the April 12, 2013 minutes.
MOTION: Member Giacoma moved to approve the minutes of April 12, 2013, Regular
Meeting as presented. Member Buchsbaum seconded the motion, which passed
unanimously.
OLD BUSINESS:
A) Update on the Sale of the Surplus Land
Director Cale Curtis reported that the Town entered into a contract for the sale of the
surplus property. The buyer has received authorization for an extension in return for
three (3) 30 day, non - refundable deposits; the first and second 30-day periods will
require a $5,000 non - refundable deposit, and the third 30 -day period will require a
$10,000 non - refundable deposit. The contract extension period ends a little after
November 10`".
Chair Gitner — During this period, does the buyer have an exclusive ofption on the
property? Does this prevent an interested party from submitting a bid? Director Curtis —
No, it does not prevent an interested party from submitting a bid. We do receive
inquiries about the property, as it is listed for sale, but they are informed that we are
currently under contract. If the contract falls through, those parties will be notified.
Chair Gitner — What does the proposed buyer receive for providing these deposits, if
they are not receiving exclusivity? Director Curtis — It is their faith that they are going
to purchase the property. Town Manager Kathleen Weiser — Nobody else has been
interested in both properties. Part of the consideration is that this particular developer is
purchasing both properties. Anyone who has been interested has not submitted a counter
offer from the proposal on the table. Furthermore, we are in contract for the purchase.
Member Buchsbaum — I consider that problematic. I would say it is better for the Town
to not take the deposit and have the liability of dealing with other people in good faith. I
do believe that it does bind us in some way. Manager Weiser — You have a good point,
but we have been sitting on this property for 10 years with no interest. Real estate
agents were not interested. Those who have shown interest do not want to pay what the
proposed buyer has offered.
Chair Gitner — We just want to know what the $5,000 deposit is for? Manager Weiser —
That was a policy decision of the Town Commission for a good -faith agreement that we
are moving forward.
Financial Advisory Board
Friday, August 09, 2013 Page 5 of 6
Member Gross — After due diligence, what happens if they come back and do not want
to move forward? Manager Weiser — It is all in the contract and they have agreed to pay
this amount. There are certain rules from the City of Boca Raton that are limiting
building on the properties. They are going through a process that any developer would
have to follow. The developer has put out a lot of money, and I am confident that it will
go through.
Chair Gitner — Does the Town get access to all of the studies and results? Manager
Weiser — Yes, should they back out of the deal, they have offered to provide the Town
with all of those studies.
Member Brooks — If they refuse to buy, they have no recourse. If we sell it to someone
else, they have no recourse. The deposit is not a deposit; it is a good faith handling of
money with no strings attached. Where we stand now, we could give them their money
back and we have not lost anything.
Member Buchsbaum — Has there been an appraisal on the properties? Manager Weiser —
Yes and it came in at the purchase price of both parcels.
Member Gross — What is the outside closing date? Director Curtis — Their final due
diligence period ends November 10 Manaper Weiser — They have 10 days to close
after November 10
NEW BUSINESS:
Member Buchsbaum — I would like to discuss the use of the proceeds of the sale of the
surplus property. Member Giacoma — I think a recommendation to the Commission
could be made that the Board would like to assist.
The Board scheduled their next meeting for Friday, October 18, 2013 at 9:00 a.m. in the
Commission Chambers.
ADJOURNMENT:
There being no further business, Chair Gitner called for a motion to adjourn the meeting
at 9:46 AM.
MOTION: Member Giacoma moved to adjourn the meeting at 9:46 AM. Member
Buchsbaum seconded the motion, which passed unanimously.
Financial Advisory Board
Friday, August 09, 2013 Page 6 of 6
APPROVED:
Gerald Gitner, Chair
Ronald Brooks, Board Member
TOWN SEAL
W ( J °J —
David Buchsbaum, Board Member
i 1
T ruce Gia Ima, Bo. . Me.. -r
Valerie Oakes, CMC William Gross, Board Member
Deputy Town Clerk
Date: 1— fl — 14--
Proposed Operating Budget
2013-2014
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The Town's Taxable 1
Va ue ( gP)er
$2 400, 000, 000
$2,200,000,000
$2,000,000,000
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$1 W
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$1,600,000,000
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$1,400, 000, 000
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$1 o
, 200,000,000 1.A) ,
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$1 -�
2007 2010 2011 2012 2013 2014
r
Understand Tax
Bill
Total tax bill is split among multiple taxing How Highland Beach Taxes
authorities: Are Divided
'Public School
•County
•Highland Beach
'Special Districts (6) Special
Districts
1 2% County
Total tax bill provides for: 25%
•Police /Fire Protection Highland
'Public Schools Beach
•Improved Roads 24%
•Parks and Recreation
•Sanitation Disposal Public
Schools
39%
Highland Beach's portion is less than a
quarter of the total tax bill.
201 3 Tax Distribution
A
3
Unassigned Fund Balan ce
(Savings/Reserves)
$7,000,000
$6,000,000
$ 5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$ -
ri Qo
rt Ql
a
\ ''` Does not include the potential $3.5
,w; million in land sale proceeds 4
Total Fund Balance
$7,000,000
$6,000,000 ,
Nonspendable
$ 5,000,000
$4,000,000 .
■ Assigned
$3,000,000 . . . .
$ 2,000,000 Unassigned
$ ,000,000 Fund Balance
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t
Does not include the potential $3.5
, million in land sale proceeds 5
2013 -2014 General Fund
Proposed Budget Highlights
Revenues Expenditures
■ Taxable Value increase 4.15% ■ Personnel Services increase 8.5%
• Health Insurance up 10%
• Retirement (mandated) up 55%
• Balanced Budget achieved ■ Operating Expenses increase 8 %:
with: • Legal, Debt, and OGG are down
$95k
No tax rate increase • Improved dispatch services $67k
• $97k increase in permit
• O ▪ O e-ti-ti me e $23k
revenues • Fire services agreement up
• $920k from unassigned fund $74k(contractual)
balance to cover capital • Fire Vehicle Maintenance Fee $130k
items • General repairs /maintenance to Town
facilities up $33k
• Solid Waste Collection up $21k
6
Capital Outlay
■ General Fund ( I • o
■ Public Works: o �
• Restriping of traffic and pedestrian markers: $6k gl•
• Replace privacy mesh (north fence): $6k
■ Other General Gov't:
• Southside of Town Hall (Police Department/Chambers Renovations): $825k
• Information Technology/Network Upgrade (Town- wide): $14k
■ Police Department:
• Replace two (2) police cruisers and equipment: $72k
■ Library:
• Purchase of books, movies, CDs, and other library media: $60k
7
Water y stern Proposed Budget
Revenues Expenditures
► Charges for Service: ► Personnel: (plus 1 WPO):
$2,105,720 $1,094,275
► Miscellaneous: ► Operating Expenses:
$143,500 $1,330,642
■ Transfer from GF (debt):
► Capital Outlay:
$92,000
$1,286,000 ■ Debt Service:
► Reserve: $1,296,522
$ 300,000 ► Reserve for Contingency
■ Total estimated revenue $ 21,781
$3,835,220 ■ Total estimated expenses
$3,835,220
8
Sewer System Proposed Budget
Revenues Expenditures
■ Charges for Service: ■ Operating Expenses:
$1,010,000 $995,400
■ Miscellaneous:
$3,000 ► Reserve for Contingency:
■ Total estimated revenue $17,600
$1,013,000
► Total estimated expenses
s n $1,013,000
A k
9
5 Year Capital Improvement Plan
Annual On -going
Fiscal Year Fund Project Name Initial Cost (est.) Cost (est.)
General Fund Replace Police Cars (2) $ 72,000 na
General Fund Renovate Town HaII /PD $ 825,000 na
2013 -2014 General Fund Network/IT Upgrade $ 14,000 na
Water Well Pump Motor (Spare) $ 40,000 na
Water Replace 4x4 Utility Truck $ 32,000 na
General Fund Replace Police Cars (2) $ 72,000 na
General Fund License Plate Recog Cameras $ 50,000 $ 2,500
General Fund Enclose Library Terraces (2) $ 150,000 $ 1,000
2014 -2015 General Fund Street - scape- design /architect $ 50,000 na
Water Replace Water Main (Bel Lido) $ 500,000 na
Water Purchase Calcite Flow System $ 250,000 na
ill Water Replace Air Conditioner $ 75,000 na
General Fund Replace Police Cars (2) $ 68,000 na
2015 -2016 General Fund Repave Town Hall Parking Lot $ 65,000 na
General Fund Street-scape- construction $ 900,000 na
Water Replace Water Main (all other) $ 500,000 na
2016 -2017 Water /Sewer SCADASystem $ 26,000 na
General Fund Replace Police Cars (2) $ 68,000 na
Water RO Plant Membrane Replace $ 450,000 na
2017 -2018 General Fund Replace Police Cars (2) , $ 68,000 na
\�,� 10
Proposed 2013 -2014 Property Tax Rate
2013 -2014
2012 -2013 Percent
Proposed
Tax Rate Change
Tax Rate
General Tax Rate 3.9500 3.9500
Debt Service Tax Rate 0.9173 0.8554
Total Tax Rate 4.8673 4.8054 -1.3 %
Millage Rate Scenarios
r Taxable Assessed Value of Highland Beach 2013
$1,824,966,379
Prior Proposed
Tax Rate Scenarios and Year's Rate Rate and
Amounts Needed to Balance and Taxes Taxes Rolled Back
Bud et Levied Levied Rate
Rate 3.9500 3.9500 3.8010
Ad Valorem Taxes 6,644,621 6,920,273 6,695,495
From Unassi ned FB - 920,000 1,144,778
Mr
Taxes Levied (Debt) 0.8554 - 1,498,633 1,498,633
First Public Hearing on the Tax
Rate and Budget
-The Town Commission is required to hold two Public Hearings
in order to adopt a millage rate and a budget.
➢ The first hearing is where the Commission will discuss and adopt a
tentative millage rate and budget.
➢ The first public hearing will be held on Thursday, September 5, 2013 at
5:01 pm in the Town Commission Chambers
➢ The second hearing is where the Commission will adopt a the final
millage and budget that was tentatively adopted at the first hearing.
➢ The second hearing will be held on Tuesday, September 17, 2013 at
5:01 pm in the Town Commission Chambers.
13
2 0 11 2-201 POperating
Budget
QU EST I O N S ??
+ h.
14