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2014.04.11_FAB_Minutes_Regular TOWN OF HIGHLAND BEACH MINUTES OF THE FINANCIAL ADVISORY BOARD REGULAR MEETING Friday, April 11, 2014 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, Deputy Town Clerk Valerie Oakes, Town Manager Kathleen Weiser, Mayor Bernard Featherman, Vice Mayor Ron Brown, Commissioner Carl Feldman and Commissioner Louis Stem. CALL TO ORDER: Chair Gitner called the Regular Meeting to order at 9:30 a.m. in the Building Department Conference Room. Roll call was taken by the Deputy Town Clerk Oakes. 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: No public comments and requests. PRESENTATIONS: • Financial Highlights for the Fiscal Year Ended September 30, 2013 By: Cale Curtis, Finance Director Director Curtis presented the financial highlights for the fiscal year that ended September 30, 2013 (see attached exhibit `A'). He advised a clean opinion was received from the auditor. Discussion ensued amongst the Board and the Finance Director. Chair Gitner requested a schedule outlining the Town's debt that includes the interest rates, prepaid penalties, and the average cost of borrowing over the next year, which is to be provided at the next regular meeting. Financial Advisory Board Regular Meeting • Friday, April 11, 2014 Pace 2 of 3 APPROVAL OF MINUTES: • January 17, 2014 — Regular Meeting Chair Gitner called for a motion to approve the January 17, 2014 Regular Meeting minutes. MOTION: Member Giacoma moved to approve the minutes of January 17, 2014 Regular Meeting as presented. Member Gross seconded the motion, which passed unanimously. OLD BUSINESS: A) Update on the Sale of the Surplus Property Finance Director Cale Curtis reported that the comprehensive plan amendment and site plans are moving forward. The City of Boca Raton has a long process of approval. The plans have gone before the Environmental Advisory Board. The site plan has been amended to 76 townhouses on the eight acre parcel. It is anticipated to be advertised at the May 22 Boca Planning & Zoning Board meeting. Per the agreement, May 12 is the closing date. The purchasers have requested to be placed on the Commission's agenda for an extension. Member Gross — Is the sale contingent upon approval from Boca Raton? Director Curtis — It is not necessarily contingent upon the sale. However, for the purchaser to accomplish their plan of having a residential property, the underlying land use needs to be amended. Boca Raton's Comprehensive Plan has an underlying land use of governmental /institutional. The Zoning Map was amended but the Comprehensive Plan was not. Chair Gitner — Do we have insurance on possible environmental issues, and does it apply post sale, if so for how long? Director Curtis — I will confirm. Town Mgr. Weiser — They had to provide environmental studies in order to move forward with the sale. Member Buchsbaum — In terms of getting it rezoned for residential use, does that require that we keep this buyer in any way or is that two unrelated things? Town Mgr. Weiser — It is not a rezoning; it is a land use change. The underlying land use is government land use. The City of Boca reviews the land use amendment along with the site plan to expedite the process. Member Giacoma — Is there a deadline? Town Mgr. Weiser — There was a deadline that needed to be extended due to unforeseen circumstances on behalf of Boca. Member Giacoma — My concern is will the buyer wait this amount of time. Town Mar. Weiser — Their every intent is to close. They have been extremely cooperative with us as we are Financial Advisory Board Regular Meeting Friday, April 11, 2014 Page 3 of 3 cooperating with them. Chair Gitner — Since there is a contract, we should review the language on environmental indemnities. Member Buchsbaum — The appraisal report is a third party estimate of what the properties are worth. Reading through it, they just regurgitated that the buyer came in at a price, and that each property is worth exactly that price. Instead, they should have provided us with a report based on comparables of what the properties are worth. NEW BUSINESS: A) Discussion on Retirement Director Curtis read aloud the memorandum provided to the Board (see attached exhibit `B'). Chair Gitner stated that the Financial Advisory Board is available to assist with the budget, if needed. ADJOURNMENT: Chair Gitner announced that the next Financial Advisory Board meeting will be held on Friday, June 27, 2014 at 9:30 am. There being no further business, Chair Gitner called for a motion to adjoum the meeting at 10:09 AM. MOTION: Member Buchsbaum moved to adjourn the meeting at 10:09 AM. Member Giacoma seconded the motion, which passed u ly. APPROVED: Gerald Gitner, Chair Ronald Brooks, Board Member TOWN SEAL D • . B baum, Board Member Truce Giaco . Board Member Valerie Oakes, CMC CC ) \tk Ck Deputy Town Clerk William Gross, Board Member Date: 1 05.-1‘4- TOWN OF HIGHLAND BEACH, FLORIDA Financial Highlights For the Year Ended September 30, 2013 O� N1GHLdq F �L ORIO The information presented here has been derived from the Town's Basic Financial Statements and information provided by the Town. It is not intended to be a financial report under generally accepted accounting principles. Town of Highland Beach Governmental Revenues Increase Percent Description 2009 2010 2011 2012 2013 (Decrease) Change Ad Valorem Taxes $ 7,938,812 $ 7,999,103 $ 7,338,543 $ 7,285,358 $ 8,246,672 $ 961,314 13.2% Other Local Taxes 290,488 289,248 296,928 261,339 273,625 12,286 4.7% Franchise /Public Service Taxes 824,926 775,264 723,808 688,278 716,468 28,190 4.1% Total Taxes _ 9,054,226 9,063,615 8,359,279 8,234,975 9,236,765 1,001,790 12.2% Charges for Services 479,888 484,117 477,960 476,145 506,403 I 30,258 6.4% Other 404,572 373,704 353,625 350,590 567,101 216,511 61.8% Licenses & Permits 249,429 283,207 321,767 399,127 445,978 46,851 11.7% Intergovernmental 273,533 110,513 127,684 126,616 117,524 (9,092) -7.2% Fines and Forfeitures 19,603 18,923 18,395 19,832 57,870 38,038 191.8% Total Revenues $ 10,481,251 $ 10,334,079 $ 9,658,710 $ 9,607,285 $ 10,931,641 $ 1,324,356 13.8% Town of Highland Beach Governmental Revenues $12,000,000 $10,000,000 — - = ■ i ®Fines and Forfeitures $8,000,000 - ■Intergovernmental $6,000,000 OLicenses & Permits 1po ' „, iI $4,000,000 O Other ■ Charges for Services $2,000,000 - ® Total Taxes SO — 2009 2010 2011 2012 Ol_ 2013 Town of Highland Beach Governmental Expenditures Increase Percent Description 2009 2010 2011 2012 2013 (Decrease) Change Public Safety $ 4,787,035 $ 4,923,985 $ 5,088,694 $ 5,092,071 $ 5,289,583 $ 197,512 3.9% General Government 1,879,572 1,786,346 1,771,183 1,735,593 1,652,393 (83,200) -4.8% Debt Service 730,063 721,494 712,879 704,486 695,983 (8,503) -1.2% Sanitation 416,728 401,783 364,942 421,181 450,651 29,470 7.0% Capital Outlay 311,202 140,755 124,153 91,629 292,522 200,893 219.2% Culture /Recreation 414,559 426,016 513,386 484,848 492,452 7,604 1.6% Total Expenditures $ 8,539,159 $ 8,400,379 $ 8,575,237 $ 8,529,808 $ 8,873,584 $ 343,776 4.0% Town of Highland Beach Governmental Expenditures $10,000,000 $9,000,000 $8,000,000 .. II Culture/Recreation $7,000,000 $6,000,000 • Capital Outlay $5,000,000 0 Sanitation $4,000,000 ❑Debt Service $3,000,000 $2,000,000 — • General Government $1,000,000 • Public Safety $- 2009 2010 2011 2012 2013 Town of Highland Beach General Fund Fund Balance Fund Balance Increase Percent 2009 2010 2011 2012 2013 (Decrease) Change Unassi ed Fund Balance $ 5,622,211 $ 6,077,935 $ 3,293,303 $ 3,694,921 $ 3,493,852 $ (201,069) -5.4% Assigned - Mandatory Reserves - - 1,786,251 1,693,317 1,746,100 52,783 3.1 Assigned - Disaster Recovery 200,000 250,000 300,000 350,000 400,000 50,000 14.3 Assi ned - Su bsequent Year 215,218 35,165 711,249 40,074 931,355 891,281 2224.1 Restricted - - - 4,311 4,311 - 0.0% Nonspendable 5,877 9,733 8,020 104,653 82,039 (22,614) -21.6% Total Fund Balance $ 6,043,306 $ 6,372,833 $ 6,098,823 $ 5,887,276 $ 6,657,657 $ 770,381 13.1% Fund Balance As A Percent of Total Expenditures Plus Transfers Out Unassigned Fund Balance 58.7% 60.8% 33.2% 37.6% 34.4% Assigned - Mandatory Reserves 0.0% 0.0% 18.0% 17.2% 17.2% Assigned - Disaster Recovery 2.1% 2.5% 3.0% 3.6% 3.9% Assigned - Subsequent Year Expenditures 2.2% 0.4% 7.2% 0.4% 9.2% _Restricted 0.0% 0.0% 0.0% 0.0% 0.0% Nonspendable 0.1% 0.1% 0.1% 1.1% 0.8% Total Fund Balance 63.1% 63.7% 6L4% 60.0% 65.5% Town of Highland Beach General Fund Fund Balance $7,000,000 $6,000,000 • Nonspendable $5,000,000 ■ Restricted $4,000,000 Assigned - Subsequent Year $3,000,000 Assigned - Disaster Recovery * Assigned - Mandatory Reserves $2,000,000 1 III Unassigned Fund Balance $1,000,000 $0 2009 2010 2011 2012 2013 Town of Highland Beach Water & Sewer Operations Increase 2009 2010 2011 2012 2013 (peereax) Operating Revenues 1 3,094,500 S 3,167,654 S 3,290,979 S 3,133,205 S 3,134,806 1 1,601 • Operating Expenses Persona1 Services 972,198 968,724 1,040,526 871,461 935,094 63,633 Sewage Disposal Costs 763,297 703 ,276 653,613 671 ,323 671,221 (102) Contractual Services 20,863 23,367 23,208 23,158 25,706 2,548 Maintenance and Repair 67,093 22,046 46,254 99,830 252,083 152,253 Meters and Supplies 237,299 217,485 209,152 240,196 175,159 (65,037) Utilities 388,630 289,197 286,430 291,979 263,783 (28,196) Depreciation 1,056,700 1,047,365 1,020,940 1,065,276 1,047,451 (17,825) Amortization 19,655 18,567 17,448 17,819 16,592 (1,227) Administrative Charges 204,998 337,786 380,820 395,560 429,900 34,340 Prpfessional Services 9,140 6,050 1,100 9,684 18,945 9,261 Other 214,386 201,855 200,097 174,468 173,964 (504) Total Operating Expenses 3,954,259 3,835,718 3,879588 3,860,754 4,009,898 149,144 Operating Income (Loss) (859,759) (668,064) (588,609) (727,549) (875,092) (147,543) Nonoperating Revenues (Expenses) Miami Revenue 16,342 9,641 8,453 5,025 6,082 1,057 Net Increase (Decrease) In Far Value of Investments (3,781) 4,537 1,638 2,736 1,199 (1,537) Connection Fees 900 4,940 2,214 3,979 3,000 (979) Interest Expense (420,614) (379,477) (415,749) (448,746) (423,472) 25,274 Other - - - - 400 400 Gam (Loss) On Disposal of Capital Assets (31,7(16) - (356) - - _ Tool N000peratmg Revenues (Expenses) (438,859) (360 ,359) (403,800) (437,006) (412,791) 24,215 Income (Loss) Before Transfers (1,298,618) (1,028,423) (992,409) (1,164555) (1$87,883) (123,328) Transfers In 1,056,737 1,605,416 1 ,360,956 1,288,400 1,286,000 (2,400) Change in Net Position (241,881) 576,993 368,547 123,845 (1,883) (125,728) Net Position - Beginning of Year 6,004,347 5,762,466 6 ,339,459 6,708,006 6,831,851 123,845 Net Position - End of Year $ 5,762,466 $ 6 ,339,459 S 6,708,006 $ 6,831,851 $ 6,829,968 $ (1,883) ) TOWN OF HIGHLAND BEACH To: Financial Advisory Board FROM: Cale Curtis, Finance Director DATE: April 11, 2014 RE: Town of Highland Beach Retirement Discussion Effective October 1, 2005, the Town irrevocably joined the Florida Retirement System (FRS). The FRS includes the FRS Pension Plan, a cost sharing, multiple- employer, public retirement system controlled by the State Legislature and administered by the State of Florida Department of Administration, Division of Retirement. The FRS also includes the FRS Investment Plan, a defined contribution retirement plan qualified under Section 401(a) of the Internal Revenue Code The Town is required to make monthly contributions based upon statement contribution rates that, expressed as percentages of annual covered payroll, are adequate to accumulate sufficient assets to pay benefits when due based upon plan assumptions. Employer and employee contribution rates are established annually by statute and go into effect on July 1 as a level percentage of payroll. The contribution rates by job class for the Town's employees are: regular employees 9.95 %, police employees 22.06 %, management employees 21.31 %, and elected officials 36.03 %. These rates include a 3% employee contribution, 1.20% for the Retiree Health Insurance Subsidy Program (HIS), and a 0.03% administrative fee. For example regular class employee rate of 9.95% is made up of the following: employee 3 %; HIS 1.20 %; Admin Fee .03 %; employer 5.72 %. Participation in the FRS is mandatory for all employees (union and non - union) with a hire date on or after October 1, 2005. The Town's contributions to the FRS for the fiscal years ending September 30, 2011 through 2013 are summarized as follows: 2011 2012 2013 Employer $ 313,495 $ 199,734 $ 254,015 Employee 19,028 75,360 79,731 Total $ 332,523 $ 275,094 $ 333,746 On July 1, 2011, Town of Highland Beach employees began contributing 3% of their covered salary to the Plan. Thus, the 2012 fiscal year was the first whole year that included employee contributions. The 3% employee share along with the actuarial adjusted contribution rates resulted in a reduced employer obligation for 2012. For 2013, the employee share remained at 3% while the actuarial adjusted employer contributions increased to 2011 levels (less the 3% employee share).