2015.08.04_TC_Minutes_Workshop TOWN OF HIGHLAND BEACH
MINUTES OF TOWN COMMISSION MEETING
BUDGET WORKSHOP MEETING
Tuesday, August 4, 2015 Immediately following the he regular meeting
Mayor Bernard Featherman called the Budget Workshop Meeting to order in the Town Commission
Chambers immediately following the regular meeting.
CALL TO ORDER:
Roll Call: Members present: Mayor Bernard Featherman; Vice Mayor William Weitz, Ph.D;
Commissioner Carl Feldman; Commissioner Louis P. Stern; and Commissioner Rhoda Zelniker. Also
present: Town Attorney Brian Shutt; Town Manager Beverly Brown; Town Clerk Valerie Oakes; Finance
Director Cale Curtis; Public Works Director Edward J. Soper; Police Chief Craig Hartmann; Building
Official Mike Desorcy; Code Enforcement Officer Carol Holland; Interim Library Director Suzi Hayes
and members of the public.
Pledge of Allegiance: The Pledge of Allegiance was given, followed by a minute of silence.
Civility Pledge: The Civility Pledge was recited by the Town Clerk.
1. ADDITIONS, DELETIONS OR ACCEPTANCE OF AGENDA:
Mayor Featherman called for any additions or deletions to the agenda.
Receiving no additions or deletions, the agenda was accepted as presented.
2. PUBLIC COMMENTS AND REOUESTS:
None
3. PRESENTATION OF 2015 -2016 BUDGET:
Proposed Operating Budget 201 5 -2016 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.
The Town's Taxable Value: Today our estimated value is a little over two billion which is a 7.19%
increase over the prior year.
Town Commission Budget Workshop Meeting Minutes
Tuesday, August 4, 2015 Page 2 of 7
Understanding Your Tax Bill: The tax bill is not only for Highland Beach but has other taxing
jurisdictions on there. The largest jurisdiction is the public schools. Highland Beach receives 24% of
the tax bill.
Unassigned Fund Balance: This is the Town Commission's reserve fund. If the budget is to finish
as projected for 2015, the Unassigned Fund Balance will decrease by about $200,000 to just over 3.31
million. As it sits today proposed, the General Fund Budget, the Unassigned Fund Balance will
increase again by about $600,000 to a little over 4 million. The Unassigned Balance in the water
system is about 4.7 million which includes the 3.5 million land sale proceeds. The sewer system has
1.7 million.
Town Tax Rate: The Town Commission has kept the 3.95 tax rate for the last two years and has
tentatively set that rate at the July 14 meeting. As the town continues to make principle and interest
payment on its debt, and the assessed value on the town goes up, the debt service tax rate goes down.
The overall tax rate has decreased since 2013. This year the proposed overall tax rate for the Town of
Highland Beach is 4.5 954, and that has an operating tax rate of 3.95, a decrease of about I%.
General Fund Proposed Budget Highlights: On the revenue side, we are projecting $11,551,450 in
revenues which is an increase of $48,000. The largest portion of that increase is in the ad valorem tax
line item which is due to the favorable increase in our assessed values. On the expenditure side,
revenues have to equal expenses. There is $11,551,450 on the expense side. The operating fund has a
surplus of $692,000. The General Fund Expenditures are as follows: Personnel Expenses - $3.65
million; Operating Expenses - $5.5 million; Capital Expenses - $415k; all other — Debt down $435k;
Transfers $1.28 million and the Reserve $692k.
Water System Proposed Budget The total estimated revenue $9,106,220 includes proceeds from
the SRF (State Revolving Fund) which will be used to fund our water main project at a cost of $5
million. Total estimated expenses are $9,106,220.
Sewer System Proposed Budget Total estimated revenue is $1,192,000. We get a flat rate per unit,
and the revenues do not change unless we change the rate that we charge. The total estimated
expenses are $1,192,000 which equal the revenues.
5 Year Capital Improvement Plan: The first year 2015 -2016 is the proposed capital budget that
includes license plate recognition cameras, fire house renovations, repaving of Town Hall parking lot,
Library Terrace enclosure, SCADA system upgrade and our major water improvement plan projects.
The first year, if adopted, becomes the capital budget. Each year thereafter that serves as the plan for
future Commission's consideration.
Millage Rate Scenarios: We have an estimated taxable value of $2,076,387,102. The total tax rate is
4.5954, and when applied to the estimated taxable value it will generate $9,541,829 in taxes. We are
looking at $550,000 in increased revenues year over year. The proposed budget tax rate is one percent
(1 %) less than it was the prior year.
Town Commission Budget Workshop Meeting Minutes
Tuesday, August 4, 2015 Page 3 of 7
4. COMMISSION REVIEW, QUESTIONS & DISCUSSIONS:
Commissioner Feldman questioned the monies for the license recognition cameras and the Library
Enclosure project. Why are they in this year's budget if they were already paid for in last year's
budget, and can they be taken out? Fin. Dir. Curtis — You can do that by reducing the operating tax
rate by an amount equal to those two items. Comm. Feldman — What happened to the money we
received from the sale of the property? Fin. Dir. Curtis — That is currently being held in the water
fund. Comm. Feldman — Why can't that money be used to help finance the water main project instead
of borrowing money? Fin. Dir. Curtis — The Commission sent this to the Financial Advisory Board to
discuss. They indicated that, given our five -year capital improvement plan and our ability to borrow
very cheap funds from the State that are specifically for water projects, the $3.5 million could be better
served on other capital improvements. Options were given to the Commission and this is what they
chose to do. Comm. Feldman — I don't agree with the $75,000 for the streetscape project. I know we
need new sidewalks. Other than that, we have a beautiful town and I don't see changing it. This
would be a waste of money.
Vice Mayor Weitz — I understand if you budget for something one year and it doesn't get used, you
don't lose the money. It rolls into a fund. If you budget that same item that never got expended
during that year, and you put it in the budget for the next year, you have the same amount of money. If
you don't use it, it rolls in. What you have is the taxpayers putting money in a savings account that
they get no benefit for. My recommendation is to remove the following items from this year's
budget: the police license recognition cameras that the State hasn't yet approved; the Library
enclosures; and the streetscape project. I also am concerned about the one -half percent we are getting
on our money. Have we investigated other brokerage firms? Fin. Dir. Curtis — This certainly isn't a
topic that has not been discussed by the Financial Advisory Board. Government investing is quite a
bit different than private sector investing and what we can get involved in. Vice Mayor Weitz — I like
our employees and think they do great work. However, that does not mean that we have to continue to
use an unstainable pay structure to maintain the work force. Your proposal for employees is two
percent (2 %) COLA (Cost of Living increase) on October 1S and two percent (2 %) on April 1S 1
have no problem with the COLA, but it should be whatever the COLA is established in January by the
federal government and not made up by Highland Beach. I do not support a mid -year increase. The
country is dealing with one or two percent increases. We are a small town. We have to be realistic. I
support a COLA increase, longevity and a performance bonus for an employee who goes above and
beyond their position. I am not in favor of the academic educational stipend for degrees that people
need for their jobs. We should help employees pay for their tuition who want to get an advance
education in areas that is related to their job description. Once we reduce the budget a legitimate
amount, I am for reducing the millage rate.
Commissioner Stern — The prior Commissions were taking money from our Unassigned Balance Fund
to balance the budget. We had over four million dollars, and we were taking $400,000 to $700,000 a
year from that fund to pay our debts so we could live at the 3.95. Actually, it was 3.45 at that time.
Now it is 3.95. I gave each of you what everybody in the entire county pays for taxes. We are right in
the middle. There are many towns where their millage rate is 8 %, 9% and even 10 %, and those towns
are around us. The people I have talked to are not looking to have taxes cut. They are very satisfied
with what we do here in this town, how we maintain the town and the amount of taxes they are paying.
I don't disagree that we should not reduce the 3.95 %, and I think it should go all the way back to the
rollback rate which is a lot more than you suggested. I agree with you on the things you suggested be
eliminated. When you get into salaries, I have a problem because many of our employees are maxed
Town Commission Budget Workshop Meeting Minutes
Tuesday, August 4, 2015 Page 4 of 7
out. They cannot earn any more money other than the two percent, and possibly the other two percent
you give them, which really works out to 3.025 %. If we do this new two and two, according to the
numbers I have been able to put together, we will save $7,235 which is a very small number. I think
the employees deserve the amount of money they are earning. The five percent merit raises never
worked because each of the department heads never wanted to be the one to say you are not worth five
percent. Every single employee got an automatic increase. That is after we no longer had the three
percent and the five percent. I don't disagree that the five percent merit raise didn't work. Our
previous Town Manager Dale Sugarman, two managers ago, got into trouble because he said to the
Commission and the people in the Town that not everybody is worth five percent. Therefore, I have
indeed graded people two, three or four percent; the way I see it. Nobody liked him after that. The
fact that we are going to take away the five percent makes some sense. The alternate of two and two
and putting back the longevity helps. Over a period of time, if we take out some of the line items that
are mischievous, we will find ourselves in excellent shape. I do not want our rainy day money to go
under four million dollars as it did in the past. If we work together we will find where we can take
some money out, but I don't want to do it totally at an employee effort. We have great employees who
are cooperative and very helpful. I feel that collectively we can get down to the rollback rate, maintain
the amount of fund balance we need, and keep our employees happy.
Commissioner Zelniker — Cale, do you feel we have enough money to support us in a severe
hurricane? Fin. Dir. Curtis — We have 3.3 million and catastrophic insurance. Comm. Zelniker — I do
feel we have good employees working for our Town with a sense of loyalty. How many people
receive the educational incentive? Fin. Dir. Curtis — Seven or eight people. The total expense to the
Town is $52,000. The program went into effect approximately seven years ago. When an employee
with a degree was hired, they knew they would be receiving the educational incentive. Comm
Zelniker — I don't believe incentive is the correct word to use. It is part of the salary. Last year the
Commission agreed to grandfather those employees with a degree, but eliminate it from any future
employees. My opinion is that I don't feel it is fair to eliminate this and should continue the
educational incentive to those grandfathered in. I agree there are other areas we have to look at. I am
in agreement that we do not need the streetscape, but I feel very strongly that our walk path needs to
be done, and would like to see it done in our 2015 -2016 budget. Town Manager Brown — I have a
report from PWD Ed Soper with photographs. We can patch the bad spots that have been
photographed for your benefit, but if you want to completely repave the walking path, there needs to
be a referendum. Comm. Zelniker — I strongly feel we should do it now, find out how much it would
cost and go to referendum.
Mayor Bernard Featherman — The budget is healthy and our revenues are higher than expected. I
believe we should look at receiving grants for our infrastructure and environment projects. Our Town
needs to look at either cutting services or increasing property taxes next year. I agree with my fellow
Commissioners with what has been said here today and should look at these issues very closely.
Vice Mayor Weitz — I know we are going to have a water rate study. Are we going to be looking at
setting aside some money in the budget so that we make prudent decisions, and not somebody in ten to
fifteen years from now with a twenty million dollar burden? Fin. Dir. Curtis — That will be a decision
of the Town Commission once the results of the study come in.
Commissioner Feldman — I would like each employee to receive a complete financial package of their
benefits and salary.
Town Commission Budget Workshop Meeting Minutes
Tuesday, August 4, 2015 Page 5 of 7
Commissioner Stern — Is today the day that we should be making some forward decisions so that you
can put together a slightly different budget for our next meeting? Fin. Dir. Curtis — You can give me
collective direction and I will come back with a similar presentation that shows the effect of those
changes. Comm. Stern — We should discuss what it is that we would like to change and what we need
to do to get to the rollback rate. Fin. Dir. Curtis — Comm. Stern is talking about the rollback rate of
3.7053 %. To implement that rate, our taxes go down from 9.5 million and we would have to come up
with $500,000 in the budget to balance it. We currently have a budget surplus of $692,000. You can
reduce that tax rate down to the rollback rate and recover it in your reserve for contingency line item
without effecting any other budget. I need clarification on the license recognition cameras and the
Library enclosure project. Do you want to do those projects and you don't want to pay for it with new
funds, or you don't want to do those projects all together? We can do it both ways. We can reduce the
millage rate even lower which will bring in taxes that are equal to those amounts so that way there are
no new taxes paying for it, or you keep it in there in the same and then new taxes pay for it.
Vice Mayor Weitz — My clarification is that there are certain items in the budget for this year that
should be out such as the Library enclosure, license plate recognition cameras and the streetscape. We
take the money out of the budget and put it in a savings. If we have to take it out of the savings to pay
for a project that it was intended for, we can so do it.
Mayor Featherman — Regarding the funding for the water project, I understand that the bonding will
run somewhere around 1 3 /4% interest. I think the interest rates will be going up very shortly. With
the payout of over 10 to 15 years, it may be to our benefit to put that bond in and hold the other money
for things we may need so we won't have to go up in our pricing. Fin. Dir. Curtis — It would be a great
idea if we could do it. Unfortunately we could not lock in those rates until our project is submitted and
ready to go with contractor's bids and a contract that is fully executed.
Comm. Feldman — The 3.5 million was supposed to be used to reduce water debt. Why can't we use
that for the pipe lines? Comm. Stern — The Financial Advisory Board does not agree with you on that
and we have been over this a number of times. I have to agree that license plate recognition cameras
have to come out and the Library enclosure is no longer an option but not the streetscape. Our Town
should be upgraded a bit. We are going to Orlando and there are some companies that do streetscapes.
We should look at them and see what appeals to us. It will have to go to a referendum. We have to
repair our sidewalks, so why not do it properly. Comm. Feldman — I think it is a good idea but don't
feel we need the $69,000 for an engineering study. Comm. Stern — We should be able to find that out
in Orlando. If not, we could call the Florida League of Cities for a recommendation.
Fin. Dir. Curtis — To recap, I have the Library enclosure, police license plate recognition cameras and
the $69,000 for the engineering study on the streetscape project coming out of the budget. I would
like clarification on what it is you would like to do on streetscape project. Comm. Feldman — I would
like to wait until I see PWD Soper's report. Town Manager Brown — We could start doing repairs. If
we did the major ones this year we would spend between $100,000 and $200,000 because some of
them are really drastic. If we kept a $60,000 recurring expense every year, then we could upgrade it
every year and do a different section. When we come back, I was going to ask for money taken out of
reserves so we could repair what is really needed at this time. Comm. Zelniker — Why keep spending
money. It has to be redone. Vice Mayor Weitz — We live in a seaside town and no matter what you do
it will be a recurring problem. We do have to maintain the walk so that it is reasonable and safe.
Town Commission Budget Workshop Meeting Minutes
Tuesday, August 4, 2015 Page 6 of 7
Vice Mayor Weitz — Chief Hartmann, could you provide this Commission with the number of miles
driven by the Police Department in the last three years. Fin. Dir. Curtis, are we budgeting money for
the proper equipment to go electronic for the Commission? Fin. Dir. Curtis — We currently have a
system in place for electronic filing. Town Manager Brown — We have received the iPads and are
waiting for them to be charged and setup.
Comm. Zelniker — I walk the walkway and sometimes ride my bike on the walkway. It has to be done
right. We are just patching and not giving the community what it needs. I am talking about the next
ten to fifteen years, and the people want it.
5. COMMISSION BUDGET MEETINGS:
• August 25, 2015 — Budget Workshop — Immediately following the monthly Workshop Meeting
• September 10, 2015 — First Budget Public Hearing — 5:01 PM
• September 24, 2015 — Second Budget Public Hearing — Set Millage Rate and Adopt Budget —
5:01 PM
Fin. Dir. Curtis — Did you have a general consensus with regard to the tax rate going from 3.95
down to the rollback rate? Consensus was to go in that direction with lowering the tax rate and
removing the license plate recognition cameras, streetscape and the Library enclosures.
Comm. Stern — Is there a need to add a little bit of money for the Library if we want to do programs
for the Library? Fin. Dir. Curtis — Yes, they do not have a line item for adult programs. The adult
programs were self - supporting. It is my understanding that the Commission is directing Town
Manager Brown to develop some type of policy that would possibly take over that as a line item in
the budget for putting on those programs. Comm. Feldman — I don't agree with that. This is a
commercial venture by the instructors and they should be paid by the residents that want to use
them, and not funded by the Town. Fin. Dir. Curtis — We could do that through this policy. We
would charge that user a fee. They would pay that fee to the Town which would help cover our
cost for providing that instructor. Comm. Feldman — We don't provide that instructor now, and I
would not want to do that. Town Manager Brown — In this policy, it has been suggested by some of
the Commissioners that we put a fee on the use of any of the rooms by any organization; have one
for non - profits and one for profits. Comm. Feldman — Once you put a fee on the room, they will
have to charge more to the residents. Vice Mayor Weitz — The Library is part of our town
resources. It should be made available to the residents of this town in each and every way that is
healthy and productive without charging. Comm. Zekniker — I think we need some guidance from
our Attorney. The issue is that by opening it up anybody can have a business there.
6. PUBLIC COMMENTS AND REQUESTS RELATED TO AGENDA ITEMS DISCUSSED AT
MEETING ONLY:
Carl Gehman, 1103 Highland Beach Drive — I agree with Vice Mayor Weitz with regards to the COLA
increase. It should not be determined by Highland Beach but by the government regulations. When
you talk about raises, the employees of this town deserve the best money they can make because they
are great and work hard but the COLA should be right.
Town Commission Budget Workshop Meeting Minutes
Tuesday, August 4, 2015 Page 7 of 7
7. ADJOURNMENT:
There being no further business to come before the Commission, Mayor Featherman called for a
motion to adjourn the Regular Meeting at 4:50 PM.
MOTION: Commissioner Stern moved to adjourn the regular meeting at 4:50 PM. Motion was
seconded by Commissioner Feldman which passed unanimously.
APPROVED:
Bernard Featherman, Mayor W' i ) Wei Vice Mayor
"PSteA,,/ an, Commissioner
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C 46 a Zelniker, � 'ssioner
ATTEST:
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Valerie Oakes, CMC, Town Clerk Date