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2019.08.29_TC_Minutes_Special O�N1GHLgNO •o 0 TOWN OF HIGHLAND BEACH •AtoRio' TOWN COMMISSION SPECIAL MEETING MINUTES Town Hall/ Commission Chambers Date: August 29,2019 3614 South Ocean Boulevard Time: 12:00 PM Highland Beach, Florida 1. CALL TO ORDER Mayor Zelniker called the Special Meeting to order at 12:00 p.m. She asked those present to silence all cell phones. 2. PRESENT UPON ROLL CALL Commissioner Evalyn David Commissioner Barry Donaldson Commissioner Peggy Gossett-Seidman Vice Mayor Greg Babij Mayor Rhoda Zelniker Town Attorney Glen Torcivia Town Manager Marshall Labadie Town Clerk Lanelda Gaskins 3. PLEDGE OF ALLEGIANCE The Commission led the Pledge of Allegiance followed by a moment of silence for the men and women serving in the military. 4. ACCEPTANCE OF THE AGENDA Mayor Zelniker added the following items to the agenda: Item 5A, Hurricane Preparation Update by Chief of Police Craig Hartmann, and Item 5B, Proposed Resolution Declaring a State of Emergency within the Town of Highland Beach. Commissioner Gossett-Seidman added Item 6A, Discussion of the City of Delray Beach Fire-Rescue Contract. It was the consensus of the Town Commission to accept the Agenda as amended. 5. CIVILITY PLEDGE A. HURRICANE PREPARATION UPDATE BY CHIEF OF POLICE CRAIG HARTMANN (THIS ITEM WAS ADDED TO THE AGENDA) Chief of Police Craig Hartmann reported as of the latest weather advisory, Hurricane Dorian was a category four hurricane, which was anticipated to make land fall early Monday morning and the State of Florida was within the cone of uncertainty. He stated Town Commission Special Minutes Page 2 of 17 Date: August 29, 2019 Town Staff had begun hurricane preparations earlier in the week. He noted Governor DeSantis signed an Executive Order declaring a State of Emergency, which allowed Highland Beach administration to put a resolution in place for Commission approval enabling administration to operate at the same level of emergency management. He explained Highland Beach took direction and information regarding emergency management activities, including evacuation requirements, from the State of Florida Division of Emergency Management and then by the Palm Beach County Emergency Management. He indicated when Palm Beach County released information to the public, Highland Beach Staff would release the same. He stated at 4:00 p.m. today a conference call with the County, Law Enforcement, and municipalities would be held and these conference calls would continue throughout the weekend. He explained all information came through the County; he encouraged residents to follow the news. He stated information would be aired on Highland Beach TV Channel 99, the Town's website, and through the CodeRed notification system. He indicated residents could register for CodeRed notifications online or in person at Town Hall. He noted if evacuation was required, residents did not have to leave the State of Florida, but had to leave the Highland Beach barrier island; once reentry was safe and the roads were passable residents would be permitted back into Highland Beach. He noted the bridges would not be closed to residents evacuating; however, at some point boats would no longer be permitted to cross under the bridges. He encouraged residents to make hurricane preparations and have an evacuation plan in place. Vice Mayor Babij asked Chief Hartmann if the Police Force would be operating out of Highland Beach or Delray during the hurricane if it were a category four. Chief Hartmann responded Police and Fire would stay in Highland Beach as long as was safe; if the winds and projections became too dangerous, Police and Fire would cross over the bridge for safety and return as soon as possible. He commented mandatory evacuations were issued for good reason. B. PROPOOSED RESOLUTION/ DECLARING A STATE OF EMERGENY IN HIGHLAND BEACH (THIS ITEM WAS ADDED TO THE AGENDA) Town Manager Labadie explained this declaration allowed Highland Beach to operate under emergency conditions and move forward with evacuation requirements and hurricane preparations. He noted the declaration would also strengthen the Town's ability to acquire federal funds as related to the emergency. He indicated the declaration could be closed post-hurricane, at next Tuesday's meeting. MOTION: Commissioner David moved to adopt the Resolution to declare a State of Emergency in Highland Beach due to Hurricane Dorian. Vice Mayor Babij seconded the motion. UPON ROLL CALL: Commissioner David Yes Vice Mayor Babij Yes Town Commission Special Minutes Page 3 of 17 Date: August 29, 2019 Commissioner Gossett-Seidman Yes Commissioner Donaldson Yes Mayor Zelniker Yes The motion carried 5-0. 6. DISCUSSION AND ACCEPTANCE OF THE PROPOSED GENERAL FUND BUDGET FISCAL YEAR 2019 — 2020. Town Manager Labadie reported following the Budget Meeting last Tuesday, he and Finance Director Matthew Lalla reviewed the Budget and "penciled out" some additional savings, and the Town was now at a $210,655 dollar gap. He reported in July the gap was $675,000 dollars, but now was $210,000 dollars due to budget changes. He explained with the additional changes the Town was in the position to make an upward adjustment of 0.0807 mils (revised millage rate) or to pledge reserves of $210,655, or some combination therein to balance the budget. He noted following this decision, Staff would move forward with all necessary documents for the first Budget Public Hearing Meeting, to be held next Thursday at 5:01 p.m. He reviewed and discussed a PowerPoint presentation highlighting the following: • Original Proposed Increase in Millage Rate for Fiscal Year 2020 —0.3337 Mils • Revised Increase in Total Millage Rate — 0.0807 Mils (a millage rate increase of 2.17%) • A recap of the Budget changes made since July 2, 2019 meeting in an effort to capture savings • Third round of Budget changes (made August 20) capturing a savings of $80,125 dollars Town Manager Labadie noted the Budget supplements had been updated for the Town Commission including department descriptions, budget worksheets, etc. Finance Director Matthew Lalla continued with the PowerPoint presentation and highlighted the following: • Town's Taxable Assessed Value • Town's Tax Rate (millage increase of 0.0807 mils) Finance Director Lalla reported the original proposed increase was the "not to exceed" millage rate approved by the Commission on July 23, 2019. He noted this figure had been forwarded to the Palm Beach County Property Appraiser and included in the Truth in Millage (TRIM) notices. He noted residents received a notice from the Property Appraiser which reported a full millage increase of 0.3337 mils; this increase was now lowered to 0.0807 mils, which was a total increase of about 2.17%. He displayed and discussed a slide which discussed the Millage Impact on Homeowners at various Taxable Assessed Values noting the median home's taxes would increase by approximately $40 if the millage rate were increased by 0.0807. He stated at this point the Commission Town Commission Special Minutes Page 4 of 17 Date: August 29,2019 needed to decide how the Budget gap would be closed; either with an increase of 2.17% (0.0807 mils) or a pledge of reserves equal to $210,655 dollars or a mixture of the two. Town Manager Labadie explained Item 6 and Item 7 were to accept the budget, and Item 8 was discussion and decision regarding how Commission wished to close the budget gap. He reported the General Fund and the Special Revenue Fund Budgets were updated. Mr. Labadie explained the flow of the next three Agenda Items. He noted upon completion of Commissioner Gossett-Seidman's discussion the General Fund would be discussed and voted upon. A. DISCUSSION OF THE CITY OF DELRAY BEACH FIRE-RESCUE CONTRACT (THIS ITEM WAS ADDED TO THE AGENDA) Commissioner Gossett-Seidman indicated many residents approached her with questions regarding the fire contract. She stated she felt the ten-year contract with no cap was odd; therefore, she did some research and stated her facts as follows: • On July 7, 2016, the Town of Highland Beach and the City of Delray Beach entered a ten year no cap contract • Contract rates had risen for the past two consecutive years • A 10-year contract bound future Commissions to the contract • Prior to the Home Rule enacted in 1973 contracts could not exceed the term of the Commission approving the contract • Highland Beach was committed to this contract until 2026 • If the costs rose 5% to 10% annually until 2026 the contract could culminate at $9 million dollars She explained she contacted her colleagues at Barry University Law School who discovered under the Florida State Constitution the contract was illegal. She reported Florida Statute 166.2412 maintained no appropriations may be made from ad valorem taxes without a referendum on a multi-year contract if it exceeded the amount allowed by the municipality for an increase to tax payers; Highland Beach's maximum was $350,000 dollars. She noted this had been upheld countless times in Court. She referred to Attorney General Opinion (AGO) 2004-61, 2004; she read the content of the opinion which indicated obligations for a term in excess of one year funded by ad valorem sources were subject to approval by eligible voters. She read the contents of AGO 90-54 which was essentially the same as AGO 2004-61 indicating referendum approval was required. She reported in her research she discovered over ten cases which opined in suit. She stated she contacted the Attorney General's Office and was informed 166.2412 F.S. was in effect and the case law following it was in support. She reported the City of Delray Beach and Highland Beach officials which executed the contract in 2016 were no longer in office or employed by the municipalities. She mentioned the Town of Gulfstream had a similar contract for service with the City of Delray Beach with no cap which was also being raised 5%. Town Commission Special Minutes Page 5 of 17 Date: August 29, 2019 Commissioner Gossett-Seidman noted RFPs and RFQs were required and she wondered if these had been obtained previously. She noted she spoke with five attorneys personally, and the Attorney General's Office and was awaiting their opinions; this was at no cost to the Town. She stated she believed there was a problem with this contract. She stated it was hard for her to tell voters the contract would increase 5% to 10% annually for the next six years. She noted it would be difficult for her to vote on this budget as she was awaiting these opinions and was still conducting research; she did not feel the contract was valid if ad valorem taxes were increased to support it. She further discussed her research and case law regarding this type of contract. She noted this was an opportunity to reconsider the contract before approving the budget and raising taxes. She commented if rates continued to increase the contract could cost double in its initial cost in the long run. She noted Delray Beach needed Highland Beach as an east side fire department. She noted when Highland Beach first entered into this contract Highland Beach fire-rescue trucks went to the City of Delray Beach 75% of the time. She stated she did not feel the contract was legally or ethically appropriate. Town Manager Labadie expressed concerns regarding what was being proposed. He explained from an operational perspective, time was of the essence and Commission must adopt a budget. He stated as there was such a short period of time to address Commissioner Gossett-Seidman's concerns due to State mandates to hold a Public Hearing regarding the Budget next Thursday and again two week later, it would be operationally very difficult to address her concerns, especially given there were limited alternatives to the Delray Contract. He commented this was his opinion from an operational perspective; he could not speak to the legal elements. He cautioned the Commission's timing, noting these concerns could be pursued, but how and when should be carefully considered. Town Attorney Glen Torcivia commented if the Commission decided to renegotiate the contract or investigate a different fire rescue service provider, the Commission could appoint an individual to lead the effort. He agreed with Town Manager Labadie there was no way to get this done in the next six days. He stated in terms of the ten-year contract, there were many cities which had long-term contracts for fire rescue services. He noted the larger cities often insisted on a long-term contract. He stated he believed there was a clause in the fire contract which indicated it was subject to budget. He stated at this point Highland Beach needed to provide fire service somewhere somehow. He noted if Highland Beach were to contract with Palm Beach County Fire Rescue, Palm Beach County charged 3.5 mils, which was $9.1 million dollars. He noted Highland Beach had attempted to negotiate with Palm Beach County for $5 million dollars (Palm Beach refused), Boca Raton and Boynton Beach both refused to consider contracting with Highland Beach, and the coastal community group study revealed a high cost for fire service as well. He noted options were limited. Commissioner Gossett-Seidman stated she was not saying "drop Delray." She explained she had an ethical and legal problem if the contract with Delray Beach was invalid under the Florida Constitution. She commented the attorney which drew up the contract left before the signing and the individuals she had spoken to at Delray stated the Delray Town Commission Special Minutes Page 6 of 17 Date: August 29, 2019 Beach Budget was currently a mess. She stated she felt the Commission had an opportunity to renegotiate the contract at this point. She commented inheriting a ten-year contract with no cap weighed on her. She noted her colleagues had never heard of such a contract. She stated she wished to "fix the complication" and use it as a point of renegotiation or to obtain RFQs and RFPs. She noted she was unsure how to proceed which was why she was presenting her findings; however, she had ten Attorney General Opinions which revealed there was a problem with the contract. Commissioner David stated it was an interesting proposition but today was not the appropriate time to discuss the matter. She noted a budget must be adopted, and it would have to be based on what was known today. She indicated it would be possible to go back after the Budget process was completed to further investigate the matter. She noted Highland Beach could not walk away from the contract with Delray Beach and leave itself open to suit by Delray and without fire rescue services. She indicated she understood Commissioner Gossett-Seidman's concerns but now the budget needed to move forward. She commented 5% was a normal cost increase for employees and this was where the 5% increase was originating. She noted the Highland Beach Police Department received the same type of increase. Commissioner Donaldson stated he was prepared to act on the Budget today. He indicated he was disappointed this was being brought up at the last minute. He asked if the Town Attorney received any of this information prior to the Meeting. Town Attorney Torcivia responded in the negative. Commissioner Donaldson stated he was disappointed he did not receive any of Commissioner Gossett-Seidman's information prior to this Meeting and felt this should be discussed at another time. Vice Mayor Babij stated the contract with Delray Beach fell between a BATNA (Best Alternative to a Negotiated Agreement) and a TINA (There Is No Alternative). He noted Highland Beach labor was going up 5%; Delray Beach labor was going up the same percentage. He indicated Highland Beach could revisit Commissioner Gossett- Seidman's concerns; the contract had a three-year cancellation notice. He stated he was willing to revisit the contract at a later date. He indicated he had no problems with this contract for this Budget. Mayor Zelniker agreed. She noted last year the Vice Mayor conducted research regarding possible alternatives to Delray Beach, and there were none. She stated Highland Beach needed fire rescue services. She asked why Commissioner Gossett- Seidman did not mention this last year. Commissioner Gossett-Seidman stated last year the Mayor was Mr. Feldman who negotiated this contract, she was just a few months into her term at the time and did not feel she should challenge Mayor Feldman. She explained why she decided to investigate the legality of the contract in the last week after conversation with her colleagues. She Town Commission Special Minutes Page 7 of 17 Date: August 29, 2019 noted she was researching late last night and could not provide any of this information to the Commissioners or Town Attorney Torcivia as a result. She stated she did not know the legality of approving a Budget if a contract may or may not be illegal. She indicated she was not saying to not contract Delray Beach, she was asking could the Town approve a Budget with a possibly invalid contract. She stated there were grounds to terminate and renegotiate the contract. She asked when this could be discussed. Mayor Zelniker responded this could be discussed at a regular business meeting. Discussion ensued regarding what was investigated last year regarding fire rescue services, the legality of the Contract with Delray Beach, and discussing this matter further at the next Town Commission Meeting. Finance Director Lalla stated if the issue were the increase in the fire rescue budget of $215,000 dollars, there were sufficient non-ad valorem revenues in the General Fund Budget which could cover the amount of this increase. He noted the tax increase was not equal to this $215,000 dollar increase in fire rescue. He explained there were revenues, such as half cent sales tax, utility taxes, interest earnings, and other non-ad valorem revenue sources which were more than sufficient to cover the increase in this contract amount. Discussion ensued regarding discussing this at the first Town Commission Meeting in October. Mr. Doug Hillman from Dalton Place thanked Commissioner Gossett-Seidman for bringing this to his attention. He stated appropriate research to determine the legality of the contract should be done. He stated putting Delray Beach on notice for the three years, from a negotiating standpoint, would be inappropriate. He agreed Delray Beach needed Highland Beach. He stated Highland Beach should begin to look for a new option for fire service which would hint to Delray Beach that Highland Beach might be unhappy. He recommended giving the assignment to the Financial Advisory Board. He noted this was a major service which took up a large percentage of the Budget, and Highland Beach should always be looking to better life services. Mr. John Ross from Casuarina asked about flow through from increased assessments. Finance Director Lalla reviewed the budget line items which indicated an increase from the rollback of about $450,000 dollars generated by growth in the property tax. Mr. Ross stated residents measured expenses by dollars spent, not by millage rate; therefore, residents needed to know the percentage increase of the total tax bill. Discussion ensued regarding tax rates, 2019 tax rates, tax income, ad valorem taxes, tax increases, tax roll increases, property appreciation, and the 6% total tax increase. Mr. Ross stated the tax bill would go up 6%, cost of living went up 1.6%, therefore, residents would have cost increase of 4.4% which meant the Town had spent too much money by 4%. He noted Commissioner Gossett-Seidman had two points: 1) A Town Commission Special Minutes Page 8 of 17 Date: August 29, 2019 referendum was needed to approve the contract with Delray Beach. He noted this was not done due to Highland Beach choosing to lease the fire truck in the contract which brought the amount below the mandatory referendum amount. He explained the lease. He noted Finance Director Lalla indicated the money could be moved in the Budget so ad valorem taxes would not be utilized for the contract increase. He stated he felt this was "bad law" as it would have the same effect on the consumer. He agreed the entire cost increase was due to personnel cost increase. He noted the private sector should be considered for fire rescue service options. He noted if an RFQ or RFP were sent out the likely respondents would be private firms and he believed the result would be competitive pricing. He recommended sending the budget to the Financial Advisory Board in the future for detailed review, which would better enable the Town Commission to consider the bigger issues. He urged the Town Commission not to bridge the budget gap by utilizing reserves; it was better to keep reserves for emergencies. Commissioner Donaldson asked who technically leased the truck. He stated he believed the truck lease was held by Delray Beach and ownership would transfer to Highland Beach at the end of the lease. Town Attorney Torcivia concurred. Commissioner Donaldson stated the Town Commission was not"playing games" with the millage rates. He stated the Town Commission was expected to establish a not to exceed millage rate to provide to the tax office; this was done. He noted the Town Commission was now working through a process of setting spending needs and priorities to bring the budget down to a reasonable level. He indicated the Budget was clearly tied to the needs of the Town and the Commission was being open, thoughtful, and methodic in developing a budget. Dr. Rick Greenwald from Tranquility Drive applauded the Town Commission for its discussion of the budget and the budget process. He noted he appreciated Commissioner Gossett-Seidman's efforts, but the Town clearly needed to move forward with the Budget. He stated he believed a 2.17% increase in millage rates was reasonable and he encouraged the Town Commission to move forward with the millage rate increase as opposed to withdrawing money from the reserve fund. He stated it was clear the fire contract was a big item for discussion; he noted Town Manager Labadie indicated the contract would be fully investigated prior to next year's budget which he found reassuring. He suggested the Town Commission appoint a task force to begin reviewing the fire contract situation, facts, and data. He noted more data regarding the fairness of the contract rates was needed to fully understand the fire service situation. He noted if Highland Beach was being charged reasonable rates then so be it; if Highland Beach was being charged unreasonable rates then action needed to be taken. MOTION: Commissioner Gossett-Seidman moved to provide her data and ask the Financial Advisory Board to review the Delray Beach Fire-Rescue contract and make recommendations to the Town Commission. Vice Mayor Babit seconded the motion. Town Commission Special Minutes Page 9 of 17 Date: August 29,2019 Mayor Zelniker noted Delray Beach had the right to cancel the contract with Highland Beach. She indicated Delray Beach was not overly pleased with Highland Beach; Highland Beach had been complaining about the contract with Delray Beach for the last three years. She stated she would hate to see Delray Beach say, "we don't need this aggravation" and cancel the contract. She stated the Town needed to be cautious and careful about discussion of the City of Delray Beach fire-rescue. She stated the Financial Advisory Board could review the contract. She noted the Financial Advisory Board was directed last year to investigate the possibility of a Highland Beach Fire Department and never followed through. She reported the residents wanted certain services and the Town Commission needed to provide such services. She stated most residents appreciated the Fire Services provided by Delray Beach and wanted Delray Beach Fire Rescue. She stated if the contract were put on a referendum, she believed the residents would approve. She noted a private fire service contractor had been employed by the Town in the past; the private contractor provided subpar services. She agreed the Financial Advisory Board could review the contract, but it was important to remember the advisory board members were volunteers, not experts and possibly a professional consulting firm should be considered. Vice Mayor Babij suggested allowing the Financial Advisory Board to help clarify the details of the contract and consider hiring a consultant in the future. UPON ROLL CALL: Commissioner Gossett-Seidman Yes Vice Mayor Babij Yes Commissioner David Yes Commissioner Donaldson No Mayor Zelniker No The motion carried 3-2 with Commissioner Donaldson and Mayor Zelniker dissenting. MOTION: Commissioner David made a motion to direct Town Attorney Torcivia's firm to check the legality of the City of Delray Beach Fire-Rescue contract. Commissioner Donaldson seconded the motion. UPON ROLL CALL: Commissioner David Yes Commissioner Donaldson Yes Commissioner Gossett-Seidman Yes Vice Mayor Babij Yes Mayor Zelniker Yes The motion carried 5-0. Mayor Zelniker called for discussion or acceptance of the proposed Budget. Town Commission Special Minutes Page 10 of 17 Date: August 29,2019 MOTION: Commissioner David moved to accept the proposed General Fund Budget for Fiscal Year 2019-2020 as revised and presented. Commissioner Donaldson seconded the motion. UPON ROLL CALL: Commissioner David Yes Commissioner Donaldson Yes Commissioner Gossett-Seidman Yes Vice Mayor Babij Yes Mayor Zelniker Yes The motion carried 5-0. 7. DISUSSION AND ACCEPTANCE OF THE PROPOSED BUDGETS FROM FISCAL YEAR 2019-2020 FOR THE FOLLOWING SPECIAL REVENUE FUNDS A. Building Department Fund Town Manager Labadie indicated there were no concerns expressed at the last Budget Meeting regarding the Building Department Fund Budget. He noted the Building Department was self sufficient and not related to the General Fund. Mayor Zelniker asked if there were any questions or comments; hearing none, she called for a motion. MOTION: Commissioner David moved to accept the proposed Budget from Fiscal year 2019-2020 Special Revenue Funds: Building Department Fund and Discretionary Sales Surtax Fund. Commissioner Donaldson seconded the motion. UPON ROLL CALL: Commissioner David Yes Commissioner Donaldson Yes Commissioner Gossett-Seidman Yes Vice Mayor Babij Yes Mayor Zelniker Yes The motion carried 5-0. B. Discretionary Sales Surtax Fund Approved unanimously with motion above. Town Commission Special Minutes Page 11 of 17 Date: August 29, 2019 8. DISCUSSION AND ACCEPTANCE OF FINAL MILLAGE RATE FOR FISCAL YEAR 2019-2020. Town Manager Labadie stated the millage rate was reviewed earlier in the Meeting; the gap was $210,000 dollars. He explained he and Staff had been required to find funds to cover a $700,000 dollar budget gap and managed to narrow the gap to $210,000 dollars. He commended his Staff Team and Town Leaders for their efforts. He stated he felt the new process worked well. He asked if there were any questions. Commissioner David stated she tried to be fiscally conservative with other peoples monies and as property values were uncertain she recommended not pledging any reserve funds and recommended raising the millage rate by 0.1 mils (rather than 0.0807 mils) in an effort to build into the reserves. She noted this would be an increase of $50 dollars per year for a $500,000 dollar home. She stated she believed Highland Beach rates had been kept unreasonably low in the past. Commissioner Donaldson agreed; he did not wish to pledge reserves to fill the gap. He stated the Town Budget was a strategic budget, not speculative. He noted the budget was well thought out and crafted. He stated he was worried the budget was maybe too tight. He noted he was unsure if he was ready to approve of a millage increase by 0.1 mils; however, he did agree reserves should be built. He stated this might be a policy decision to be considered in the future. He recommended research be done by the FAB and Staff regarding possible policy in this regard. He indicated he was comfortable with the proposed 0.0807 mil increase and did not wish to pull from reserves. Commissioner Gossett-Seidman stated she had lived here for 28 years and residents did not wish for taxes to be raised, but she understood in the past 28 years Highland Beach taxes had been kept low by not upgrading the Town, not upgrading A1A, not upgrading the sewer system which was falling into disrepair, etc. She indicated the Town was at a point it needed to review its Capital Expenditures and long-term contracts. She noted property values had risen very well since 2008. She stated she was not comfortable taking out of the reserves or increasing the millage rage; however, she felt it was more important to leave the reserves intact and raise the millage rate by the proposed 0.0807 mils. She recommended sending a letter to the residents and renters and explaining the Town's options and why there was a tax increase. Vice Mayor Babij stated he was in support of utilizing the reserves; he was confident these reserves were in excess. He stated he did not want to raise the millage rate. He stated the Town Manager was also comfortable with pledging reserves. He recommended pledging the reserves which the Town knew it would not use. Mayor Zelniker noted Highland Beach had the third lowest millage rate for a municipality of this size. She noted Highland Beach residents wanted certain services. She stated Highland Beach had no source of income and no resources to replenish reserves; therefore, should not touch the reserves. She suggested possibly surveying the community to discover what types of services Highland Beach residents wanted. She explained the Town was 70 years old and the sewers were in disrepair, the sea level was Town Commission Special Minutes Page 12 of 17 Date: August 29, 2019 rising, and other services might need to be provided. She stated she understood residents wanted a Highland Beach Post Office and wanted Delray Fire Rescue; however, a survey could be taken to see if this were the case. She noted a five- year plan was being developed. She was in support of increasing the millage rate. She stated she had lived in her condo for 19 years and had homesteaded. She stated she was surprised by her appraised value noting she could sell her condo for much more than the appraised value. She discussed residents who were not homesteaded. She discussed Highland Beach employees and unions; the Town needed to take good care of its employees and residents. Commissioner David discussed infrastructure and repairs Highland Beach would soon need. She agreed with Commissioner Donaldson an overly tight budget would cause problems if there were any unforeseen emergencies, such as a crack in the sewer line. She stated it was important to be proactive. Commissioner Gossett-Seidman asked about Vice Mayor Babij's comments regarding the reserve funds. Finance Director Lalla explained in the current year Fiscal 2019 Budget, the excess of revenues over the amount budgeted, and the amount of expenditures which were not expended fully, would equal approximately $100,000 dollars. He explained Vice Mayor Babij was suggesting using this overage to help close the gap as opposed to a full 0.0807 mil increase. Vice Mayor Babij concurred. Commissioner Donaldson stated if the $100,000 dollars were not utilized to close the gap, the funds could be used to increase reserves. He stated by not pledging reserves the reserves could be increased, and the reserves might be needed if there was an emergency the Town was not prepared to address. MOTION: Commissioner Donaldson moved to adopt the 2020 millage rate with the proposed option to increase the millage rate at 2.17%. Commissioner David seconded the motion. UPON ROLL CALL: Commissioner Donaldson Yes Commissioner David Yes Commissioner Gossett-Seidman Yes Vice Mayor Babij No Mayor Zelniker Yes The motion carried 4-1 with Vice Mayor Babij dissenting. 9. CONSIDERATION OF ADOPTION AGREEMENT AND RESOLUTION ESTABLISING AN ICMA-RC 401(a) RETIREMENT PLAN Town Commission Special Minutes Page 13 of 17 Date: August 29, 2019 A. PROPOSED RESOLUTION/MONEY PURCHASE RETIREMENT BENEFIT PLAN A RESOLUTION OF THE TOWN COMMISSION OF THE TOWN OF HIGHLAND BEACH, FLORIDA, APPROVING THE ESTABLISHMENT OF A MONEY PURCHASE RETIREMENT BENEFIT PLAN, APPROVING THE EXECUTION AND DELIVERY OF AN ADOPTION AGREEMENT BETWEEN THE TOWN OF HIGHLAND BEACH AND ICMA RETIREMENT CORPORATION, AUTHORIZING THE TOWN MANAGER TO TAKE ALL ADDITIONAL ACTIONS NECESSARY TO ESTABLISH SAID RETIREMENT BENEFIT PLAN, AND PROVIDING AN EFFECTIVE DATE. Town Manager Labadie stated he was an FRS (Florida Retirement System) participant. He explained his FRS rate increased annually and was paid as a percentage of his base salary. He noted an option existed to create an ICMA account, which was more of traditional defined contribution plan versus a defined benefit program, and as such the Town would capture significant savings. He noted Legal worried FRS might be difficult. He noted he would work hard to gain FRS approval. He indicated in the upcoming Fiscal Year ICMA would save the Town of Highland Beach $15,000 dollars which was a significant savings. He explained the savings would compound over time. He indicated Staff had been in contact with ICMA and this was relatively straightforward; the Town Commission would pass a resolution which would be fine-tuned by Finance Director Lalla and this would be tied to the first amendment of his employment contract. He indicated there was additional language to be included by Town Attorney Torcivia which noted this agreement was predicated by FRS's acceptance. Vice Mayor Babii stated this was an excellent idea and he hoped the ICMA plan could be expanded out to others as well. He noted FRS was one of the most troublesome costs for the Town to control. Commissioner David stated she felt this was a win-win situation; Highland Beach employees did not benefit substantially from the amounts paid to FRS and would benefit from a more traditional retirement plan. Commissioner Gossett-Seidman approved. Mayor Zelniker agreed. She asked if ICMA was a 401K type of plan. Town Manager Labadie responded this was a 401A program. Commissioner Donaldson approved. He thanked Town Manager Labadie for bringing this to the Town Commission's attention. Mayor Zelniker asked if there were any public comments. Dr. Rick Greenwald asked if this went through the Financial Advisory Board. He stated he was asking in terms of governance and process. Town Commission Special Minutes Page 14 of 17 Date: August 29, 2019 Town Manager Labadie responded in the negative. He noted at this point the change was purely for his own employment contract with the Town Commission. He stated if this plan was extended to the Town Commission and Senior Management could be an option, but the Town could never completely move away from FRS as it was a contract in perpetuity and was compulsory for most Town employees including police and fire. He noted if Town Commission wished it could go before FAB to be considered as an option for Town Commission and Senior Management; ICMA could be a good recruitment tool for attracting senior management as well in the future. He explained FRS worked very well for police, fire, and general employees; however, FRS was not as attractive to department heads and senior management. Commissioner Donaldson stated each Commissioner had met with Town Manager Labadie regarding this agreement and if there had been any concerns it would have gone before the FAB. Mr. Douglas Hillman noted a compensation board would be the proper type of board to review items such as these. He stated he felt this change was vital for senior management and would be an excellent tool to draw talent to Highland Beach. He recommended assisting Town Manager Labadie in this process and recommended offering the plan to any employee who qualified. He recommended consideration of a compensation committee to help with the process. Mayor Zelniker and Town Manager Labadie indicated they would investigate the possibility of a compensation committee. MOTION: Commissioner David moved to adopt the proposed resolution. Commissioner Gossett-Seidman seconded the motion. UPON ROLL CALL: Commissioner David Yes Commissioner Gossett-Seidman Yes Commissioner Donaldson Yes Vice Mayor Babij Yes Mayor Zelniker Yes The motion carried 5-0. Town Commission Special Minutes Page 15 of 17 Date: August 29,2019 10. CONSIDERATION OF FIRST AMENDMENT TO TOWN MANAGER EMPLOYMENT AGREEMENT (PURSUANT TO PERFORMANCE REVIEW.) Town Manager Labadie stated this was the instrument to memorialize the discussions held regarding his performance. He stated Item 2 of the Employment Agreement was modified yesterday to predicate FRS acceptance. He noted even with the merit increased proposed for all employees who were potentially qualified, this was actually a reduction in his overall compensation package. Vice Mayor Babij asked Town Manager Labadie to clarify his last statement. He stated he did not want to vote to approve something which would not benefit Mr. Labadie. Town Manager Labadie reported a compensation study was done in 2013 for the community and the Town Manager median salary seven years ago was set at about $143,000 dollars. He explained even with the merit increase his salary was below what the compensation study showed as the Town Manager rate of$143,000 dollars. He noted with the 5% merit increase adjustment and the $15,000 dollars savings in FRS contributions, Highland Beach saved a few thousand dollars in compensation costs. He stated he asked for the education incentive (included in the personnel manual) to be clarified in his contract to extend this benefit to himself. Vice Mayor Babij noted a median base salary of $143,000 dollars with a merit increase over seven years equaled $188,000 dollars; Mr. Labadie's current salary was $150,000 dollars and this new contract would make his salary $157,500 dollars. He stated he felt this was a very reasonable salary and should be extended to Mr. Labadie with the education component as well. He stated he felt the education benefit was not added to Mr. Labadie's contract due to technicalities and this should be rectified. Town Attorney Torcivia stated unless there was a legal question regarding this last item, he needed to leave the Meeting. Mayor Zelniker indicated there were no legal questions and bid Town Attorney Torcivia safe travels. Commissioner David stated she would approve a higher salary for Town Manager Labadie; he was an asset. She approved of the education incentive for Mr. Labadie as well. Commissioner Donaldson approved of the proposed agreement. Commissioner Gossett-Seidman agreed and noted if there were other employees whose education incentive needed review this should be done. Mayor Zelniker agreed and stated Town Manager Labadie's value was immeasurable. She commended Town Manager Labadie for his excellent work. She discussed Mr. Labadie's excellent qualifications, work ethic, and abilities. Mayor Zelniker asked if there were any public comments. Town Commission Special Minutes Page 16 of 17 Date: August 29,2019 Mr. Douglas Hillman agreed Town Manager Labadie had performed excellently this year and suggested a one-time bonus might be appropriate. Vice Mayor Babij disagreed with a one-time bonus as it might cause conflict between employees. He noted approval of the education incentive in Mr. Labadie's contract was essentially a $4,000 dollar bonus to be paid annually. He stated Mr. Labadie was exceptional but he did not want to put Mr. Labadie in an uncomfortable position with other senior management employees. Dr. Rick Greenwald agreed Town Manager Labadie performed wonderfully. He indicated this was another example of how a compensation committee was needed; bonus and performance compensation structure needed to be built into key employee contracts. He stated this should be set by a compensation committee. Commissioner David agree a compensation committee would be beneficial. She asked for Town Attorney Torcivia to ensure the Town charter or policy did not prohibit a possible bonus program. Town Manager Labadie thanked the Town Commission. Commissioner Donaldson stated he had a different opinion regarding the compensation committee. He indicated private discussion of employee compensation plans was preferable to discussing employee compensations plans in a public meeting. He noted there were also other conversations to be had with the employee which were better conducted privately and then the conclusion of the conversations could be brought out for general discussion. Commissioner Gossett-Seidman suggested further discussion at a future meeting. She thanked Town Manager Labadie. MayorZelniker stated included in the rules and regulations for Highland Beach employees there was a method of reward for any employee who went above and beyond and saved the Town money; the Town Manager and the Town Commission had the right to reward a bonus if deemed appropriate. She stated Mr. Labadie had saved Highland Beach money, was highly capable, and had proven himself to be exceptional. She asked for Mr. Hillman and Dr. Greenwald to be provided a copy of these rules and regulations. MOTION: Commissioner Donaldson moved to adopt the first amendment to the employment agreement for the Town Manager. Commissioner David seconded the motion. UPON ROLL CALL: Commissioner Donaldson Yes Commissioner David Yes Town Commission Special Minutes Page 17 of 17 Date: August 29,2019 Commissioner Gossett-Seidman Yes Vice Mayor Babij Yes Mayor Zelniker Yes The motion carried 5-0. 11. COMMISSION MEETINGS: Mayor Zelniker read the following announcements into record: • Town Hall Closed — September 2, 2019 — Observance of Labor Day • Town Commission Regular Meeting — September 3, 2019 — 1:30 PM • Town Commission Special / First Public Hearing Budget Meeting — September 5, 2019 — 5:01 PM • Planning Board Meeting — September 12, 2019 — 9:30 AM • Town Commission Special/Second Public Budget Meeting —September 19, 2019 — 5:01 PM • Town Commission Workshop Meeting — September 24, 2019 — 1:30 PM Mayor Zelniker commented if due to the hurricane the Town Commission was unable to meet, an email would be sent out if possible. 12. ADJOURNMENT Mayor Zelniker asked for the Town Commission to stay after the Meeting to sign some paperwork. She wished safe journeys for all residents of Highland Beach during the evacuation. She warned residents not to drive on a street if there were any wires down. There being no further business, Mayor Zelniker adjourned the meeting at 2:08 PM. APPROVED at July 7, 2020 Virtual Town Commission Meeting. �Ch`l�G�a�r Douglas Hillman, Mayor ATTEST: Transcribed by: TEI/he i A atter. / 7g) 2io lane •a Gaskins, MMC D to Town Clerk August 28, 2019 Commission Special Inutes , he FINAL Final Audit Report 2020-07-08 Created: 2020-07-07 By: Beverly Wright(bwright@highlandbeach.us) Status: Signed Transaction ID: CBJCHBCAABAA4UotyVPANnz8-BNT5NYeN_7Phvz7P9zX "August 28, 2019 Commission Special Minutes.he FINAL" Histor y ,t Document created by Beverly Wright(bwright@highlandbeach.us) 2020-07-07-7:54:39 PM GMT-IP address: 12.18.232.162 Document emailed to DCHillman (dhillman@highlandbeach.us)for signature 2020-07-07-7:55:09 PM GMT 5 Email viewed by DCHillman (dhillman@highlandbeach.us) 2020-07-08-1:23:57 PM GMT-IP address:76.109.130.151 Document e-signed by DCHillman (dhillman@highlandbeach.us) Signature Date:2020-07-08-1:25:03 PM GMT-Time Source:server-IP address:76.109.130.151 Signed document emailed to Lanelda Gaskins (Igaskins@highlandbeach.us), DCHillman (dhillman@highlandbeach.us) and Beverly Wright(bwright@highlandbeach.us) 2020-07-08-1:25:03 PM GMT III Adobe Sign