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2019.05.22_FAB_Minutes_Regular• TOWN OF HIGHLAND BEACH • ® FINANCIAL ADVISORY BOARD QUARTERLY MINUTES Town Hall / Commission Chambers Date: May 22, 2019 3614 South Ocean Boulevard Time: 3:00 PM Highland Beach, Florida 1. CALL TO ORDER Vice Chairperson Stern called the Financial Advisory Board Regular Meeting to order at approximately 3:00 PM. He introduced the new Board Member Douglas Hillman. 2. ROLL CALL PRESENT AT ROLL CALL: Chairperson Alan Polin Member Jeff Hollander Member Edward Komfeld Member Neil Eisenband Member James Karabec Member Doug Hillman Vice Chairperson David Stern Deputy Town Clerk Beverly Wright Assistant to the Town Manager Terisha Cuebas 3. PLEDGE OF ALLEGIANCE The Financial Advisory Board led the Pledge of Allegiance. Vice Chairperson Stem asked those present to silence all cell phones. 4. APPROVAL OF THE AGENDA Vice Chairperson Stem asked if there were any additions, deletions or modifications to the Agenda Member Polin requested addition of 8G Discussion of Insurance Review and 8H Review Banking Relationships. Vice Chairperson Stem indicated these Items would be added. MOTION: Vice Chairperson Stem moved to accept the agenda as amended. Member Hollander seconded the motion, which passed unanimously. Financial Advisory Board Regular Minutes Wednesday May 22 2019 Page 2 of 9 5. PUBLIC COMMENT (limited to three (3) minutes per speaker) Vice Chairperson Stern invited the public to approach the podium for Comments. Mr. Fred Rosen stated he had asked the Commission to give the Advisory Boards more authority. Vice Chairperson Stern asked if anyone else present wished to speak; hearing none, he closed the Public Comment portion of the Meeting. 6. APPROVAL OF MINUTES A. January 24, 2019, Regular Meeting B. February 6, 2019, Regular Meeting Vice Chairperson Stern asked if there were any corrections to the January 24, 2019 Regular Minutes. There were none. MOTION: Member Hollander moved to approve the January 24, 2019 Regular Minutes as presented. Member Polin seconded the motion, which passed unanimously. Vice Chairperson Stem asked if there were any corrections to the February 6, 2019 Regular Minutes. There were none. MOTION: Member Hollander moved to approve the February 6, 2019 Regular Minutes as presented. Member Polin seconded the motion, which passed unanimously. 7. UNFINISHED BUSINESS A. None 8. NEW BUSINESS A. Nomination of Officers 1. Chairperson 2. Vice Chairperson Vice Chaimerson Stern nominated Alan Polin as Chairperson. MOTION: Vice Chairperson Stern nominated Alan Polin as Financial Advisory Board Chairperson. Member Karabec seconded the motion, which passed unanimously. Financial Advisory Board Regular Minutes Wednesday May 22 2019 Page 3 of 9 Vice Chairperson Stern stated the Vice Chairperson position would remain the same until his term was served. He passed the gavel to Chairperson Polin. B. Discussion of Fiscal Year 2020 Budget 1. Budget Calendar Chairperson Polin asked Finance Director Matthew Lalla to make a presentation Finance Director Lalla reviewed the Budget Calendar including dates and topics of meetings: Thursday, July 11, 2019 at 2:00 p.m. Financial Advisory Board Meeting to review and discuss draft budget and requests; Tuesday, July 23, 2019 at 1:30 p.m. Town Commission Special Meeting for the first reading of levy and setting the tentative maximum millage rate; August 1, 2019 at 12:00 p.m. to discuss Public Safety; August 13, 2019 at 12:00 p.m. to discuss Building Department, Pubic Works/CIP; August 29, 2019 12:00 p.m. optional "if needed" meeting; Thursday, September 5th at 5:01 p.m. Town Commission Public Hearing to tentatively adopt proposed millage and proposed budget; Thursday, September 19th at 5:00 p.m. Town Commission Special Meeting to adopt final millage and final budget ordinances. He noted the Budget would be more detailed this fiscal year to better promote understanding. Member Hillman asked if Public Works and the CIP were included in the Budget. Finance Director Lalla responded in the affirmative. He explained the meeting to discuss Public Works and CIP was scheduled for purposes of delving more deeply into the topic. Finance Director Lalla noted the Financial Report through April 30, 2019 indicated the Town was fiscally on course. He noted the Financial Report included explanations for departments which were exceeding expenditures. He noted the Finance Department was investigating alternative money market funds which might exhibit better performance than the Fidelity Fund. Vice Chairperson Stern asked about tax revenues. Finance Director Lalla reported tax revenues were expected to make Budget by December and January. Member Hillman asked about (indecipherable 15:55). Finance Director Lalla explained additional budget monies were added for the Building Department to cover some additional contractual service expenses and the cost of the Town Planner, which was not built into the original budget. He noted the Town fully expected to cover the cost of the Building Department with Building Permit Revenues (estimated at $700,000 dollars) projected through the end of the year. Discussion ensued regarding the previous year's budget revenue share and the amount the Building Department would possibly net this year. Town Manager Labadie reported State Legislation indicated the Town was not permitted to make money with the Building Department; Building Department Revenues would go into a Special Revenue Fund which could only be used to cover Building Department costs. He discussed the new Building Department hybrid system utilizing SAFEbuilt noting the Financial Advisory Board Regular Minutes Wednesday May 22 2019 Page 4 of 9 Town could not afford a full in-house Building Department. He explained the first year would have a higher cost, but this would lower and the Building Department would share costs with other Departments. Member Hillman recommended due diligence in cost identification and noted he approved of the new system. Town Manager Labadie agreed. Chairperson Polin thanked Town Manager Labadie for pointing out State Legislature did not allow the Building Department to be a profit generating entity for the Town. He recommended hiring an outside company to ensure the Town was keeping in line with State Legislature in this regard. Town Manager Labadie noted Staff was carefully monitoring the situation. Member Hollander asked about cost allocation. Town Manager Labadie responded a simple cost allocation model was being employed. Chairperson Polin asked if the Town used the best practice of no less, but no more than, six months of operating budget expense as surplus. Finance Director Lalla responded the current surplus exceeded six months, but was the result of a one time sale of property which was not going to occur again. He explained it was not as if the current surplus had built up over time through government revenues; therefore, it was viewed as a stock of money, not a stream of money and as such should be spent very carefully as it would not be replaced quickly. He made recommendations regarding how to spend the surplus funds in the future. Chairperson Polin stated he understood; however, Municipal Government Policy indicated a six month surplus amount was the best practice. He suggested giving the extra surplus back to the residents of the Town of Highland Beach through capital improvements or a lower tax bill. Finance Director Lalla indicated the absolute minimum was two months worth of operations. Vice Chairperson Stern suggested accelerating emergency fund reserves. Discussion ensued regarding the surplus, emergency funds, and the Town revenues being approximately $350,000 dollars this fiscal year for the surplus. Finance Director Lalla indicated in the past the Town's surplus fund balance had been used to mitigate tax increase. Member Hollander recommended a five year plan to determine the needs of the Town. Chairperson Polin agreed it was important to study the issue prior to relinquishing funds back to the public. The Board agreed. MOTION: Member Hollander made a motion to propose a request for a five-year business plan that went over what the immediate needs were for maintaining infrastructure and any other unusual cost, followed separately by a longer- term plan for 20 to 30 years. Member Hillman seconded the motion. Roll Call: Member Hollander - Yes Member Hillman - Yes Member Karabec - Yes Member Eisenband - Yes Member Komfeld - Yes Vice Chairperson Stem - Yes Chairperson Polin Yes The motion passed on a 6 to 0 vote. Financial Advisory Board Regular Minutes Wednesday May 22 2019 Page 5 of 9 Chairperson Polin suggested a recommendation to the Commission to review and evaluate banking relationships. Discussion ensued regarding Town investments, CDs, being careful regarding investments, and investment with the State. MOTION: Member Hollander made a motion to make a recommendation to the Commission and Town Staff for a review of all banking relationships in regards to fees and net returns, to include penalties and costs if any changes were made. Member Hillman seconded the motion, which passed unanimously. Member Komfeld asked the Finance Director to develop an analysis of fund balances, which demonstrated an in-depth explanation of how each balance was reached for the FAB. Finance Director Lalla agreed. Chairperson Polin asked for an update regarding financial audit filing with the State for Fiscal Year 2018-2019. Finance Director Lalla responded the audit would be completed at the end of the month. He explained the newly State -required Other Post -Employment Benefits (OPEB) slowed down the process this year, as well as the briefly vacant Finance Director position. He noted upon completion the audit would be presented to the FAB in July, along with the Budget. He indicated the Highland Beach Financial Information System was weak and needed replacement, but this was included in the proposed Budget. C. Discussion of Employee Health Insurance Program Finance Director Lalla reported in the agenda packet there was a comparison between current health insurance and various proposed health insurance programs. He noted the current health provider was United Health Care. He reported the number of Town employees now exceeded 50, which provided opportunities for better healthcare pricing. He indicated after review and discussion of the proposal summaries, the consensus opinion (Staff, Town Insurance Broker and Vice Mayor Babij) lead to the recommendation of two plans to be offered through Humana: a Base POS Plan with an HRA and a Buy -up option POS Plan. He referred the Board to the Humana Rate and Comparison on the last page of the insurance information packet, which included negotiated rates. He reported Humana was a better insurance company with a better service plan at a lower cost than current insurance costs. Vice Chaimerson Stem asked about the possibility of negotiating these rates for 15 months to bring the timing in line with the Fiscal Year. Finance Director Lalla responded in the negative; this was a one-year renewal for which he would request a three- month extension towards the end of the contract year. He indicated he understood the importance of bringing the insurance in line with either the Fiscal Year or the calendar year, and he was working towards that end. Member Karabec asked about employee cost for insurance. Finance Director Lalla explained health insurance was free of charge unless the employee wished to purchase a Buy -up health insurance plan (approximately $94 dollars per month for a single employee). Financial Advisory Board Regular Minutes Wednesday Mav 22 2019 Page 6 of 9 Member Hillman asked if the Buy -up option provided a reduced deductible. Finance Director Lalla responded in the affirmative. Member Hillman asked if the employees would be pleased with the new health plan options. Finance Director Lalla responded in the affirmative. Discussion ensued regarding the new plan versus the old plan, the national network through Humana, Staff s displeasure with the current health plan, the Town Insurance Broker receiving 5% of the insurance rate as opposed to a flat fee, 5% being the market rate for an Insurance Broker, and the possibility of engaging an outside firm to audit all Town insurance programs. Member Karabec asked about the new policy deductible and office visits. Town Insurance Broker Marc Rheingold from Marc Rheingold and Associates responded the copay for office visits did not apply towards the deductible. Member Karabec asked if Mr. Rheingold could provide the FAB with a list of each employee's expenditures. Mr. Rheingold responded in the negative; he was not privy to this information. Discussion ensued regarding the employees feelings regarding United Health Care/NPH, Humana being a better carrier, Staff members surveying employees for feedback regarding the UHC/NPH and Humana, employee feedback regarding Humana being positive, UHC/NPH having service issues, the number of employees including part time, full time, and temporary employees, and HRA versus POS. Discussion ensued regarding the new plan as compared with the current plan. Member Kornfeld stated he approved of the new plan. Member Hollander reported he served on the Board at Boca Hospital and Humana was very strong in South Florida while UHC had been put on notice by Boca Hospital due to having the highest rate of denial on claims. Chairperson Polin thanked Mr. Rheingold and Finance Director Lalla. MOTION: Vice Chairperson Stem made a motion to recommend to Commission to accept the Humana Insurance proposal. Member Hollander seconded the motion, which passed unanimously. D. Discussion of Water and Sewer Rate Study Finance Director Lalla reported the Water and Sewer Rate Study was approved by the Commission in November 2018, was put on hold due to Ocean Walk, and now the Town was prepared to move forward with the Study investigating two scenarios: how much water rates needed to be increased to cover debt service costs paid with ad valorem taxes, and restructuring of the sewer fee per equivalent residential unit (for example, set fee per two bathrooms as opposed to set fee per household). Member Hollander disagreed with the per equivalent residential unit fee. He explained he lived in a four -bathroom home, alone, 50% of the year, and felt this was the case with many residents. Member Karabec agreed with Member Hollander. Finance Director Lalla stated the purpose of the rate study was to determine a fair rate structure as compared with other communities. Discussion ensued regarding Town of Highland Beach being a unique community, study parameters, Public Resources Management Group conducting the study, the fee of the study still being under negotiation, but possibly costing $15,000 dollars to $20,000 dollars, the need to ensure the budget was balanced, water and sewer being a non-profit department, the possibility of a transition plan to gradually transition from ad valorem taxes to water rates covering debt Financial Advisory Board Regular Minutes Wednesday May 22 2019 Page 7 of 9 service, looking at water usage to determine sewer fees, and using water for irrigation running up water usage without running up sewer usage which could unnecessarily increase sewer fees for residents. Finance Director Lalla reported this Study was expected to be completed within 90 days (September 2019) which would enable the Town to implement the new water and sewer rates in time for the new Fiscal Year and the standard increase. Chairperson Polin asked the contract to include a penalty if the work product was not received prior to final budgetlmillage rate. Finance Director Lalla responded he did not feel this was necessary as the Water and Sewer rates could be adjusted at any time during the Fiscal Year. Discussion ensued regarding time constraints and consultant penalties. MOTION: Member Hollander made a motion to recommend to the Commission the hire of Public Resource Management Group to conduct the Water and Sewer Rate Study. Member Eisenband seconded the motion, which passed unanimously. E. Discussion of Fiscal Year Audit Chairperson Polin noted this was previously discussed. Finance Director Lalla indicated he had nothing to add regarding the Fiscal Year Audit. F. Discussion of Meeting Dates Finance Director Lalla reported the Town wished to have regularity regarding the quarterly Board Meetings, such as meetings being held on the third Thursday of the month. He asked what worked best for the Board. Member Hollander asked what was best for Finance Director Lalla in regards to the ability to present quarterly financial statements. Finance Director Lalla responded quarterly financial statements would be sent to Board Member with or without a meeting. Discussion ensued regarding meeting immediately following receipt of financial statements being of highest benefit, financial statements being available roughly three weeks after the end of each quarter, holding the meetings at the end of the third week, holding meetings quarterly and as needed, and late afternoon meetings. MOTION: Member Hollander made a motion to meet on the fourth Thursday of January, April, July, and October at 3:00 p.m., and as needed. Member Hillman seconded the motion, which passed unanimously. G. Discussion of Insurance Review (THIS ITEM WAS ADDED TO THE AGENDA) Member Hollander stated Chairperson Polin had asked for a review of the other insurance policies used by the Town and indicated he agreed this should be done. Chairperson Polin asked Greg Waltz of Waltz Insurance, Deerfield Beach, to make a presentation prior to voting for the motion. Financial Advisory Board Regular Minutes Wednesday May 22 2019 Palle 8 of 9 Mr. Greg Waltz President of Mack, Mack, and Waltz Insurance Company reported he had been working in insurance since 1979, and purchased his first property in the Town of Highland Beach in 1979 at the Ambassador's East Condominium Association. He gave a brief history of his Company. He noted if hired to do an insurance review he would visit every location owned by Highland Beach with a loss control representative and insurance company prior to a quote. He mentioned an active "hot product" was the Active Shooter Policy which covered damages/liabilities caused by an active (gun) shooter in a public venue. He noted media liability and content was available for the public television channel, as well as cyber liability for personal information breaches. He commented that Marc Rheingold has written all of the benefits insurance for Mark, Mark and Waltz's clients and the firm's employees for the last 20 years. Discussion ensued regarding the motion. MOTION: Member Hollander made a motion to ask Town Manager Labadie and Finance Director Lalla to review the PNC liability. and other insurances to understand what the Town currently had in comparison to other municipalities in the area for future meaningful discussion. Member Karabec seconded the motion, which passed unanimously. H. Review Bank Relationships (THIS ITEM WAS ADDED TO THE AGENDA) Chairperson Polin noted this was discussed earlier in the meeting; there was nothing more to add. 9. BOARD MEMBERS REPORT Member Hollander thanked Greg Babij for his leadership. He welcomed Alan Polin as the new Chairperson. He stated he was pleased the Town rejected the Referendums as this allowed the Town to complete the five-year and long-term plans which were needed. 10. ANNOUNCEMENTS Town Clerk Lanelda Gaskins made the following announcements: Town Hall Closed for Memorial Day — May 27, 2019 Town Commission Workshop Meeting — May 28, 2019, 1:30 PM Town Commission Regular Meeting — June 4, 2019, 1:30 PM Planning Board Meeting — June 12, 2019, 9:30 AM National Resource Preservation Advisory Board Meeting — June 13, 2019, 9:30 AM Financial Advisory Board Regular Minutes Wednesday, May 22, 2019 Pape 9 of 9 11. ADJOURNMENT There being no further business to come before the Board, Chairperson Poli n called for a motion to adjourn. MOTION: Member Hollander moved to adjourn the meeting at 4:47 PM. Vice Chairperson Stern seconded the motion, which passed unanimously. APPROVED at the July 11, 2019, Regular Meeting. :>- - --! $44 David Stern, Vice Chairperson Beverly Wright,' Deputy Town Clerk Transcribed by: TEI/he K Date G V. ATT*1 i� v t,,, Beverly Wright,' Deputy Town Clerk Transcribed by: TEI/he K Date