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HomeMy WebLinkAbout1991-09-03 - City Commission Special Meeting MinutesM CITY OF TAMARAC 7525 Northwest 88 Avenue Tamarac, Florida 33321-2401 RECORD OF COUNCIL DISCUSSION/ACTION September 4, 1991 NOTICE OF SPECIAL MEETING CITY COUNCIL OF TAMARAC, FLORIDA Phone (305) 722-5900 Fax (305) 722-4509 There will be a Special Meeting of the City Council on Tuesday, September 3, 1991, at 10:00 a.m, in Conference Room #1 of Tamarac City Hall, 7525 NW 88th Avenue, Tamarac, Florida. The City Council will consider the following items: 1. nTRC SSTON AND PQ5SIBLE ACTION on cost allocation plan report for the Utilities Fund. FINAL ACTION APPROVED budgeting an additional $335,000.00 General Fund Administrative jervice Charge to the Utilities West Fund enabling $215,000.00 of the ditional revenues of the General Fund to be used to maintain the current millage rate of 4.5818 mils. 2• on contracting Municipal Administrative Services (MAS) in the amount of approximately $4,500.00 to conduct a general review of the various franchises. r•INAL- AC',j!jON Agendized by Consent and APPROVED - Any member of the public may speak to any issue which is not agendized for public hearing at this meeting. Speakers will be limited to three minutes during this item and at public hearings. There will be a thirty (30) minute aggregate time limit for this item, and speakers are encouraged to sign up in advance with the City Clerk prior to their participation. All meetings are open to the public. �Carol A. Eva s City Clerk Pursuant to Section 286.0105, Florida Statutes %If. a person decides to appeal any decision made by the ty Council with respect to any matter considered at ch meeting or hearing, he will need a record of the proceedings and for such purpose, he may need to ensure that a verbatim record includes the testimony and evidence upon which the appeal is to be based THE CITY OF TAMARAC IS AN EQUAL OPPORTUNITY EMPLOYER AND DOES NOT DISCRIMINATE ON THE BASIS OF HANDICAPPED STATUS City Council Special Meeting 09/03/91/KJ Page 1 CITY OF TAMARAC CITY COUNCIL SPECIAL MEETING TUESDAY, SEPTEMBER 3, 1991 CALL_TO__ORDER: Mayor Abramowitz called this meeting to order on Tuesday, September 3, 1991 at 10:00 a.m, in the Conference Room 01 of Tamarac City Hall, 7525 Northwest 88 Avenue, Tamarac, Florida. PRESENT• Mayor Norman Abramowitz Vice Mayor Dr. Larry Bender Councilwoman Diane Glasser Councilman Henry Schumann Councilman Irving Katz ALSO PRES MKT John P. Kelly, City Manager Dina McDermott, Assistant City Manager Alan F. Ruf, City Attorney Mary Blasi, Finance Director Karen Jackson, Secretary Mayor Abramowitz announced that Mayor Weisinger's wife, Edith, passed away on Saturday and the funeral will be today at 10:30 a.m. 1. DISCYISSION AND POSSIBLE ANION on cost allocation plan report for the Utilities Fund. SYNOPSIS OF AQTION: APPROVED budgeting an additional $335,000.00 General Fund Administrative Service Charge to the Utilities West Fund enabling $215,000.00 of the additional revenues of the General Fund to be used to maintain the current millage rate of 4.5818 mils.. City Manager Kelly said this is a cost allocation plan. He said the format in the General Fund Budget in the past, the distribution of the Central Services, such as Purchasing, Fleet and others throughout the City were seen in each Department Budget. He said this year they have been placed under one item because there were a lot of disgruntled Department Heads arguing with the rationale of the formula of how it was determined the amount of money was allocated to their responsibility for Fleet. City Manager Kelly said the Community Development Department was a good example because they would have a lot of money allocated for their fleet costs. He said there is no standardized formula for the distribution of this and also looking toward the Utility end of this. He said Ms. Blasi was convinced that Utilities was not being charged their fair share. City Manager Kelly said the City has retained the firm of David M. Griffith and Associates to provide a Central Services cost allocation plan which will impact the overall budget. Mary Blasi, Finance Director, said that this is a full cost allocation study. Mayor Abramowitz asked what type of credentials does David M. Griffith and Associates have and Ms. Blasi said they specialize in doing studies on revenue impact fees cost.allocation plans for governments. She said they have done extensive work for Coral Springs, Hallandale, Sunrise, Sarasota and are located out of Tallahassee. She said Tamarac was able to get a very good rate on this study because they are currently doing a study for Hialeah. She said they have extensive software that makes them reasonable to go to because they develop software to do these studies in a quick and efficient manner. V/M Bender asked if they are an accounting firm and Ms. Blasi said, no. V/M Bender asked what type of consulting firm are they and Ms. Blasi City Council Special Meeting 09/03/91/KJ Page 2 said they handle Public Services. She said they do rate studies, impact fee studies, alternative revenue source studies and other such studies. She said Coral Springs would give them a very good reference. Ms. Blasi said that this is a full cost allocation study whereby all essential services provided by the General Fund were allocated to the different departments in the City. She said the following departments are included: City Manager, City Attorney, Finance, City Clerk, City Council, Charter Board, Personnel, City Hall Operations, General Government Buildings, General Services, Telecommunications Services, Communications Services, Public Information Board, Public Works Administration, and two others that are not departments, but need to be allocated because of their costs which are expenses of the General Fund, which are Building Use and Equipment Use. Ms. Blasi said the allocated building use was based on depreciation over the cost of City Hall over a 50 year period and the square footage of each of the departments. C/M Katz said the Council has less square footage allotted than the Building Department which occupies the entire one side of the building; however, Council was charged more. Ms. Blasi said this might be due to the amount the Building Department actually uses as a Service Department. She said the Building Department is a receiving department and receive services from City Council, Finance and do not provide service to any other department besides the outside. V/M Bender asked how the insurance was handled on this. He said the City has liability insurance on Utilities. Ms. Blasi said the insurance is accounted for in a Proprietary Internal Service Fund, not out of the General Fund. She said the Finance Department would have to change the Internal Service Budget to include chargebacks to the General Fund. V/M Bender said the City has an Administration handling the insurance responsibility for the City. He said a good portion of this has to do with the Public Works and Utilities Departments. Ms. Blasi said the Insurance Department takes up space and should be charged from the General Fund to the Internal Service Fund and reduce the General Fund's liability to pay its service fees every year and it would probably increase Utilities West. Mayor Abramowitz said the next budgetary period should have a full internal audit. Ms. Blasi said all of the Internal Service Funds are currently being charged and are being subsidized by the General Fund and the Utilities West Fund. She said this is based upon the number of vehicles for Fleet Maintenance, the number of employees for Insurance due to Worker's Compensation. However, it does not take into consideration the services that the General Fund provides the Insurance Fund, such as the use of the offices, telephones and other similar items. She said consideration needs to be given to reimburse the General Fund for providing these services and not charge them back quite so much. Mayor Abramowitz said this can only be done on a revenue producing area. C/M Katz said he feels this is a system that should be used. He said the City has revenue producing departments which do not charge anywhere near the cost of maintaining that',department. He said if the City has to evaluate what the costs are and if the City has a Permit Department that is being subsidized by half of the ad valorem taxes, then it is not beneficial to the City. He said if all of the indirect costs are calculated for a particular department which is not an adequate amount of revenue to maintain that department, everything should be charged to a particular department. Ms. Blasi said David M. Griffith and Associates will do a revenue study. She said they did the allocations based on two steps. She said they took City Council Special Meeting 09/03/91/KJ Page 3 the total budget of the department and added to that the first allocation of what they believed were expenditures from the Central Services Departments to the different departments. She said a second allocation were costs from the Central Services made subsequent to the Department's allocation. She said they came to the total cost allocated to each of those departments and if those departments were Service Departments, those costs were allocated to the different departments that use them. Mayor Abramowitz asked if their figures were reasonable and Ms. Blasi said, yes. C/M Katz asked how this gets closed out when the City is operating on the 1990/1991 budget and Ms. Blasi said they use the budgeted figures, not actual. Assistant City Manager McDermott said after the second allocation of each service department, that department was closed and could not receive additional allocations. C/M Katz said they are not allotting any more expenses to that department. Mayor Abramowitz said the study will be done well in advance for next year's budget process. C/M Katz asked the cost of this study and Ms. Blasi said $9,800. City Manager Kelly said when he came to the City, the chargeback to Utilities West was $250,000. He said Ms. Blasi feels it should be higher. Ms. Blasi said when she first looked at this study, it showed that the Council, was allocated $619,000, but it was because all of the departments in the City work for Council. FINANCE (Page 41) Ms. Blasi said there is a brief explanation of what each department did and how they allocated for each function of the department. She read from Schedule 6.01 regarding the Finance Department. She said seven separate functions have been identified and allocated as follows: the budget, an allocation basis with the number of purchase order requisitions, payroll with the number of employee positions, general accounting with the number of purchase order requisitions, fixed assets with the number of assets, collections with the percentage of Staff effort, accounts payable with the number of check transactions, annual audit with the number of employee positions. Ms. Blasi said the Utility Department was excluded from the audit because they pay their proportionate fee for the annual audit which is split between Utilities West and the General Fund. Mayor Abramowitz said every check that is written for the City comes from the Finance Department which requires work and supplies. He asked if there are allocations made based on the checks written for the City Council, Personnel and other departments. Ms. Blasi referred to Page 42, which is the cost to be allocated. She said the Finance Department budget'for this year is $659,000. She said David M. Griffith and Associates has deducted Capital Outlay because it is not an operating expense, which will be used later in terms of depreciation of equipment and the building. She said the Finance Department's charges are as follows: for building use, based on a first and second allocation, was $25,000 for one year, equipment use is $4,500, City Attorney, based upon the amount of time the City Attorney's office helps the Finance Department with financial issues, is $5,100. She said the City Manager is $17,000, City Clerk is $9,500, Personnel is $14,000, City Hall Operations is $30,600, General Services is $3,300, Telecommunications is $10,000, City Council is $26,500, Charter Board is $962 and Public Information Board is $578 for a total additional allocated costs of $148,000, which is a total cost of $797,000. City Council Special Meeting 09/03/91/KJ Page 4 Ms. Blasi said the Finance Department is a Central Services Department to provide services to other divisions in the City. She said all costs of the Finance Department Budget were broken down into these areas. She said Page 45 shows where they charged back the Finance Department to each of the departments that utilize its services and are broken down to allocation use. Assistant City Manager McDermott said each division of the Department is allocated a dollar amount. She said it costs a lot more money to operate. Mayor Abramowitz questioned the City Council budget and Ms. Blasi said Council needs the services of the City Manager, City Attorney and the City Clerk to do their job to the best of their ability and that is what they are allocating to Council. Mayor Abramowitz asked what would happen if a Department Head came to the City Manager and stated that they wanted less space because of the costs in the budget. C/W Glasser said if there is a further breakdown of the budget and go to each individual that works in the City, then it would be found that they have a bigger budget than what they are actually making. She said the cost of the building must be allocated to the departments. Ms. Blasi said the consultants allocated the total costs to each individual department. C/M Katz said if he wanted to speak with Ms. Blasi regarding purchase orders, there is no way that she is allocating her time, but by purchase order. Ms. Blasi said the only way was to do a complete time study of what everyone did and maintain time sheets; however, it would not be cost effective. V/M Bender said the consultants utilizing this system have been doing this for a while and Ms. Blasi agreed and said it is an accepted way of measurement. C/M Katz said he feels the City's cost to Utilities West is even greater than what this study shows and Ms. Blasi said it could be greater. V/M Bender asked if $700,000, as an estimate, would have an impact on causing Utility rates to go up and Ms. Blasi said not in the next Fiscal Year and possibly not in the following year. City Manager Kelly said there would be that possibility in the next two years. V/M Bender said he wants it clearly understood that this is done on a basis of the fact that the City was subsidizing the Utilities. He said what is being done now is the City is being reimbursed for the work, time and money spent by the City. TAPE 2 Ms. Blasi said there is a significant increase in the amount required for the budget next year. Mayor Abramowitz said the City will be faced with the Storm Water Drain Act in the near future. Ms. Blasi said there should be no rate increase for next year. Mayor Abramowitz asked how much money is involved and Ms. Blasi said $685,000. Mayor Abramowitz said the City charged Utilities $350,000 originally and the City can charge Utilities West more money than what was charged. Mayor Abramowitz asked if this would have an effect on the tax structure and City Manager Kelly said that would give the City the opportunity to have no increase in the millage rate without impacting Utilities at all. City Council Special Meeting 09/03/91/KJ Page 5 C/M Schumann asked if $350,000 has already been taken from Utilities West and Ms. Blasi said it is budgeted. C/M Schumann asked if there is $335,000 additional money to utilize as a result of this allocation study and City Manager Kelly agreed. Mayor Abramowitz asked what it would take to make no tax increase and City Manager Kelly said approximately $215,000 to balance the budget. C/M Katz suggested the money be utilized to balance the budget. City Manager Kelly said it would take $215,000 of this money to balance the budget and to provide for no change in the tax rate. He said the millage rate would remain the same at 4.5818. C/M Katz said that would eliminate the 3.5% mils. Ms. Blasi said there would be a slight increase over the rolled back rate and it would have to be'announced in the Public Hearing as .9%, but there would be no increase in the current millage rate. C/W Glasser asked if the assessed valuation in the City has remained the same and City Manager Kelly said there has been a slight increase. C/M Schumann asked if $67,000 reduces 1% and City Manager Kelly said it reduces one mil. Ms. Blasi said it is 1% over the current rate. City Manager Kelly said there was a 3.9% increase over the current rate which is approximately $215,000. V/M Bender asked what percentage it would equate to if the budget is to be reduced by $215,000 and City Manager Kelly said it would be 3.5%. V/M Bender asked what percentage of mils would 3.5% equate to and City Manager Kelly said 4.7419 mils. He said if you take the current millage rate of 4.5818 and add the 3.49% to that, it equals 4.7419 mils. City Manager Kelly said Staff feels that the $215,000 will bring it down to no tax increase and no change in the millage rate over this year. He said he feels comfortable with this amount. C/W Glasser said the City Manager felt comfortable throughout the budget process before this money was available. She asked why the City is putting another $120,000 in there. She asked why the City is not reducing the taxes any further. Ms. Blasi said she would not feel comfortable reducing it any further based on the State shared revenues coming in the way they are and with the economy outlook unpredictable. She said even with not decreasing, the City will need $677,000 from the Fund Balance to balance the budget. She said it is being estimated $461,000 to be used this year. C/W Glasser said these figures existed before this $335,000 was discussed. Mayor Abramowitz said he feels this situation is good and it is one of the rare times that Tamarac has been able to do this. He said he does not like the idea of taking all of the money without leaving some for reserve. C/M Katz said the $215,000 is going to bring the City even and there is an additional reserve of $130,000. C/W Glasser said there is more money that can be uncovered. Mayor Abramowitz said he has seen where half a million dollars was not enough to pay the bills. C/M Katz said asked if the City has 5% Contingency in reserve and Ms. Blasi said there is $350,000 in Contingency, which would be approximately 5% with the $120,000. Mayor Abramowitz said Council put in a budget of 15% escalation in the health insurance rates. He said there have been escalations of 25% and higher. City Council Special Meeting 09/03/91/KJ Page 6 Assistant City Manager McDermott said the Bid Opening is going to be held this Friday for the health insurance. Mayor Abramowitz said the City went into self insurance and saved a tremendous amount of money in the past couple of years. Assistant City Manager McDermott said the self insurance program covers general liability. She said the City's health program is completely separate from the self insurance. Mayor Abramowitz RECESSED and RECONVENED this meeting at 11:15 a.m. with ALL PRESENT. C/M Schumann asked what the $677,000 does and Ms. Blasi said that is how much of a carryforward that the City is going to use to balance the budget. C/M Schumann asked what millage rate does this balance at and Ms. Blasi said the current millage rate of 4.5818. C/M Schumann asked if $211,000 from the Utilities West Fund would drop the millage rate by 3%. Ms. Blasi said the City needs approximately $215,000 out of the $335,000 to keep it at the original rate of 4.5818. City Attorney Ruf said the $677,000 brought it down to where there would only be a 3.5% increase, so if Council would want to reduce the 3.5% increase, then the $677,000 would have to be increased. Ms. Blasi said she has rerun the revenue sheet keeping the millage rate at the current 4.5818, and by doing so, the City would need to balance the budget, $677,000 from resources available. She said if the City wer to decrease the millage rate.even further, the City would need additional .revenues from resources available. She said the Administrative charges have been increased to where it would be $685,000. She said she has taken that additional $335,000, placed it into Administrative Revenue, decreased the current ad valorem taxes by the amount to bring it to the current millage rate and decreased the usage of resources available. Mayor Abramowitz said if Council decided that they wanted no increase in the millage rate and they wanted to take the amount of money needed to accomplish no increase in the millage rate, the City would have unused money in the amount of $120,000 and Ms. Blasi agreed. Ms. Blasi said before the study was done and additional revenue came in and the millage rate was reduced to the current rate, the City would have to use more of resources available by that amount. C/W Glasser said she is uncomfortable with taking the $120,000. Mayor Abramowitz said this meeting will be continued immediately after the Executive Session regarding labor negotiations. He RECONVENED this meeting at 12:00 p.m. with ALL PRESENT. Mayor Abramowitz PASSED the gavel to V/M Bender. Mayor Abramowitz MOVED that Council take the amount of money needed out of the allocation fund to prevent any increase in the millage rate, SECONDED by V/M Bender provided Council has an opportunity to further examine the balance of the fund for possible changes. VOTE: ALL VOTED AYE City Council Special Meeting 09/03/91/KJ Page 7 2. DISCUSSION AND POSSIBLE ACTION on contracting Municipal Administrative Services (MAS) in the amount of approximately $4,500.00 to conduct a general review of the various franchises. FINAL ACTION: Agendized by Consent and APPROVED City Manager Kelly said Municipal Administrative Services (MAS) is the management consultant from Texas who was contacted regarding their review and what their $3,100 fee included. He said the $3,100 would be for the review plus expenses. He said their expenses would be not to exceed $1,200 which accounts for air fare, a car and hotel. He said the total would be approximately $4,500. V/M Bender said he had originally suggested taking the $4,500 out of the $18,000 received back. Assistant City Manager McDermott said this would be a general review of FP&L, Southern Bell, Waste Management, Continental Cable and other such franchises. City Manager Kelly said it is a general review and then they will provide the City with a full report at a later date. C/M Katz asked if they are going to make recommendations as to what should be added and Mayor Abramowitz said, no. City Manager Kelly said they will give a general overview as to what franchises the City should focus on. V/M Bender MOVED to APPROVE this contract, SECONDED by C/M Schumann. VOTE: ALL VOTED AYE With no further business, Mayor Abramowitz ADJOURNED this meeting at 12:10 p.m. ;1 N RMAN ABRAMOWITZ- MAYOR CAROL A. EVANS - CITY CLERK - "This public document was promulgated at a cost of $120.86 or $2.69 per copy to inform the general public, public officers and employees of recent opinions and considerations of the City Council of the City of Tamarac." (ITY OF TA 2;A1aAC ri'ita 'V1"w i*J r�JLETir�zl-�,eo - � 1 '2 14csx/ City Clergy