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HomeMy WebLinkAbout1988-08-30 - City Commission Workshop Meeting Minutesti of rgM99 7525 NORTHWEST 88TH AVENUE 0 TAMARAC, FLORIDA 33321-2401 TELEPHONE (305) 722-5900 August 25, 1988 NOTICE OF CITY COUNCIL WORKSHOP MEETING There will be a Workshop Meeting of the City Council on Tuesday, August 30, 1988 at 10:45 a.m. or immediately following the City Council Meeting scheduled for 10:00 a.m., in Conference Room #1 (Room 103), City Hall, 7525 N.W. 88th Avenue, Tamarac, Florida. The purpose of this meeting is to review the Utilities budget, Utility rates and other related budgetary matters for Fiscal Year 1988/89. All meetings are open to the public. • Carol A. Evans City Clerk CAE/nr AN EQUAL OPPORTUNITY EMPLOYER POLICY OF NONDISCRIMINATION ON THE BASIS OF HANDICAPPED STATUS CITY OF TAMARAC CITY COUNCIL BUDGET WORKSHOP MEETING TUESDAY, AUGUST 30, 1988 TAPE 1 CALL TO ORDER: Mayor Abramowitz called this meeting to Order on uesday, August 30, 1988 at 11:00 A.M. in Conference Room #1 (City erk's Office). PRESENT: Mayor Norman Abramowitz Vice Mayor ,lack Stelzer Councilman Dr. H. Larry Bender Councilman Bruce Hoffman Councilman Henry Rohr ALSO PRESENT John P. Kelly, City Manager Ken Burroughs, Finance Director Pauline Walaszek, Special Services Secretary UTILITIES BUDGET City Manager Kelly said the primary purpose of this meeting was to discuss the disposition of the surplus funds in the TUW Account. He said the City Council received recommendations from the Finance Director and the Director of Utilities Engineering regarding the recommended options for the surplus. He said he would recommend that some type of surplus be maintained and he was opposed to reductions in the Debt Service because of the fluctuation of rates this would cause. He said the rates for water and sewer presently being charged should be addressed. C/M Hoffman said asked if the Debt Service was a rate marked "Debt Service" and City Manager Kelly said the Debt Service was a source of revenue. C/M Hoffman said the Debt. Service was placed in the General income of the Utilities Department for expenses and City Manager Kelly agreed. C/M Hoffman said he was concerned with how 1.5 million dollars could be accumulated as surplus in 1-1/2 years without over charging the residents. He said if the City was overcharging, it should be stopped; however, if the City was not overcharging an explanation of how the surplus was being accumulated was needed. C/M Hoffman said before he could recommend how the surplus should be used, he would like to receive an explanation. He said the City Council has been informed for several years that certain rates had to be charged in order to comply with the City's needs. He said the City Council has approved the rate structures recommended by the Utilities Department. C/M Hoffman said in 1985, the rates were increased from 30% to 50%; however, he was not a Councilmember at this time and he could not say why this occurred. He said he would like an explanation of why the rates were increased and if the rates may have been increased too much. Page 1 8/30/88 - Workshop Bob Foy, Director of Utilities/Engineering, said in Fiscal Year 1985/86, the rates were increased because of a rate study. He said the rates were changed from $.60 to $.80 per thousand gallons of water. He said the service availability remained the same which was $4.65 and has remained at this cost since 1982. He said the sewer rate was increased from $.70 to $1.50 and the service availability was reduced from $6.20 to $4.90. He said the rate change adjusted the single family bills from $18.35 to $22.82, which was an increase of approximately 25%. He said it had been anticipated that there would be capital replacements completed by the Utilities Department and, after reviewing the study, he found that there were approximately 1.5 million dollars in capital improvements budgeted for Fiscal Year 1985/86. He said he determined that the rate increase generated revenue of approximately $850,000.00. Mr. Foy said for Fiscal Year 1986/87, the Utilities Department without a rate study, increased the water rates from $.80 to $1.04 and the service availability remained the same. He said the sewer rates were increased from $1.50 to $1.61 and the service availability was increased from $4.90 to $5.70. He said at this time, the Debt Service of $4.15 was instituted for sewers. He said he figured that the revenue increased to 1.4 million dollars and the increase in the rates was required because this was the first year the City had to begin paying for the Sewer Bond. He said the payment of the Sewer Bond was l.2 million dollars and he could not find information regarding where the remaining $200,000.00 was applied. Mr. Foy said he wanted the City Council to be aware that the rates were increased during Fiscal Year 1985/86 because of the Montgomery Study which included some 41 capital improvements. He said in reviewing this matter a surplus of $300,000.00 was present over the capital improvements. He said the second rate increase occurred because of the Sewer Bonds. C/M Rohr said the accumulation of surplus presently was created because of an under estimated revenue and expenditures for capital projects. He asked if the increase in rates were established for anticipated capital improvements. Mr. Foy said certain projects were budgeted each year from the list of projects he presented to the City Council. C/M Rohr said he was concerned with a reduction in rates that would use all of the surplus resulting in the City having to raise the rates again. He said this was not a good business practice and, if the City Council could be assured that some of the surplus could be used to reduce the rates without affecting the City or the Department in the future, he would agreed to a reduction in rates. V/M Stelzer said he has disagreed with the former Director of Utilities/Engineering for several years. He said he felt that the Utilities Department has been receiving too much money because of his review of the rate structures in the previous years. V/M Stelzer said in 1985, $207,000.00 was received from the operating income and expenses and $23,000.00 was eliminated because of the ESM matter which resulted in a surplus of $1,000,000.00. Page 2 8/30/88 - Workshop V/M Stelzer said in 1986, the rates and the income increased from $4,700,000.00 to $5,900,000.00. He said the operating income increased from $207,000.00 to $1,209,000.00. V/M Stelzer said during 1986 and 1987 the revenue increased from $5,900,000.00 to $8,135,000.00. He said the operating income less expenses increased from $1,209,000.00 to 12,150,000.00. V/M Stelzer said he informed the previous Director of Utilities/Engineering, Bill Greenwood, that the surplus being accumulated was not correct. He said regardless what questions were asked of Mr. Greenwood, he could not receive appropriate answers. He said after Mr. Greenwood resigned, Mr. Foy and Mr. Burroughs analyzed the Accounts and found that there would be a profit at the end of Fiscal Year 1987/88. V/M Stelzer said he felt the figures were over estimated; however, the Finance Director felt the figures were correct. He said he would rather consider the figures as being over estimated and make reductions in certain areas. He said he would suggest the City use the recommendations of reducing the water and sewer rates and leave the Debt Service as it is. V/M Stelzer said the City Council may not be aware that the homeowners paid $4.15 for Debt Service and the Hospital was paying over $1,000.00 per month for the Debt Service. He said he would like to use one half of a million dollars of the surplus to handle the capital improvements ignored in the City for several years. He 10 said if the Finance Director was correct in the figures and, there would be an additional $500,000.00 in surplus, it could be used next year for capital improvements. V/M Stelzer said the current Budget allotted for $1,000,000.00 for capital improvements and, in the previous years, capital projects have been included with the rate structure. He suggested that $250,000.00 be used for a reduction in the rates for water and sewer. He said the City was using an increased water pressure which resulted in more water use than ordinary. He said Mr. Foy recently reduced the pressure by 15 pounds. Mr. Foy said when more water was needed, an additional pump was turned on; however, there were very few complaints recently regarding the water pressure. V/M Stelzer said the only complaints the Utilities Department should be receiving are the higher charges for the water because of the pressure. He said the residents using sprinklers had a tremendous spray of water resulting in more water being used. He said providing the City and the Utilities Department did not suffer in the future, the residents would be happy with their rates being reduced. C/M Bender said one of the items he has been working on for several months was the rate structure for water and sewer. He said he began his study with the City Code to see what was required by the City. He said Section 27-36.1, Rate and Charges, stated that a review would be made annually to determine the necessary or advisable revisions of rates and charges. He said he reviewed the Department's previous 5 years and he could not find any data regarding the rate structure; therefore, he Page 3 / J 8/30/88 - Workshop investigated why there were no fluctuations in the rates with the exception of September 16, 1986, when the rates were increased by 20%. He said he could not find justification for the rates being increased at that time. C/M Bender said in previous years there were more charges and now the City was using the 201 Program and the wastewater plants have been eliminated. He asked if the elimination of the wastewater plant should result in a decrease for sewer rates. C/M Bender said he was frustrated because he could not get supporting data regarding these rates. He said he could not make logical and reasonable conclusions without further data and explanations. V/M Stelzer said the City was supposed to set the rate structure every year by an Engineer; however, the rate structure used every year was supplied by Mr. Greenwood. He said the City would have to inquire how the rates were calculated through Mr. Greenwood. Mayor Abramowitz said the record should indicate that he was not an Engineer or Scientist; however, as a businessman, he was puzzled. He said at this time, he did not understand certain matters regarding the surplus; therefore, he would not cast his vote until he received further information. Mayor Abramowitz said at the Town Hall Meeting, the City was unaware that the installation of a second meter for water cost the resident approximately $1,500.00. He said the City Council inquired about this matter and found that cost was too high. He said the Utilities Department has been a kingdom unto themselves and he will not determine who, where, what or when but, this excess surplus should not be allowed to continue. He said he would like to know why there was a surplus over and above the City's needs. Mayor Abramowitz said he understands that the Budget could not be estimated exactly and, there may never be enough money to do the capital improvements needed in the Utilities Department; however, there are other considerations. He said the City Council had concerns with the surplus being accumulated this year and he did not want millions of dollars waiting to be used. He said he has received several complaints regarding the tremendous charge in water and sewer rates since he became Mayor. He said he is shocked that these matters have been allowed to continue for so many years. Mayor Abramowitz said he can not blame any specific person or object because he did not know the reasons. He said he can see that these matters were held in a very clenched fist and rightly so. He said he had the utmost confidence in staff and when he asked a question and received an answer, he had to assume that the answer was correct. He said he wanted to receive further information regarding the actual figures for the rates, surplus and capital improvements. He said he does not want the City to continue operating as it has in the past if it was not appropriate. Mayor Abramowitz said if he were asked to vote on this matter, he could not cast his vote because he was not comfortable with his knowledge on the matter. Page 4 61 44 8/30/88 - Workshop C/M Hoffman asked when Mr. Burroughs needed the figures for the rates to complete the Budget and Mr. Burroughs said he would like the adjustments far line items in the Budget submitted no later the evening of September 1, 1988 so there was time to make adjustments for the Public Hearing scheduled for September 6, 1988. C/M Hoffman asked what would happen if the adjustments were not submitted at that time and Mr. Burroughs said there was nothing precluding the presentation of the 91 Budget as it stands because adjustments could be made thereafter. Mr. Burroughs said the revenues would be adjusted accordingly and could be made at the second Public Hearing; however, he would not appreciate the Budget being adjusted at the second Public Hearing if there were several items to be adjusted. Mr. Burroughs said the City Council could present the Budget as it stands for the first Public Hearing and make the final determination at the final Public Hearing. Mayor Abramowitz asked how this would affect the process of finalizing the Budget and Mr. Burroughs said the Utilities Billing Department would have to be informed of reducing the rates by Resolution. Mr. Foy said a Rate Resolution would be needed and could be passed at the end of September, 1988, and the Utilities Billing Department would be directed to make the necessary changes. Mayor Abramowitz said he was more interested with the City Council being provided with information they need to make the appropriate decisions. 10 Vickie Beech, Resident, asked if the Debt Service incorporated more than the Bond Referendum for the 201 Program like the old Bond issue for the purchase and refinancing of the Sewer Plant. Mr. Burroughs said it was surprising that such an item was included in the bills. He said the Debt Service charge should be included in the availability charges; however, to his knowledge, the rates for Debt Service are determined by the amount of principal and interest due on the 1986 Bond issue which was the 201 Program. Mr. Foy said the Debt Service charge of $4.15 was calculated to take care of the 1.2 million dollar Debt Service on the 1986, Bond which was the sewer Bond only. C/M Bender asked how the $4.15 Debt Service charge was determined and Mr. Foy said the charge was determined by the Bond amount due divided by the number of equivalent units that were available in the City in 1986/87 then, divided that amount by 12 which equalled approximately $4.15. C/M Bender said there were excesses available at that time and he asked why the excesses were not deducted from the charge and Mr. Foy said he did not know if the excesses were truly available. C/M Bender said he had evidence that there were excesses available and Mayor Abramowitz said Mr. Foy was not the Director and decision maker at that time.. Page 5 i �J 8/30/88 - Workshop C/M Bender said he was only inquiring about this matter and submitting it to Mr. Foy for investigation. C/M Bender said the Bond issue charge was figured in 1985 and there have been three years since where the number of residents has increased. He asked why the charge has not been recalculated to reduce the Debt Service charge. Mayor Abramowitz said the City Council can be assured that the charges would be recalculated in the very near future. It Mayor Abramowitz said the City Council seemed interested in taking the excess surplus and distributing it back to the residents; however, the method to do so was in question. He said he was more interested in providing a decrease that would not fluctuate and he did not want the decrease to handicap the Department in doing what was needed to provided services to the City. He asked V/M Stelzer why he suggested the City pursue A and B of the recommendations. (SEE ATTACHMENT #1) V/M Stelzer said the recommendation was to reduce the water rate from $1.04 to $.89 which would result in a $250,000.00 reduction for the year and use the remaining money of $924,000.00 for as many capital improvements as possible without eliminating the funds. He said he felt the Finance Director's figures were higher than they should be; therefore, there should be surplus available for an adjustment, if needed. Mayor Abramowitz said capital improvements were already Budgeted and V/M Stelzer said if the rates were reduced, the needed capital improvements would have to be reviewed. Mayor Abramowitz asked if the Debt Service should be 41 reduced and V/M Stelzer replied, no. V/M Stelzer said only the rates for water and sewer should be reduced. C/M Rohr asked if there would be a difference and V/M Stelzer said the difference would be that the Debt Service may have to fluctuate from year to year. V/M Stelzer said Mr. Burroughs indicated that there would be $924,000.00 available in surplus if the rate reduction was implemented. He said a portion of the $924,000.00 should be included for capital improvements. Mayor Abramowitz asked what would happen if the City decided to use $1,000,000.00 of the surplus to reduce the rates and V/M Stelzer said he would not approve of this because there may have been a mistake in estimating. Mayor Abramowitz said if possible, he would like to reduce the rates with more than one half of a million dollars of the surplus. V/M Stelzer said Mr. Foy indicated that if $1,000,000.00 of the surplus was used to reduce the rates, the rates would have to be increased by Fiscal Year 1989/90 to make up for one half of a million dollars and then, do the same in Fiscal Year 1990/91 for the same reason. Mayor Abramowitz said since last year, there was approximately 1.5 million dollars in surplus. He said if the surplus was used as a cushion and a rate reduction of $1,000,000.00 was implicated, one should wash the other. Page 6 8/30/88 -- Workshop V/M Stelzer said he was not positive that the 1.5 million dollars was correct. He said he would like to use one half of a million dollars for the rate reduction in case the figures were estimated wrong. Mayor Abramowitz asked if V/M Stelzer felt that the estimated income was incorrect and V/M Stelzer said he felt that the estimated income may be wrong. V/M Stelzer said if the figures were wrong and the City reduced the rates with $1,000,000.00 of the surplus, there would be problems in the future. C/M Hoffman suggested 3/4 of a million dollars from the surplus be used to reduce the rates and V/M Stelzer said if this was done, the rates would have to be raised too soon. Mayor Abramowitz asked if the rates would have to be increased if 3/4 of a million dollars from the surplus was used to reduce the rates and Mr. Foy said the rates would have to be raised by Fiscal Year 1990/91. C/M Rohr said there would be no surplus to use in Fiscal Year 1990/91 if the rates are reduced with 3/4 of a million dollars of the surplus. Mayor Abramowitz said if the rates could be reduced to a safe rate, the surplus would be there; however, not as much as before the rates were reduced. C/M Rohr suggested one half of a million dollars from the surplus be used to reduce the rates for this year and next year, if there was a big surplus, the rates could be reduced again. He said if the surplus was used to ID drastically reduce the rates this year, there may be problems in the coming years which would cause the rates to be increased. Mayor Abramowitz said he would like more information on this matter and the figures for the future before he made a decision. Mr. Burroughs said by his review of the figures, if a $500,000.00 rate reduction is implemented starting October 1, 1988, by 1989, there would be $924,000.00 in surplus. He said if the same rate structure was carried over to Fiscal Year 1989/90, the surplus would be reduced to $280,000.00 without an additional rate increase. Mayor Abramowitz asked what would be done with the present 1.5 million dollars in surplus and V/M Stelzer said $500,000.00 would be used for a rate reduction and the remaining would stay as surplus. Mayor Abramowitz said if the rates were reduced by $500,000.00, the income for next year would be reduced, not the present 1.5 million dollars in surplus. V/M Stelzer said the surplus would be used for capital improvements and Mayor Abramowitz said the Budget already .contained funds for capital improvements. TAPE 2 Mr. Foy said, using hypothetical numbers, there was revenue of $10,000,000.00 with expenses of $10,000,000.00 which balance and a surplus of 1.5 million dollars. He said if one half of a million dollars was taken out of the revenue by reducing the rates, after so many years, Page 7 8/30/88 -- Workshop the rates would have to be raised because the surplus was being used to accommodate the loss in revenue to pay for the expenses. Mayor Abramowitz said the present rate structure and expenditures created a surplus; however, he did not want the City to put themselves in a position where money was needed to pay for the expenses. He said the accumulation of surplus should not have occurred in such a great amount and he would be very pleased to have this matter corrected in a way that all would benefit. It C/M Bender asked if the expenditures were self-imposed or State mandated and he asked if there were any restrictions as to when the expenditures had to be completed. He said he had concerns with expenditures that could be completed in 3 years as opposed to one year. Mr. Foy said things did not happen to the Utilities Department overnight and he was not saying that if the projects were not completed, the services of the Utilities Department could not continue. He said he has seen businesses where new owners fire the personnel and sell off the assets causing the business to expire which was not going to happen to the Utilities Department as long as he was the Director. C/M Bender said he wanted to make sure that the expenditures anticipated would not place the City in a bind if accomplished sooner than needed. He said he would like more information on the expenditures and the time frame for each one. Mr. Foy said he was convinced that the projects and expenditures requested for this year were necessary. He said he submitted a wish list of projects and 44 expenditures that would have to be done in the future and the list was long and the costs were large. C/M Bender asked if the City could get Grants to offset some of the expenditures and Mr. Foy replied, no. Mr. Foy said Grants are things of the past and C/M Bender said the City Council as legislators should worry about getting Grants. C/M Bender said he would like an explanation on the projects, their costs and when and why they needed to be done. C/M Hoffman asked how much surplus was accumulated last year and Mr. Burroughs said the surplus as of October, 1987 was $425,000.00. C/M Hoffman said approximately $1,000,000.00 was accumulated last year. C/M Hoffman asked if the City would accumulate $1,000,000.00 this year if everything remained the same and Mr. Burroughs said the surplus could have been generated because the revenues to be received this year were under estimated. He said the revenues were 17--1/2% more than anticipated and C/M Hoffman said the revenues should remain the same if nothing was changed. C/M Hoffman said if the rates were reduced by $1,000,000.00, the operations versus the expenditures should break even leaving enough money to•cover the capital improvements. He said this would also allow Page 8 8/30/88 -- Workshop remaining .funds in the surplus; therefore, the City Council wanted to reduce the fees to cover the needs and avoid additional surplus. Mr. Burroughs said he did not believe that there would be a recurring surplus because the estimates are higher this year to cover the funds being used for capital expenditures. He said the revenues would not be increasing in the future. C/M Hoffman said the revenues should remain the same and Mr. Burroughs said hopefully. He said the City should be able to keep the present surplus and reduce the rates to prevent an additional surplus next year. Mr. Foy said this would not be addressing the cost needed to run the Utilities Department plus the capital improvements. He said in round numbers, last year the costs were $9,000,000.00 and this year the costs were $10,000,000.00. He said if the expenses were maintained this year as they were last year, capital improvements and other things could not be accomplished. C/M Rohr said Mr. Foy was stating that 1 million dollars for capital improvements was in the coming Budget and it was anticipated that the next Budget would contain another million dollars in capital improvements. He said it is anticipated that each year, there would be 1 million dollars in capital improvements; therefore, if the rates are reduced, revenues would have to be raised in a few years. Mayor Abramowitz asked how much was Budgeted for capital ID expenditures last year and Mr. Foy said he did not have the exact information; however, it was approximately $100,000.00. Mr. Burroughs said before the City Council reviewed last year's Budget, he, City Manager Kelly and the previous Director of Utilities/Engineering had a very difficult time because expenses had to be cut to balance the Budget. Mayor Abramowitz said he would like to avoid Budgeting for projects that could not be completed because there was no money available. He said he did not want to reduce the rates and turn around and raise them 1 to 2 years later or hurt the City by using the money that was needed for Utility services. He said if he could give back money to the residents that should not have been charged, he would be in favor of the refund; however, the City Council was surprised with the information they have recently received. Mayor Abramowitz said the City Council agreed that this matter should be corrected and he would like to see it corrected in the most prudent, sensible way. The City Council AGREED to review this matter further before coming to a decision. Mayor Abramowitz said he was not comfortable with the information; therefore, he suggested the City Council submit their questions to City Manager Kelly which can be answered at another meeting. Page 9 8/30/88 - Workshop City Manager Kelly said when he became employed with the City, there was concern about the Utilities Budget which has been on -going. He said the rates have been an issue and reviewed in an economical development perspective. He said his biggest concern was with the water and sewer rates and, if possible, he would like to see them reduced. He said he dial not want to see the surplus money eliminated which was being generated at this time because the money would be used on the capital projects that are necessary and have been identified for the coming years. He said the longer the City waits to complete the necessary capital improvements, the worse they will become. He said the City should implement a conservative reduction that would allow a sufficient working reserve for capital needs. C/M Bender said if he had the correct figures, he would be able to suggest a conservative reduction. Mayor Abramowitz said he did not want to see this happen; however, Mr. Burroughs said he would work on the Budget during the Labor Day weekend if needed. He said he would like to have his questions answered so he could cast an intelligent vote. City Manager Kelly said in regard to looking for Grants, it was staff's responsibility to get the Grants. He said City Council could suggest where the Grants could be obtained; however, they should not involve themselves in getting the Grants. At 12:05 P.M., Mayor Abramowitz RECESSED the meeting and RECONVENED at 12:20 P.M. with ALL PRESENT. INSURANCE BUDGET Larry Perretti, Personnel Director, said on August 19, 1983, he submitted new insurance rates that were quoted by telephone from the Florida League of Cities. He asked the City Council to disregard the August 19, 1988 rates because a 3% credit would be applied for this year's rates. He said quote "A" was showing $1,500,000.00 with no deductible for 1987/88 and 1988/89 General Liability and Auto Insurance and the additional cost would be $110,502.00. (SEE ATTACHMENT #2) Mr. Perretti said quote "B" was for $1,500,000.00 with a $10,000.00 deductible, the additional cost would be $3,307.00. Mr. Perretti said quote "C" was for $1,000,000.00 with no deductible, the additional cost would be $69,957.00. Mr. Ferretti said quote "D" was for $1,000,000.00 with a $10,000.00 deductible, the additional cost would be $37,238.00 less than the present cost. C/M Hoffman asked if the premiums would be reduced by over $100,000.00 with a $10,000.00 deductible and Mr. Perretti said these figures were quoted and discussed over the telephone. C/M Hoffman said this quote was questionable and Mr. Perretti said on the $10,000.00 deductible there were 5 different types of insurance using the deductible. He said the insurance was General Liability, Police Professional, Public Officials, i i Page 10. i1 44 17 8/30/88 - Workshop Emergency Medical Treatment and Auto Liability; therefore, if the $10,000.00 was utilized in each of those areas, $50,000.00 would be added which was a very substantial savings. C/M Hoffman said it did not sound right; however, if it was, he would approve of quote "B". Mayor Abramowitz said quote "D" indicated a savings of $40,500.00 per year and VIM Stelzer said there would be $100,000.00 saved in premium. Mayor Abramowitz said there was discussion regarding other Cities going bare and City Manager Kelly said those Cities discussed had a tremendous cash surplus. Mr. Perretti said C/M Rohr asked at the previous meeting for quotes on $25,000.00, $50,000.00 and $100,000.00 deductibles. He said the the only way the Florida League of Cities would operate was to go with a $10,000.00 only or a $100,000.00 access where the City would be responsible for the first $100,000.00. He said the $100,000.00 access resulted in a tremendous amount of money because of the additional personnel needed to handle the insurance. C/M Hoffman said he was in favor of quote "B" and Mayor Abramowitz said quote "D" seemed appropriate because of how the insurance awards were being granted lately. C/M Hoffman asked Mr. Burroughs what quote he would select and Mr. Burroughs said he would take quote "D". Mr. Perretti said in property and liability insurance, the companies are stating that deductibles were needed in order to prudently save money. Mayor Abramowitz asked if there was a possibility to find another insurance company that offered larger deductibles and Mr. Perretti said the City would have to go out to bid. Mr. Perretti said the City did not have the time to do that this year. Mr. Perretti said one of the quotes by the Florida League of Cities could be used this year and the City could go to bid for next year for a higher deductible. Mayor Abramowitz asked City Manager Kelly for his opinion and City Manager Kelly said he would like to compare the experience of this year. Mr. Perretti said the City did not have a million dollar expenditure for this year and Mayor Abramowitz said this was why he favored a high deductible. C/M Bender asked how much the experience dictated and Mr. Perretti said the Florida League of Cities gave him the loss experience which was 1.48 He said the experience quoted was for the years of 1984, 1985 and 1986. He said the study was always 2 years behind; therefore, the increases came about because of the exposure and the experience rating. Mr. Perretti said the City was rated at .963 which was a 3.7 credit for last year and this year the rate was 1.55. He said with the figures submitted, there was a 37% increase due to the policies. r Page 11 �l 8/30/88 - Workshop Mayor Abramowitz asked how long ago the City had a large exposure and Mr. Perretti said when the City was first created. C/M Rohr said he was concerned with the City's experience and would like to receive this information before determining if the City should take the higher deductible. C/M Bender asked how the rating was determined and Mr. Perretti said he would get this information for the City Council. Mayor Abramowitz said based on personal experience, he would prefer to pay the lower premium with a higher deductible. He asked how the City Council felt regarding the quotes. C/M Hoffman and Mayor Abramowitz said they would choose quote "D" and C/M Bender said he would choose quote "D" providing he received the additional information from Mr. Perretti. V/M Stelzer said he would choose quote "B" if the $100,000.00 premium was correct on the $10,000.00 deductible. C/M Rohr said he would choose quote "D". V/M Stelzer asked if the City would be operating without a Risk Manager. He said he was against doing this and Mayor Abramowitz said the City Council agreed to the recommendations of eliminating the position of Risk Manager. V/M Stelzer asked if City Manager Kelly would be getting the position of an Assistant to the City Manager. He said the City Manager's Budget contained $35,000.00 for the position. Mayor Abramowitz said this did not mean the position had to be filled at this time and V/M Stelzer said if the position was in the Budget, the City Manager could hire someone. Mayor Abramowitz suggested that the City Council call another Workshop to clear up all of the unanswered questions. With no further business, Mayor Abramowitz ADJOURNED this meeting at 12:35 P.M. 1<2 CAROL A. EVA S, CITY CLERK "This public document was promulgated at a cost of $126.30 or $3.51 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." 17 44 Page 12 No Text -A, 44Z 'Alp- T5