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HomeMy WebLinkAbout1988-08-16 - City Commission Budget Workshop Meeting Minutes.. aF rgM's 9 U p 7525 NORTHWEST 88TH AVENUE 0 TAMARAC, FLORIDA 33321-2401 TELEPHONE (305) 722-5900 August 12, 1988 NOTICE OF CITY COUNCIL BUDGET WORKSHOP MEETING There will be a City Council Budget Workshop Meeting at approximately 11:00 a.m. (after Joint Workshop Meeting of City Council and Charter Board) on Tuesday, August 16, 1988 in Conference Room #1 (City Clerk's Office) at City Hall, 7525 N.W. 88th Avenue, Tamarac, Florida to review the following budgets: 1. Insurance 2. Revenues CEB/nr 10 Carol E. Barbuto City Clerk AN EQUAL OPPORTUNITY EMPLOYER POLICY OF NONDISCRIMINATION ON THE BASIS OF HANDICAPPED STATUS 1 1 1 CITY OF TAMARAC CITY COUNCIL BUDGET WORKSHOP MEETING TUESDAY, AUGUST 16, 1988 TAPE 1 CALL TO ORDER : Mayor Abramowitz called this meeting to Order on Tuesday, August 16, 1988 at 11:00 A.M. in Conference Room #1 (City Clerk's Office). Mayor Norman Abramowitz Vice Mayor Jack Stelzer Councilman Dr. H. Larry Bender Councilman Bruce Hoffman Councilman Henry Rohr aU John P. Kelly, City Manager Ken Burroughs, Finance Director Larry Ferretti, Personnel Director Pauline Walaszek, Special Services Secretary INSURANCE BUDGET City Manager Kelly said this meeting was for discussion regarding the Insurance and Revenue Budgets. Larry Perretti, Personnel Director, submitted a copy of the break -down of the liability insurances. He said the copy indicated the type of coverage, amount of insurance, deductible, expiration date and annual cost. Mr. Perretti said he was recently talking to the Florida League of Cities regarding the availability of the new rates. He said since Tamarac was requesting the new rates, they would be submitting them within the next two days. He said the Florida League of Cities would be indicating a $10,000.00 deductible in each of the 5 areas indicating a -0- deduction. Mayor Abramowitz asked if the City went out to bid on these premiums and Mr. Perretti replied, yes; however, Florida League of Cities was the best bid and submitted the best consolidated package. He said because of the consolidated package, the premiums were lower. C/M Rohr asked if the City could get a greater deductible because the City would always find the money needed for the deductible if something should happen. Mr. Perretti said he could get the rates for any deductible the City Council wanted. The City Council AGREED to get the rates on $10,000.00, $25,000.00 and $50,000.00 deductibles. V/M Stelzer asked why there was more allocated in the Budget than on the information distributed. C/M Hoffman said the entire Budget would have to be reconsidered after the deductible rates are received. C/M Rohr suggested that each category list the City's 3 year experience on the insurance. The City Council AGREED with this suggestion. Page 1 J 8/16/88 - Workshop V/M Stelzer said Mr. Ferretti stated that it would cost approximately 3/4 of million dollars for the three Health Insurance Plans. He said all he calculated in the Budget was $690,000.00 for Health Insurance, which did not include Tamarac Utilities West. He asked if $75,000.00 was in Tamarac Utilities West's Budget. Ken Burroughs, Finance Director, said Tamarac Utilities West had approximately 80 employees at $17,000.00 per employee. V/M Stelzer had concerns with the Budget containing enough money for Health Insurance and Mr. Burroughs said the insurance matter has been in the air for several months. He said he would investigate this matter to see if something was missed. V/M Stelzer asked if the Union negotiations were included and Mr. Perretti said the Unions were in negotiation at this time. Mayor Abramowitz said there should be a Contingency Fund for the Union negotiations. Mr. Burroughs said this matter was discussed during the first meeting before the millage rate was set. He said he kept indicating that there was nothing in the Budget for the Union negotiations. V/M Stelzer said this was why he was concerned with eliminating Judy Deutsch's position. He said the City Council was asking Mr. Perretti about matters that are Insurance related and the questions could not be answered. Mayor Abramowitz said Judy Deutsch may have given the City Council the answers on the copy distributed by Mr. Perretti and V/M Stelzer said Judy Deutsch did give the answers to copy; however, who would give the City the answers when her position is eliminated. V/M Stelzer asked if the policies expiring September 30, 1988 are going to be renewed. He asked if there was any information available for the renewal of these policies. Mr. Ferretti said this information would be available in two days and V/M Stelzer said this matter should not be discussed any further until the information was received. Mr. Burroughs said the first Budget Hearing was scheduled for September 6, 1988 at 7:00 P.M.; therefore, the City Council had to make a decision on expenses so that the Budget could be prepared for the Hearing. City Manager Kelly said the best premium Margate could get on their Public Officials Liability Insurance was $55,000.00 with a $30,000.00 deductible. He said Margate stated that Tamarac's premium was very good to maintain. C/M Bender suggested the difference of the cost between 1 million dollars and 1-1/2 million be investigated and Mr. Perretti said he would submit this information to the City Council. V/M Stelzer said he would rather pay for the insurance and be covered than have nothing to fall back on and Mayor Abramowitz agreed. Page 2 8/16/88 - Workshop Mr. Perretti said he would be submitting the following information to the City Council; - Deductibles for $10,000.00, $25,000.00 and $50,000.00 -- Amount of insurance for these deductibles for 1 million dollars versus 1-1/2 million dollars - 3 years previous experience for the 5 categories At 11.10 A.M., Larry Perretti WITHDREW from the meeting. -------------------------------------------------------------- RMNUE BUDGET Mayor Abramowitz asked if this Budget indicated monies from the annexation and City Manager Kelly replied, no. Mr. Burroughs said he computed the franchise tax with the annexation. Referring to B-1, Current Property Taxes, Mr. Burroughs said $3,574,554.00 was the assessed valuation as certified by the Property Appraiser times the proposed millage that was sent to the Broward County Appraiser's Office, which was 3.3598%. C/M Rohr asked if the millage rate would be decreasing because of the 6% Utility Tax and Mr. Burroughs said this had not been computed; however, it could be. He suggested the City Council review the Revenue Budget and make decisions regarding the expenditures and address the millage rate later. C/M Rohr asked what the millage rate for Fiscal Year 1987/88 was and City Manager Kelly said 3.03%. Mr. Burroughs said the millage rate was being raised 32%. Mayor Abramowitz said the City Council should review the Revenue Budget and leave the millage rate discussion for last. C/M Hoffman said a Contingency fund may be added for the Utility Tax. Mayor Abramowitz said the only way that could be changed in this Budget was the proposed Utility Tax and V/M Stelzer suggested each item be discussed. Mr. Burroughs said the Utility Tax in the Budget was based on 5% at 2/3 of a year or 8 months. C/M Hoffman asked if this figure would double with a 1% increase and Mr. Burroughs said no. C/M Hoffman asked if the 6% Utility Tax would be the same amount of the Franchise Tax, which was 6%. Mr. Burroughs said the Utility Tax was figured for 8 months and C/M Hoffman said the Utility Tax would be for 10 months. Mr. Burroughs said this matter needed to be discussed. The City Council said this matter should not be discussed, the Utility Tax should be allocated for 10 months. City Manager Kelly said the City Attorney would be submitting an Ordinance on first reading at the August 24, 1988 City Council meeting. Mr. Burroughs said he would have to discuss the effective date of the Ordinance with the City Attorney. City Manager Kelly said the effective date would be for Page 3 J 8/16/88 - Workshop October 1, 1988 and Mr. Burroughs said the City would only be receiving 10 months of revenue for the Utility Tax. He said the revenue should be approximately $100,000.00 per each month. C/M Hoffman asked if the Utility Companies were notified of this tax and Mr. Burroughs said the City Attorney was sending a copy of the Ordinance to Florida Power and Light and Southern Bell. C/M Hoffman asked if the small Utility Companies were notified and City Manager Kelly replied, no. Mayor Abramowitz suggested that the other Utility Companies be notified as quickly as possible because the City was losing revenue. V/M Stelzer had concerns with the Burglar Alarm Revenue and City Manager Kelly said the Ordinance for the Burglar Alarms would be submitted to the City Council at the first September meeting. Mayor Abramowitz said the City of Lauderhill implemented a $10.00 surcharge for Occupational Licenses to be used strictly for the protection of the business community. He asked if this type of program in Tamarac would be beneficial and City Manager Kelly said the revenue would not be that much. Mr. Burroughs said the figure of $330,000.00 included an increase in the Occupational License fee; therefore, this had to be implemented as well. City Manager Kelly said the Ordinance for this increase would be submitted to the City Council for approval in September. Mayor Abramowitz suggested that the Utility Companies be notified by telephone regarding the increase. Mayor Abramowitz asked if the Building Permit revenues were realistic and Mr. Burroughs said the Chief Building Official submitted this estimate. City Manager Kelly said the Chief Building Official was over budget last Fiscal Year; however, he expected the current trend to continue. He said with the annexation there would be approximately $61,000,000.00 for next year's Budget and the Chief Building Official issued approximately $35,000.00 in Building Permits in the first 6 months of this year. He said the City would be well in excess of $100,000.00 for next year's Budget. Mayor Abramowitz asked if the State Revenue Sharing Account reflected the new annexation and City Manager Kelly said this Account would not reflect the annexation until next year's Budget. Mr. Burroughs said the figures for Sales Tax were given by the State which included, State Revenue Sharing, Cigarette Taxes, Alcoholic Beverage Taxes, State Sales Tax, etc. City Manager Kelly asked when the estimates were submitted and Mr. Burroughs replied, July. City Manager Kelly asked if the estimates included the new population calculation and Mr. Burroughs said the population change would not occur until next year. Page 4 8/16/88 - Workshop C/M Rohr asked if the City could obtain assistance for the State Revenue Sharing and Mr. Burroughs said the only way the population could be changed was through the State Legislators. Mayor Abramowitz said a new Law was implemented eliminating some mandatory portions of the Fire Inspection Law which would affect the millage rate by decreasing it. He asked the City Manager to submit the new law to the City Council for their review. V/M Stelzer said the City had the right to require stricter regulations than the State provided. Mayor Abramowitz said the State did not mandate the fees. Mr. Burroughs said there were volatile items in the Budget, such as, Building Permits, Engineering Fees, Planning Fees, Fire Inspection Fees and Recreational Fees. Mayor Abramowitz said these figures were projected by the Department Heads and Mr. Burroughs said the reason for raising taxes this year was because the City was over $1,000,000.00 short. At 11:35 A.M., Mayor Abramowitz RECESSED this meeting and RECONVENED at 11:55 A.M. with ALL PRESENT TAPE 2 C/M Hoffman asked if the City Manager discussed the matter regarding direct billing with Waste Management, Inc. He asked if Waste Management, Inc., was confronted with the possibility of monthly billing with a lesser increase in billing costs. City Manager Kelly said he discussed this matter with Ed Johnson; however, he was not very receptive to doing this. Mr. Burroughs said this was another item that needed a rate change by October 1, 1988 because of the increase. V/M Stelzer said this would not affect the Budget and Mr. Burroughs agreed. Mayor Abramowitz said he was very concerned with the City suffering the consequences because Waste Management, Inc., was late in submitting their information. City Manager Kelly said Mike Couzzo, Public Works Director, was providing information regarding rate increases for the City Parking Lot Fees Account. He said he wanted to get out of the parking lot business and was reviewing the legality of doing so. C/M Hoffman said the City should provide a facility for recreational vehicles and prohibit parking on the streets. He said the City should not consider getting out of this business but figure out how the City could benefit more from the parking lot. He said the residents were entitled to have security at the parking lot. Mayor Abramowitz said he did not want to see the rates doubled and City Manager Kelly said the rates would be raised $5.00 only. Mayor Abramowitz asked if the Recreation Fees Account had Page 5 8/16/88 - Workshop was a realistic figure and City Manager Kelly said Mike Couzzo, Public Works Director, said that the figures were realistic. Mayor Abramowitz asked if this figure included the Summer Program and Mr. Burroughs said the Summer Program was listed on the next line. Mayor Abramowitz said he did not like the figures being up 110% and C/M Rohr agreed. V/M Stelzer said the programs were extended and Mayor Abramowitz agreed. Mayor Abramowitz said this figure included the new ballfields, Multi -Purpose Complex and the concession stands. Mayor Abramowitz said the Summer Recreation Program needed to raise their fees. He said the fees were reasonable and the Programs were successful; however, he did not feel the Programs were self-sufficient. C/M Hoffman said the City should not be self-sufficient on everything and Mayor Abramowitz said the Revenue for the Summer Program was approximately $80.00. Mayor Abramowitz said the fees could be raised $10.00 to $15.00 to make the Programs more self-sufficient. He said the Summer Program allowed non --residents. C/M Hoffman said the City should not have the Program open to non --residents at this time because the City had enough children to fill the Programs. He said the Program was opened to non-residents because there was not enough children in Tamarac; however, this is no longer true. Mayor Abramowitz asked City Manager Kelly to investigate how many non-residents were enrolled in the Summer Program. City Manager Kelly said it was important for the City to provide for their residents first and Mr. Burroughs agreed. Mr. Burroughs said if the Program was under enrolled, non-residents should be permitted at a higher fee than residents. Mayor Abramowitz said he would like this matter investigated because he did not want the City accused of spending money on non-residents. Mayor Abramowitz asked how the figures for Fines and Forfeitures were derived and Mr. Burroughs said the money was received from the County and the figures were based on experience. V/M Stelzer asked if there would be $240,000.00 on Planning Fees since there was only $92,000.00 last year. Mr. Burroughs said the City Manager added money in the Budget for Land Section 7. City Manager Kelly said in April, 1989, a projection of approximately $121,000.00 minimum would be received from Sand Section 7. V/M Stelzer asked how the money would be obtained and City Manager Kelly said he did not know. V/M Stelzer said he did not want to include this figure unless it's Page 6 1 1 1 8/16/88 -- workshop origin was known. City Manager Kelly said the City Planner assured him that this money would be received. C/M Hoffman asked what the Miscellaneous Account was for and Mr. Burroughs said this Account was used for anything that was not listed in the Budget. Mr. Burroughs said the biggest unexpected revenue this year was the Insurance Rebate from the Florida League of Cities; however, this may not occur each year. V/M Stelzer said for 9 months there was $129,000.00 interest income figured. He asked how $101,000.00 was figured for 3 months on a basis of $15,000.00 per month. Mr. Burroughs said the figure of $129,000.00 was based on 8 months because the City was one month behind. V/M Stelzer asked how $101,000.00 could be figured for 4 months and Mr. Burroughs said he was comfortable with this figure. V/M Stelzer said he was not comfortable with this figure. Mayor Abramowitz asked if there was something that was added to the figure and V/M Stelzer said he was questioning the increase between the actual and the estimated for the year. Mr. Burroughs said he was using last year's Budget to figure this Account. He said the figure last indicated $205,000.00 and the rates have increased this year. He said the return on the investments have increased with the same equity. C/M Bender said there was only a $35,000.00 increase for the year. Mayor Abramowitz questioned the figure of $1,250,000.00 for the Sale of Surplus Property and City Manager Kelly said the public Works Property would be sold at approximately 2.75 million dollars. Mayor Abramowitz asked what happened if the property could not be sold and Mr. Burroughs said expenses would have to be cut. V/M Stelzer asked what happened with borrowing the money from the Pension Fund and City Manager Kelly said the Attorneys indicated that using the land as collateral was like borrowing against a Bond which was strictly prohibited by the State Statutes. V/M Stelzer asked if the Utility monies could be used and Mr. Burroughs said if the projects for Utilities are to continue, there was no money available. Mr. Burroughs said the capital improvements in Utilities was ending and most of the money was used. Mayor Abramowitz asked if Utilities had the money and Mr. Burroughs said yes, if projects were curtailed. V/M Stelzer said the loan would only be for approximately 3 months and Mayor Abramowitz had concerns with the sale not being successful. i Page 7 8/16/88 - Workshop V/M Stelzer suggested the money be borrowed from Utilities and C/M Hoffman said he would rather wait until the property is sold. V/M Stelzer asked how much it cost the City each month for not bidding and City Manager Kelly said $200,000.00 interest to borrow 2.75 million dollars. Mayor Abramowitz asked why it was costing the City money for not going out to bid and City Manager Kelly said the longer bidding is delayed the more inflation raises the cost. City Manager Kelly said for the Sale of the Public Works Building at 1.25 million dollars, a proposal was received for 2.75 million dollars allowing $200,000.00 for interest to the proposer leaving the City 2.5 million dollars. He said the Project cost for the Public Works/Utility Building was approximately 1.8 million dollars leaving about $700,000.00. He said there was a minimum offer for the City Hall of $600,000.00 cash which would be 1.3 million dollars. He said the City would be using a broker for the sale of the City Hall and he estimated 1.25 million dollars for the sale. Mr. Burroughs said whoever is figuring the Budget next year may find a $1,250,000.00 shortfall because this was a non -recurring revenue. C/M Hoffman said this money was expected for capital expenditures for this year's Budget. V/M Stelzer said if this year's Budget indicated $700,000.00 for capital equipment, $1,250.00 was included in income. He said $500,000.00 was being used for operating expenses in the City and he objected to this. Mayor Abramowitz asked why V/M Stelzer objected to this and V/M Stelzer said property could not be sold for operating expenses. V/M Stelzer said he has been working on a project with the City Planner regarding Storm Drainage. He said a storm drainage district was being planned for and would be finished within a few months. He said when the rates were figured, the City would be able to obtain approximately 1.5 million dollars in revenue per year. V/M Stelzer said this program would consist of charging for water running off concrete or asphalt. He said everyone would be charged on the basis of their square footage. He said the charge was calculated at $1.50 per month and he felt that this figure was too high. He said this fee would be very large for the business people. V/M Stelzer said the City had a Drainage Fund of approximately $400,000.00 which has not been expended. C/M Hoffman asked if this project could be applicable to this year's budget and V/M Stelzer replied, yes. V/M Stelzer said the Drainage Fund consisted of approximately $400,000.00. He said this fund could be eliminated and the money could be placed in the General Fund, which would bring the millage rate down $.30. V/M Stelzer said the Drainage Fund would not be needed when this project was operating. He said there were r L J Page 8 8/16/88 - Workshop questions regarding the impact fees being in the present Drainage Fund; however, in 1980, there was a transfer of $600,000.00 to the General Fund, which was transferred into the Drainage Fund. He said he could not get an explanation for this transfer and, after reviewing the matter, he found that with all of the drainage fees received, the City contributed $1,100,000.00 and spent $1,138,000.00. He said the drainage fees accumulated from impact fees were $1,000,000.00 and all the interest was transferred to various funds. V/M Stelzer said a determination had to be made regarding the restriction of the drainage fees which were accumulated from impact fees or if the money spent on drainage projects could be implemented as the impact fees leaving the remaining money in the account as the City's revenue. V/M Stelzer said he felt that the monies in the Drainage Fund could be transferred into the General Fund as income and the monies from the Storm Water Drainage District Project would be used for drainage repairs throughout the City. C/M Hoffman said this would require the residents to pay another tax and he did not agree with adding an additional tax to the proposed Utility tax increase. He said he would rather wait until next year for this project. Mayor Abramowitz asked when the project would be ready for operation and V/M Stelzer within a few months. Mayor Abramowitz said he would be in favor of this project providing the money was used for drainage; however, he would not be in favor of this project at this time. He suggested this matter be discussed when the project was ready for implementation. C/M Rohr said if this program was implemented and it saved the residents approximately $70.00, they would be willing to pay the additional $9.00 per year. C/M Hoffman said the residents would not be saving that much per year. V/M Stelzer said the expenditure of the money for the Storm Drainage Project was approved and C/M Hoffman said V/M Stelzer proposed this Project and it was turned down by the City Council. Mayor Abramowitz said this idea was excellent; however, the timing was not right. He said he is against spending money that the City did not have or money assumed to be received. City Manager Kelly said Mr. Burroughs and V/M Stelzer's observations regarding the money was valid; however, there was $66,000.00 utilized by the Planning Department for the study of the Drainage Fund. He said the project would be implemented this Budget year; however, he felt the project was very good. He said Broward County agreed with this project; therefore, the City should implement their own program. He said the City would have to address the shortfall in the ad valorem tax next year and this project could be an answer to that shortfall. V/M Stelzer asked if the City was going to use $500,000.00 of surplus for City projects. He said this was not in the best interest of the City. Page 9 - Workshop TA PE 3 C/M Hoffman said if the ad valorem remained the same, more money would be generated and the surplus money could be applied to the ad valorem. City Manager Kelly said this could be done and V/M Stelzer said he did not agree with the City ending up with a -0- surplus. Mayor Abramowitz said this was why he was against the ad valorem being decreased. V/M Stelzer said he would like to see the surplus money used for capital expenditures and City Manager Kelly said the adoption of the Budget did not authorize expenditures. City Manager Kelly said the expenditures had to be approved by the City Council through Resolutions. At 11:40 A.M., C/M Hoffman WITHDREW from the meeting. Mr. Burroughs said the transfers from Drainage, Parks and Trafficways were impact fees funds accumulated through interest earned and transferred into the General Fund. He said there would be several questions posed on this matter from the public. V/M Stelzer said he reviewed the City Code and there was nothing indicating that this was illegal. Mr. Burroughs said $10,200.00 from the Utilities East Operating Fund was in lieu of taxes. He said Tamarac Utilities West Bond Issue required a 6% tax transfer and this was done on Tamarac Utilities East as well. He said the amount of $350,000.00 was a fee that the Utilities Department paid the City for services. Mr. Burroughs said the Tamarac Utilities West Budget should be ready for review and there may be a substantial surplus that could be used to reduce rates. V/M Stelzer said the Tamarac Utility rates could not be reduced because of the Bond issue. He said the Bond issue stated that the City had to charge 120% more than what is collected. He said the surplus could only be used for the purchase of equipment. Mr. Burroughs said the surplus could be used in lieu of the Capital Improvement Account. Mayor Abramowitz asked what the surplus could be used for and Mr. Burroughs said the surplus could be used for capital improvements and projects within Tamarac Utilities West.. V/M Stelzer said Tamarac Utilities West has been charging against their income. He said he objected to Tamarac Utilities West labeling capital improvements as their operating expenses. He said the requirements of charging against revenue should be eliminated. He said this would allow the City to reduce the rates and use the capital surplus available for the equipment. Mayor Abramowitz said if the rates were reduced, the surplus would be reduced. He said he would rather leave the rate as it is and use the money for services within the City. C/M Rohr said based on the interest income, how much Page 10 8/16/88 - Workshop 1 additional income could be accumulated if interest rates were increased 1% within the next 6 months. V/M Stelzer said this could not be calculated at this time. V/M Stelzer asked if the 1986/87 FMSIF Distributors distribution was included in the Budget and Mr. Burroughs said this was listed in the Miscellaneous Revenue Budget. City Manager Kelly said he was advised to Audit the Utilities Department and he met with Touche Ross regarding the matter. He said Touche Ross submitted a proposed Agreement at a price not to exceed $2,500.00. He said the City Attorney has not read this Agreement; however, if the City Attorney did not feel the Agreement had to go before the City Council for approval, Touche Ross would be used for the Audit. City Manager Kelly said he would be pursuing a program for direct deposit for employee paychecks. He said this program would save the City a great deal of money. Mayor Abramowitz said this program would be very bad for the employees. He said the City had to take into consideration how the other people live. He said there were problems with smoking as well. C/M Bender said he was using a direct deposit program and there are several problems with the program. He said if the computers fail, the accounts are not credited and people live day by day. He said this would be very bad for people who lived day by day. With no further business, Mayor Abramowitz ADJOURNED this meeting at 1:00 P.M. CAROL E. BARBUTO, CITY CLERK "This public document was promulgated at a cost of $219.60 or $6.10 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." Page 11 i