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HomeMy WebLinkAbout1989-08-28 - City Commission Budget Workshop Meeting Minutes7525 NORTHWEST 88TH AVENUE 0 TAMARAC, FLORIDA 33321.2401 TELEPHONE (305) 722-5900 August 28, 1989 Rev. 8/28/89 NOTICE OF CITY COUNCIL BUDGET WORKSHOP MEETING for FISCAL YEAR 1989/90 There will be a Workshop Meeting of the City Council held an * Wednesday, August 30, 1989 at 9:00 a.m. in Conference Room #1, City Hall, 7525 NW 88 Avenue, Tamarac, Florida. The purpose of this meeting is to review the budgets for the is following Departments for Fiscal Year 1989/90: Charter Board Insurance Revenues Utilities All meetings are open to the public. CAE/nr 19 Carol A. Evans City Clerk AN EQUAL OPPORTUNITY EMPLOYER POLICY OF NONDISCRIMINATION ON THE BASIS OF HANDICAPPED STATUS CITY OF TAMARAC CITY COUNCIL BUDGET WORKSHOP MEETING WEDNESDAY, AUGUST 30, 1989 CALL TO ORDER: Mayor Abramowitz called this meeting to Order on Wednesday, August 30, 1989 at 9:00 A.M. in Conference Room #1 (City Clerk's Office). PRESENT: Mayor Norman Abramowitz Vice Mayor Dr. H. Larry Bender Councilman Bruce Hoffman Councilman Henry Rohr Councilman Jack Stelzer ALSO PRESENT: John P. Kelly, City Manager Ken Burroughs, Finance Director Dina McDermott, Assistant to the City Manager Nancy Ramoni, City Clerk's Office The purpose of this meeting was to review the proposed Budget for Fiscal Year 1989/90. Items discussed were as follows: Charter Board Insurance Utilities Revenues -----------------------____ Charter Board Budc�et-Page 26 City Manager Kelly said he suggested to the City Council that Carla Coleman from FAU/FIU, be contracted to review the Charter. He said the proposed price was $3,000.00 and this amount was not provided in the Budget. He said this cost should be placed in the Charter Board Budget and he recommended that the Budget be increased by $3,000.00. Ken Burroughs said a new line Item would be implemented and referred to as Account 306 - Special Services. City Manager Kelly said because of this project there would be several supplies and copies needed. He suggested that approximately $700.00 be added to the Charter Board Budget for Office Supplies. Mayor Abramowitz said when the City Manager brought the matter to him, he thought it was a very good idea. He said he felt that the Charter review could take place with the Charter Board and an outside non -political professional. He said he was very pleased if the two worked together in behalf of the City. He said the cost for supplies should be $1,700.00 to avoid any problems with funding in the future for the project. V/M Bender asked if the total Budget would be $19,420.00 and City Manager Kelly agreed. V/M Bender said this included $3,000.00 for the contract and $1,700.00 for supplies. ** There was an increase of $4,700.00 for the Charter Board Budget. Page 1 8/30/89-pw Mayor Abramowitz announced that Zeke Feldman, Charter Board Chairman, was also present. Insurance Budget - Page 61 At this time, Peter Mack, Personnel Director, and Susan Tillman, Consulting Insurance Advisor, ENTERED the meeting. City Manager Kelly said it was recommended to the City Council that the disability insurance be deleted; therefore, it was removed from the Budget. He said the City Council asked Ms. Tillman to review the other insurance policies of the City and she would be reporting on this. Mayor Abramowitz said the City Council asked that backup information be provided during the discussions and Ms. Tillman said she would distribute this information when each policy was discussed. Ms. Tillman said the first discussions would consist of policies that could be eliminated. She said equipment insurance could be covered under the blanket policy of fire and extended coverage; therefore, equipment insurance could be eliminated. V/M Bender asked if the policy was $3,000.00 and Ms. Tillman replied, yes. Ms. Tillman said police professional insurance was no longer needed. She said medical malpractice insurance could be covered under the blanket of general liability insurance; therefore, medical malpractice insurance could be eliminated. C/M Stelzer asked what Medical Malpractice Insurance provided and Ms. Tillman said the Insurance was for Firefighters for any negligence they caused in their duties. She said most of the Firefighters were Emergency Medical Technicians (EMT's). Ms. Tillman said there was a question at the last Workshop meeting regarding what public officials liability insurance was. She said this insurance covered public officials within the City that served as managerial staff. She said this coverage was not needed because it was covered under the blanket of the general liability iInsurance; however, a Bond was needed for the Finance Director, which would cost approximately $3,000.00. Mayor Abramowitz asked if this insurance covered Department Heads as well as elected officials and Ms. Tillman replied, yes. Mayor Abramowitz asked if $49,000.00 represented the cost of all the public officials in the City and Ms. Tillman replied, yes. Mayor Abramowitz asked if everyone would be covered if the insurance was eliminated and the Finance Director was bonded and Ms. Tillman replied, yes. Ms. Tillman said the elected officials were covered under the blanket of the general liability insurance, which would be explained. She said separate insurance was not Page 2 8/30/89-pw needed for this type of coverage unless the City wanted it. She said the acts for which the public officials would be found liable would be negligence and this was covered under Sovereign Immunity. She said dollar one coverage was not necessary when the City would be liable up to a specific amount. C/M Hoffman said the City of Tamarac was constantly being sued and he asked if the City Council would be covered when this insurance was eliminated if a member of the Council was sued for something he said on the podium. Ms. Tillman said she would be proposing a higher deductible, such as $100,000.00 as opposed to coverage from dollar one. She said her proposal would include protection for the City Council as a public official past the first $100,000.00. She said if the City were to be sued and $100,000.00 was against the City Council for some act, the City would pay the first $100,000.00 and there would be excess insurance available to pay any costs over that. C/M Hoffman said he was turned down on umbrella insurance because he was a public official. He said the insurance company would not provide this insurance because they felt that public officials were prone to be sued. He said he was advised that he should be covered by the City. Mayor Abramowitz said Ms. Tillman would be proposing a Policy to the City Council later in her Report. C/M Hoffman asked if $49,000.00 should be eliminated and Ms. Tillman replied, yes. City Manager Kelly said in terms of a premium, elimination of the insurance was being recommended. Mayor Abramowitz said Ms. Tillman would be informing the City Council of the policies that were not needed and then propose what should be done. C/M Rohr asked if $3,000.00 was needed to cover the Finance Director and Ms. Tillman said $3,000.00 would come under the next line which was the employee and official bonds. She said $49,000.00 should be deleted from Item, 45E. Ms. Tillman said Item 45F, Employee & official Bonds, has bonded more than the Finance Director in the past. She said by Statutes, the City only had to bond the Finance Director and she recommended that the bond for the Finance Director be $3,000.00; therefore, the remaining funds could be eliminated. The City Council AGREED with this elimination. Ms. Tillman said fire and extended coverage was a premium of $10,000.00 and this coverage was for all of the property owned by the City, which was approximately 14 million dollars. She suggested that property, general liability, auto liability and excess liability be combined with a deductible of $100,000.00 and excess insurance be purchased for claims over $100,000.00. Mayor Abramowitz asked what the total premiums were for the four policies and Ms. Tillman replied, approximately $469,000.00. Ms. Tillman suggested that $150,000.00 be used to buy excess insurance for additional coverage. Page 3 8/30/89-pw Ms. Tillman said she was basing her recommendations on the City's past history of 10 years. She said past claims have been very low and she did not feel that the City needed all of their existing policies. She said she was proposing that the City establish a loss fund for any payment of claims. V/M Bender asked if this pertained to Items 45G, 45H, 451 and 45J and Ms. Tillman agreed. Mayor Abramowitz asked if Broward County has had a self -insured liability program for several years and Ms. Tillman replied, yes, the County had several claims bills against them. Ms. Tillman said a claim could not collect more than $100,000.00 from the City when the self -insured liability program was active unless the claimant went to the legislature to file a claims bill. She said Broward County has had several claims bills in the amount of 2.5 million dollars; however, it took approximately 3 years for a claims bill; meanwhile, the monies could be accumulated in the fund loss account. She said the loss fund was important and should be added to each year to assist the City in any losses for the coming years. C/M Stelzer asked if $150,000.00 would be used to buy excess insurance and Ms. Tillman replied, yes. C/M Stelzer asked if the savings of $369,750.00 should be placed in the loss fund and Ms. Tillman said the amount for the loss fund would have to be discussed. Mayor Abramowitz said he would like Ms. Tillman to continue with her proposal and the loss fund could be discussed later. Ms. Tillman said the Police and Fire Accident Insurance had to be provided by the City because it was a Statutory requirement and Mayor Abramowitz asked if there would be a savings since the City no longer had a Police Department. Ms. Tillman replied, yes; however, she did not know these figures at this time. Mayor Abramowitz asked what Monies and Securities Insurance was for and Ms. Tillman said this policy could be eliminated. Mayor Abramowitz said he wanted to make sure that the City was covered for these things and Ms. Tillman said the City would be covered for costs over $100,000.00 if the proposed general liability self -insured program was enacted. Ms. Tillman said the flood insurance was required because she has been informed that the Federal Government would not provide aid for the entire City if this insurance was not available. She said the funding received by Federal Aid would be higher than the cost of the premium, which was $8,400.00 per year; therefore, she recommended the City retain this insurance in case of a flood. Ms. Tillman said the City was presently covered by the Sovereign Immunity Act, which meant that the City could not be sued for more than $100,000.00 for a negligence act. She said there were three exceptions to this rule, which were 1) a person could file a claims bill against 1 1 11 Page 4 8/30/89-pw the City through the Legislature, 2) a person could file Federal actions against the City or, 3) a person could file out of State actions against the City for more money. Ms. Tillman said she was proposing the City buy excess insurance for these three exceptions in the amount of $150,000.00. She said she was proposing a high deductible on property insurance, which would cover the City after the first $100,000.00 up to the total value of its property which was approximately 14 million dollars. Mayor Abramowitz asked Ms. Tillman to explain the exception of out of State action and Ms. Tillman said the exception pertained to a City employee who went out of State on City business and committed an negligent action against someone. Ms. Tillman said if this occurred, the City would be subject to the laws of the State that the negligent act was taken in, which may not have a Sovereign Immunity Act. Mayor Abramowitz asked City Manager Kelly if employees often went out of State on City business and City Manager Kelly said the Firefighters went out of State often for training. Mayor Abramowitz asked Ms. Tillman what the policy cost would be and Ms. Tillman replied, $100,000.00. She said if the insurance companies knew that the City did not have massive coverage, there would probably be few lawsuits taken against the City. She said the bottom line cost for insurance in the budget at this time was $447,440.00 per year; however, her proposal would bring the bottom line cost to approximately $233,000.00. Mayor Abramowitz asked Ms. Tillman to explain what the other exceptions were and Ms. Tillman said a federal action was a suit filed against the City in the Federal Courts, which was not subject to State laws; therefore, the City could be sued for more than $100,000.00. Ms. Tillman said the City presently had a self -insured Workers' Compensation program that worked in the same way that the self -insured general liability program would work. She said the total cost of $233,000.00 included the self -insured Workers' Compensation program. C/M Hoffman asked if the cost for the self -insured Worker's Compensation program was listed elsewhere in the budget and Ms. Tillman replied, yes. C/M Hoffman asked if the other line item could be deducted since it was included with $233,000.00 and Ms. Tillman replied, yes; however, she did not know if this was the way the budget process was handled. Mayor Abramowitz asked if $233,000.00 included the Workers' Compensation premium and Ms. Tillman said the premium for the self -insured Workers' Compensation program was $60,000.00. She said this cost should be added to the bottom line figure of $447,440.00 and then $233,000.00 should be subtracted to find the total savings. Page 5 8/30/89-pw Mayor Abramowitz said the bottom line figure would be $507,440.00 if the self -insured Workers' Compensation program was added. Mayor Abramowitz asked if there were reserve dollars budgeted for the loss fund of the self --insured Workers' Compensation program and Ms. Tillman said the Finance Director informed her that there was approximately $449,000.00 in the loss fund for the self -insured Workers' Compensation program. C/M Hoffman asked if this much was needed in the loss fund and Ms. Tillman said the City's history indicated that approximately $200,000.00 per year was paid within the last 4 years. She said a Workers' Compensation claim had a life span of 10 years; therefore, the history advised her that there should be at least $200,000.00 in the loss fund. City Manager Kelly said there were a few claims pending that the City was responsible for and Ms. Tillman said the City's loss history has not been massive; however, there could always be a very large claim filed in the future. Mr. Burroughs said he was involved in this type of program for approximately 15 years and the practice has been to keep double the amount of the claims history in the loss fund. He said this would mean that the City should keep $400,000.00 in the loss fund if their claims experience has been $200,000.00 per year. Mayor Abramowitz asked if one loss fund could be provided for both of the self -insured programs and Mr. Burroughs said one reserve could be used to encumber all of the policies in the City. Mayor Abramowitz said his experience has proven that all actuaries in insurance have based their fees on past history. He said past history could change tomorrow; however, because of the recent merge of the Police Department with the Broward Sheriff's Office, the City's loss experience could be much lower. Mayor Abramowitz said having insurance policies was a business judgement and the past history of the City was very important to him when making his decision. C/M Hoffman asked what the reserve should be for both of the self -insured programs and Ms. Tillman said the City should build the reserve on a yearly basis. Ms. Tillman said the City of Pompano recently had a reserve containing approximately 3 million dollars and the City of Hallandale had a reserve containing approximately $800,000.00. Ms. Tillman said Tamarac's past history in general liability claims has been approximately $19,000.00 per year. She said if the City wanted to adopt the procedure recommended by Mr. Burroughs the reserve should contain approximately $40,000.00 per year. She said the City could probably use the existing amount in the self -insured Workers' Compensation loss fund; however, in Page 6 8/30/89-pw future years, the account should be in the area of one million dollars to allow the City to become their own insurance company. She said the City would be secure by having a high reserve fund. Mayor Abramowitz said he did not favor the City going into the market naked. He said the past history indicated that in 10 years, $3,100,000.00 was spent for premiums and the payouts were only $179,000.00. He said he was informed that the City was once sued for 4 million dollars; however, during that time the City was not covered by Sovereign Immunity and Ms. Tillman agreed. Mayor Abramowitz said based on the past history of the premiums and claims, he would not object to having a high reserve for self -insured programs. He said there should be a self' -insurance program implemented in the City that encompassed all of the policies. Mayor Abramowitz said since Ms. Tillman was hired by the City there were very few doctors who wanted to talk to her and Ms. Tillman said there were three employees who returned to light duty work, which had been collecting total disability. Ms. Tillman said if the City was going to embark on a general liability self -insured program, she would recommend that a strong safety program be implemented in the City. She said this type of program would assist the City in making the self -insured program successful. She said funds would have to allocated to provide experts, training and proper equipment for the safety program. She said the employees should be trained about safety on a monthly basis and given incentive rewards for providing a safe environment. Mayor Abramowitz said if a safety program was needed, he did not object to seeing that it was provided. C/M Hoffman said the City Council needed to decide what amount the loss fund should contain. He said there would be a savings of approximately $260,000.00 by going self -insured and he asked if $60,000.00 should be added to the existing loss fund. Ms. Tillman said that she felt the addition of $60,000.00 to the existing loss fund would be a safe amount. She said the first year of a self -insured program seemed to be very good because it took approximately one year for a claim to be filed and heard; therefore, there may not be claims paid out the first year. C/M Hoffman said the City would be covered for all claims that occurred before October 1, 1989, because premiums were paid out for those claims and Ms. Tillman agreed. V/M Bender suggested that the reserve fund contain $400,000.00 for the self -insured Workers' Compensation and general liability programs and Mayor Abramowitz said he did not feel that $49,000.00 should be deducted from this fund. C/M Hoffman suggested that the reserve fund receive $60,000.00 for both programs. He said the fund would then have $509,000.00 in reserve. He said this would leave a total savings to the City of approximately $200,000.00. Page 7 8/30/89-pw TAPE 2 C/M Rohr asked how much was needed for a safety program and C/M Hoffman said some of the funds from the savings could be used to start this program. Mayor Abramowitz said when he was approached about Ms. Tillman being hired he was not pleased because of the financial situation of the City; however, he knew now that he was wrong. He said he was informed that due to Ms. Tillman's background, she was able to settle claims as opposed to going to litigation. Ms. Tillman and City Manager Kelly agreed. Mayor Abramowitz said he was very concerned with the Pension Fund in the City. He said every Friday, he was asked to sign computer payouts and he has become very involved with the Pension Plan. Mayor Abramowitz said there were several things he could not understand regarding the Pension Fund and, after further investigation, he found that there were some employees receiving a Pension that was higher than the wages they earned. He said he became concerned and wanted to see the procedure tightened up; however, he was informed that Pension business was not the City's business. He said he felt this was incorrect because the City paid the expenses of the Pension Board. He asked that Ms. Tillman become involved in the claims for the Pension Plan. Referring to Item 45L, Monies and Securities, V/M Bender asked what this policy covered and Ms. Tillman said this policy covered anyone in the City that was in a Fiduciary position because they handled the City's money. She said this coverage was in case these people stole monies from the City while in that position. She said based on the City's past history, this policy was not needed. V/M Bender asked if this policy only covered theft and Ms. Tillman replied, yes. V/M Bender asked if the City had a policy that covered cases involving securities, such as the Comark matter. Ms. Tillman said she was not familiar with this matter and V/M Bender asked if there was a possibility the City was covered by this type of claim. He said if so, maybe the City could be reimbursed for some of the monies already expended for this amount. Mr. Burroughs said the public officials bond would cover the Comark matter and C/M Hoffman said the City would have to place a claim against the public officials that served in office during that time. Mayor Abramowitz said the concern on this matter was who was at fault, such as the Finance Director, Mr. Burroughs said the Finance Director and public officials as well. V/M Bender suggested that this be investigated and Mayor Abramowitz said this matter did not pertain to the budget; however, it could be investigated. Mayor Abramowitz said C/M Hoffman suggested that an additional $60,000.00 be placed in the existing reserve account to cover both self -insured programs. He said the total amount of the reserve would be $509,000.00. He asked what was needed for the safety program. Page 8 8/30/89--pw Ms. Tillman recommended that $5,000.00 be allocated; however, she was not sure that this amount was appropriate. She said she would like to identify the areas that are a concern in the City and ask the experts to review the problems and create a safety program. She said she would propose a safety program to the City after there was a basis for the program. City Manager Kelly said the Safety Advisory Board has been trying to do this for several years; however, they were only allowed approximately $400.00 per budget year. He said nothing could be done with the monies appropriated to them. Mayor Abramowitz said the City was a member of the National Safety Council who was very interested in assisting the City in a safety program. He said the National Safety Council indicated that the City has never asked them for assistance. Ms. Tillman said the National Safety Council and Gallagher & Bassett would provide free films and videos for the City to use. She said she would like the employees to be shown a video on safety every month. She said the funds would provide training for the employees, especially the new hires. She said an employee should not be placed in a position without knowing the safety precautions for that position. C/M Hoffman suggested that $5,000.00 be allocated for a safety program. City Manager Kelly asked the City Council how they wanted Mr. Burroughs to allocate all of the changes. Peter Mack, Personnel Director, said there was a fund available for the Safety Advisory Board and the additional funding could be placed in that budget. Mr. Burroughs said this would not be appropriate. He said the entire budget would have to be changed to provide for a general liability self -insured program. He recommended that a self-insurance budget be provided for all of the insurance services, which would eliminate Pages 60 and 61. He said these items would be eliminated from the General. Fund budget. He said the funds for the safety program could be placed in this account as well. He said the General and Utilities Fund budget would be backcharged for their share of the expenses. The City Council AGREED with this type of appropriation account. Workers' Compensation Budget - Pages 123 and 124 Mr. Burroughs said $37,500.00 was interest earned for this budget and $226,120.00 was what the Departments were back charged for the Workers' Compensation insurance. Mr. Burroughs said Pages 125, 126 and 127 were the expenses for this budget. C/M Hoffman asked where the reserve fund was listed in the budget and Mr. Burroughs said a reserve fund was not a budgeted item. Mr. Burroughs said this fund could be listed in the budget as a beginning and ending budget. Page 9 8/30/89-pw C/M Hoffman said the fund should be listed somewhere in the budget and Mr. Burroughs said this would be done. Mr. Burroughs said the State Statute required the Workers' Compensation fund to be separated from the other insurance coverage and he suggested that the reserve for this fund be a separate fund. Mayor Abramowitz said previously, he asked if the reserve funds for the general liability self -insured program and the Workers' Compensation self -insured program could be in one fund and he was informed that this could be done. Mr. Burroughs said the Workers' Compensation funds could not be co -mingled with the other funds and Mayor Abramowitz asked what the Statutory requirements were for the reserve fund. Ms. Tillman said she was not sure; however, in the past, she established separate reserve funds for each self -insured program. She suggested the City do this. C/M Hoffman asked if the funds could be taken from the self -insured Workers' Compensation reserve fund to provide for needs in the general liability self -insured program and Ms. Tillman replied, yes. Mayor Abramowitz said he would like one reserve fund for each self -insured program, which would begin this year in the amount of $509,000.00. He said the City could allocate money each year to this fund based on a specific percentage. Ms. Tillman said this could be done and Mr. Burroughs agreed. Ms. Tillman suggested that the different amounts be specified in the budget. Referring to Page 126, Excess Liability, Mayor Abramowitz asked if $33,000.00 would be backcharged to the Departments and Mr. Burroughs said this Page would not change under Ms. Tillman's program. Mr. Burroughs said Page 127 was budgeted and backcharged to the Departments. Mayor Abramowitz asked if a specific line item could be eliminated from the budget without complications and Mr. Burroughs replied, yes. C/M Stelzer asked how the expenditures could be deducted on Pages 61 and 126 and Mr. Burroughs said the City Council passed an Ordinance several years ago regarding this procedure; therefore, the City Attorney may have to advise the City Council on how this was done. Mayor Abramowitz asked the City Manager to inform the City Attorney of this matter when he returned from his vacation. C/M Hoffman said C/M Stelzer's question was valid because, at this point, approximately $200,000.00 would be deducted from the expenditure budget. Mayor Abramowitz thanked Ms. Tillman and Mr. Burroughs for their assistance on these matters. He asked Ms. Tillman if the backup she submitted included the City's past insurance history and the proposed general liability self --insured program and Ms. Tillman replied, yes. Page 10 8/30/89-pw Mr. Mack said he was very pleased that the City would be embarking on a safety program and he felt that the program would be successful if it was monitored by Ms. Tillman. Mr. Burroughs said he would adjust the budget appropriately; however, he would submit a memorandum to the City Council regarding the adjustments to insure they were correct. C/M Hoffman said he has been tabulating the decreases in the budget and he asked if it would be appropriate to recap the entire budget at this time to find the actual deductions. Mr. Burroughs said the deductions recently approved were changed in the budget; however, the provisions for the new self -insured program would require several changes and recalculations. Mayor Abramowitz suggested that Mr. Burroughs send a memorandum to the City Council regarding the changes so they could be confirmed. Ms. Tillman and Mr. Mack WITHDREW from the meeting at this time. TUE Budget - Page 133 At this time, Mayor Abramowitz RECESSED the meeting and RECONVENED with ALL PRESENT. Bob Foy, Director of Utilities/Engineering, was present. Mr. Foy said Page 133 was the estimated revenue for the TUE Budget. He said TUE was a stable area; therefore, the revenue next year was expected to be about the same as this year. Mayor Abramowitz asked how much of $353,910.00 was revenue and Mr. Foy replied, $83,000.00. C/M Stelzer said $90,000.00 was used last year and Mr. Foy said this amount was used for capital improvements in the area. C/M Hoffman asked what the surplus would be used for and Mr. Foy said there were several improvements needed in the area, such as the replacement of two lift stations; however, the funding for this improvement was not in the budget. Mr. Foy said there were sewer lines that needed to be replaced in the area, which would be very costly. He said the Utilities Department was pecking away at these improvements; however, there were several areas that have not been touched. He said there were areas with insufficient fire flow and he was requesting that $25,000.00 be appropriated for these improvements. C/M Hoffman asked if $80,000.00 was the only surplus for TUE and Mr. Foy said there was only $83,000.00 in surplus. Mr. Burroughs said $83,000.00 in surplus was carried over from last year's budget. Page 11 8/30/89-pw Mr. Burroughs said the fund equity increase was $114,000.00; therefore, the reserve was being increased by $30,000.00 for next year based on projections. He said all of the funds being collected would not be spent. Mayor Abramowitz asked Mr. Foy to identify the expenditures that would be from CIAC fees throughout the budget because he wanted to make sure that the revenue funds were not being used for projects that CIAC funds could pay for. C/M Hoffman asked what unclassified funds were and Mr. Burroughs said these were the items appropriated on Page 136. Mayor Abramowitz asked why the Water Purchase Fund was increased and Mr. Foy said he was not advised that Fort Lauderdale would enact a rate increase; however, he appropriated funds in case it occurred. He said the City could use more water this year than last year. Mayor Abramowitz asked if the costs were increased if the water usage was increased and Mr. Foy replied, yes; however, he could not use the revenue funds and he had to identify the expenditures. Mr. Burroughs said the budget indicated an increase in the surplus without the rates being increased. He said the revenues exceeded the expenditures. Mayor Abramowitz asked if Mr. Foy budgeted $12,000.00 because more water may be needed and Mr. Foy replied yes. Mayor Abramowitz asked if this was implemented in the revenue account and Mr. Foy relied, no. Mayor Abramowitz suggested that $74,600.00 be reduced by $10,000.00 and C/M Hoffman suggested that the revenue be increased as opposed to the expenditure being decreased. C/M Stelzer asked what the benefit would be by doing this and Mr. Burroughs said if $10,000.00 was reduced from this account it would increase the year end surplus from $114,000.000 to $124,000.00; therefore, nothing would be gained. Mayor Abramowitz said C/M Hoffman's suggestion seemed feasible and he asked that the intended revenue be increased by $10,000.00. Mr. Foy said if the expenditures were used, there would be more revenue. C/M Stelzer asked if it was anticipated that Fort Lauderdale would be increasing their water rates and Mayor Abramowitz said Mr. Foy would know if Fort Lauderdale was anticipating a rate increase. Mr. Foy said this matter would be known in September, 1989, when Fort Lauderdale reviewed their water rates. Mayor Abramowitz asked if the residents would be required to pay higher water rates if Fort Lauderdale increased their rates and Mr. Foy replied, no. Mayor Abramowitz asked why and Mr. Foy said there was a surplus available to provide for the increase. Mayor Abramowitz said he did not want the expenditures to reflect a surplus at the end of the year. He said the budget was being reviewed to bring it into realization. 1 1 1 Page 12 8/30/89-pw C/M Hoffman said recently, it was discussed that the surplus was needed for improvements; however, now, Mr. Foy was indicating that the surplus would be used to accommodate an increase in water rates. Mr. Foy said the budget provided for improvements in the amount of $25,000.00. He said $200,000.00 was budgeted for a backflow prevention program which would accommodate the meter exchange program. He said these were the only improvements being done. C/M Hoffman asked why the surplus was not used to replace some of the water lines and Mr. Foy said other accounts would be providing the funds for the improvements. V/M Bender had concerns regarding why the residents were not being charged for an increase in water rates and Mr. Foy said this could be done; however, there was no need to increase the residents rates at this time. Mayor Abramowitz suggested that $10,000.00 be added to the revenue account and Mr. Burroughs said this would increase the surplus which would cause an unbalanced fund. Mr. Foy said income had to be estimated low; however, the expenditures had to be estimated by what may occur. Mayor Abramowitz said it was indicated that so much would be spent and collected for water usage. He said he did not care how the accounts were handled providing the revenues reflected the expenditures. C/M Stelzer said the income had to be reviewed carefully so that the income was not inflated. He suggested that the revenue remain the same because Mr. Foy budgeted the possibility that Fort Lauderdale would be increasing their water rates. He said the expenditures were always an estimate in hope that there would be a surplus at the end of the year. Mayor Abramowitz said the City was not in the profit making business. He said the City was supposed to be in a factual business. He asked Mr. Burroughs how he would suggest the matter be handled. Mr. Burroughs said if the revenue was increased on Page 133 by $10,000.00, the ending surplus on Page 136 had to be increased by $10,000.00. Mayor Abramowitz suggested that this be done. C/M Stelzer suggested the expenditures be decreased and Mr. Burroughs agreed. The City Council AGREED that $74,600.00 would be decreased to $64,600.00. Mr. Foy suggested that a contingency account be created for the $10,000.00 decrease. C/M Stelzer asked where the funds would come from if Fort Lauderdale increased their rates and Mayor Abramowitz asked if the surplus funds could be used. Mr. Foy replied, no. V/M Bender said the budget process was an estimate of what was needed and Mr. Burroughs said there were certain legal restrictions that had to be followed. Page 13 8/30/89-pw TAPE 3 Page 141 C/M Stelzer asked why the City Council wanted to increase the surplus as opposed to providing a $10,000.00 contingency account and Mayor Abramowitz said he did not feel that a contingency account would be appropriate because it was not factual, which may result in a surplus. Mayor Abramowitz asked what the Wastewater Agreement was for and Mr. Foy said Fort Lauderdale took care of TUE's wastewater. He said the City bought water from Fort Lauderdale and then returned it. Mayor Abramowitz said he was concerned with the Department Heads feeling that they had to use what they budgeted to avoid losing it in the future. He said the City Council was trying to present a factual and honest budget this year. Mr. Foy said the repairs for next year may not be as expensive as this year and Mayor Abramowitz said Mr. Foy indicated that money may be spent and he accepted this explanation. City Manager Kelly said there was not much that could be deducted from the TUE budget and Mayor Abramowitz said staff did a great job in tightening their budgets; however, the City Council and staff may have different opinions about the expenditure of the funds. Mr. Foy said there were approximately 100 homes in the TUE area that still have septic tanks. He said a few years ago, funds were going to be allotted to allow the replacement of these tanks with gravity sanitary sewer lines; however, the City Council decided that this project would not be done. He said there was nothing that could force the residents to change from septic tanks. C/M Hoffman asked if the homeowners were responsible to pay for sewer hookups. C/M Hoffman asked why the City should consider paying for this type of project and Mr. Foy said the City would be doing the project. He said either the residents could be charged in one lump sum or the City could allocate funds for the project and charge the residents over a specific time period. He said he was not suggesting that this project occur next year; however, he wanted the City Council to be aware that this had to be done. He said the project had to be done because it was a deficiency in the system. C/M Hoffman asked how much this project would cost and Mr. Foy said approximately $250,000.00. Mayor Abramowitz asked how many new residents were in the City and Mr. Foy said there were approximately 760 new units in the City this year. Mayor Abramowitz said the water sales for last year were $1,753,360.00 and Mr. Foy said this was an estimated figure. Mayor Abramowitz asked if the new residents generated approximately $35,000.00 and Mr. Foy said the estimated collection from the residents was $1,753,360.00. 1 FJ 1 Page 14 8/30/89-pw V/M Bender asked if the estimated column was a full year and Mr. Burroughs said the estimated amount was for 12 months. Mayor Abramowitz asked if only $35,000.00 was the estimated increase for last year and Mr. Burroughs said this was a lot of money for 760 new units. He said during a rainy season there was very little water bought and this played a big part in the estimated costs. V/M Bender said Kings Point had a lot of new units and Mayor Abramowitz said the City Council was recently asked for funding for two new lift stations. He said the lift stations were required because more capacity was needed for the Lennar Homes development and Mr. Foy agreed. Mayor Abramowitz said if the development was on the tax rolls for the coming year, he thought that there were residents residing there and Mr. Foy said when the development received its Certificate of Occupancy, it was included on the tax rolls; however, residents may not be residing in the units. Mayor Abramowitz said $35,000.00 seemed to be very little for the recent development in the City and C/M Hoffman said there were other line items that should be calculated together, such as the multi -family water sales, in order to make the determination for next year. Mr. Foy said the revenue was anticipated to be increased by 3% next year and Mr. Burroughs said there may be a problem in meeting last year's estimated revenue. Mr. Foy said the overall increase was approximately 3%, which was based on the history of the last two years. Mayor Abramowitz said the general reserve was $356,360.00 and Mr. Burroughs said this was his computation. He said the TUW budget expenditures exceed the revenues by $256,360.00. He said this amount should be $656,360.00 because it was recently determined that there was one item that was not included in the budget at a cost.of $300,000.00. Mayor Abramowitz asked if this was the Rock Island Road Project and Mr. Burroughs agreed. Mayor Abramowitz said this matter would be discussed later. V/M Bender asked why the salaries were increased and City Manager Kelly said there were two positions in last years budget that were split between the Utilities and Engineering Departments; however, these positions would be located in the Utilities Budget and deleted from the Engineering Budget. Mr. Foy said there was half a secretary position decreased from the salaries. C/M Hoffman said there was approximately 1.5 million dollars in salaries which seemed to be a lot and Mr. Burroughs said there were no increases in salaries. Mayor Abramowitz asked why $12,000.00 was anticipated in overtime pay and Mr. Foy said this account was for the part-time employees. Page 15 8/30/89-pw V/M Bender asked why there was a difference in the part-time employee wages and Mr. Foy said there was an employee in the Engineering Department that was transferred into the Utilities Department. C/M Hoffman asked how many employees were in the Utilities Department and Mr. Foy replied, 70. Mayor Abramowitz asked if the benefit options were actual amounts as opposed to estimates and City Manager Kelly replied, yes. Mayor Abramowitz asked if gasoline and diesel accounts were increased and Mr. Burroughs said gasoline, diesel, tires and auto parts were in other accounts; however, Mr. Foy suggested that these items be placed into one account. He said the following Pages would indicate a --0- amount in those accounts. V/M Bender asked why there was an increase in postage rates and Mr. Foy said the Customer Service and City Clerk's Office recently discovered that the Utilities Department was not paying for its postage. Mayor Abramowitz asked what rental and leases included and Mr. Foy a copier and 12 beepers. Mayor Abramowitz asked if beepers were needed since radios have been provided and Mr. Foy replied, yes, the beepers were for the employees who were at home and on call. City Manager Kelly said he did not approve of the employees taking $2,000.00 radios home. Mayor Abramowitz asked if 12 people were always on call and Mr. Foy said more than 12 people were on call. V/M Bender said last year $464.00 was used for repairs on machinery and equipment and he asked why $1,200 was budgeted this year. Mr. Foy said there were two old air conditioning units that would be needing repair and V/M Bender asked if these units had service contracts. Mr. Foy said the units were very old and V/M Bender suggested that this matter be investigated because it may be cheaper to have service contracts. C/M Hoffman asked how old the units were and Mr. Foy replied, approximately 6 years. He said he would investigate the possibility of having a service contract for the units; however, he did not feel that the cost for those contracts would be $1,200.00 or less. Mayor Abramowitz asked if the Workers' Compensation account would be reduced and Mr. Burroughs said this account would be reduced accordingly. Referring to Item 527, Chemicals, V/M Bender asked why there was an increase of approximately $83,000.00 and Mr. Foy said this was for petroleum which was expected to increase in cost. iu 1 Page 16 8/30/ 89--pw V/M Bender said $83,000.00 seemed to be more than what was needed and Mr. Foy said the funds had to be available to accommodate the increase. He said $83,000.00 may not be required; however, funding had to be available. V/M Bender said a more realistic figure could be implemented and, if more funding was needed during the year, the City Council could be informed of the matter. He said these costs should not be padded. City Manager Kelly said he did not feel Mr. Foy was padding the costs and V/M Bender said the figures seemed to be over estimated. Mayor Abramowitz said if there were funds in the budget that were not realistic, he wanted to decrease them and Mr. Foy said the funds would not be spent if they were not needed. C/M Hoffman said in government, it was felt that appropriated funding would be spent and City Manager Kelly said since he became City Manager, this philosophy was not being followed. He said he reviewed the expenditures and required the Department Heads to submit an explanation as to why the expenditures were needed. C/M Hoffman said City Manager Kelly did a great job in holding back expenditures; however, the City Manager should not be responsible for denying the expenditures when funds were available. He said the City Council reviewed the budget to make it realistic so the City Manager would not have this burden. Mayor Abramowitz said there were several occasions when Mr. Foy came before the City Council for funding that was not available in his budget and the only expenditure the City Council ever denied was the cutting of the trees. Mr. Foy said the problem with the trees still existed and Mayor Abramowitz suggested that Florida Power & Light be asked to come and cut the trees again. Mr. Foy said if he owned the Australian Pine trees he would make sure that they were eliminated. Mayor Abramowitz said Mr. Foy could bring items to the City Council in the future for funding if it was not available in the budget. He said the budget should be as close as possible to the actual expenditures. Mayor Abramowitz asked if there was an excess of $25,000.00 in this budget and Mr. Foy said he did not know. V/M Bender suggested that $30,000.00 be eliminated from this budget and Mayor Abramowitz suggested that $10,000.00 be reduced. V/M Bender said this would provide a cushion of approximately $20,000.00. The City Council agreed with this reduction. TAPE 4 4 Mr. Foy asked if $7, 500.00 of the $10, 000.00 reduction could be used for employee certification. Mayor Abramowitz said if this was allowed, it would seem like the City Council was granting this Department an increase in wages. He suggested that this matter be brought back to the City Council at a later date. Page 17 8/30/89-pw Page 146 Mayor Abramowitz asked why there was an increase in dues and memberships and Mr. Foy said this item included the American Water Works Association (AWWA), which required approximately $650.00 for membership. Mayor Abramowitz asked if this membership was needed and Mr. Foy said the AWWA was the bible authority of the water plant. Mayor Abramowitz asked if this membership assisted the Department and Mr. Foy replied, yes, the latest technology was provided through this membership. C/M Hoffman said this cost was not in the estimated costs of last year and Mr. Foy agreed. C/M Hoffman asked how much the estimated cost should be increased and Mr. Foy said by approximately $650.00. Referring to Item 641, Mayor Abramowitz asked why office equipment was increased by $23,214.00 and Mr. Foy said this item included a backup terminal screen in the amount of $7,700.00. He said there was only one screen available and, if it malfunctioned, the entire system could not be monitored. Mayor Abramowitz said he loved equipment that took the place of people; however, the Utilities Department has been operating without this equipment for several years. Mr. Foy said the screen was placed in the facility approximately 1 year ago because of the water plant expansion and now, because it was depended on heavily, a back up was needed. C/M Hoffman asked if both screens would go out together and Mr. Foy said the monitor was of concern. V/M Bender asked if this system was a self-sustaining unit and Mr. Foy replied, no. V/M Bender asked if there were two units needed or a backup screen and Mr. Foy said a backup screen was needed. City Manager Kelly said there was a backup tape unit needed and Mr. Foy said this equipment would cost $19,000.00. City Manager Kelly said there was only one terminal controlling the entire water plant. V/M Bender asked how old the equipment was and Mr. Foy said approximately 1-1/2 years old. V/M Bender asked if the equipment ever failed and Mr. Foy replied, no. City Manager Kelly said a backup system was needed in order to prevent loss and Mr. Foy said it took approximately one week to backup data. V/M Bender said if there were two screens and lightening struck both units would be interrupted. He said this equipment would not provide backup. Mr. Foy said he would not set up both terminals at one time to allow both of them to fail. He said the backup terminal would be used if the other terminal failed. Page 18 8/30/89-pw Mayor Abramowitz asked if this was the most feasible way of handling the matter and Mr. Foy said in his opinion, yes. Mayor Abramowitz said V/M Bender was an Engineer and he did not want to doubt his concerns; however, he did not want items.eliminated from the budget that were necessary for the Department to operate. He said he did not want to allow the funds to be used for toys this year either. Mr. Burroughs asked what would happen if the unit was interrupted and there was no backup terminal and Mr. Foy said if there was no backup, the water plant operator would not know what was occurring on Tract 27. Mr. Burroughs asked if the operator would have to go to the site personally and Mr. Foy replied, yes; however, the operator was the only person at the facility. C/M Hoffman asked if another terminal would provide the information if the entire system was damaged and Mr. Foy replied, no. C/M Hoffman asked if it was possible for one screen to go out without harming the other screen and Mr. Foy said the extra terminal would not be plugged into the system until the other screen failed. Mayor Abramowitz said he did not object to this purchase and he asked Mr. Foy to investigate this matter further to see if there was another way to back the system up without spending this much money. Mr. Foy said he would have to come to the City Council for approval of the use of the money during the year. Mayor Abramowitz asked what Transmission and Distribution was and Mr. Foy this was for the water distribution system, which included water mains, fire hydrants and storage tanks. Mayor Abramowitz asked how many employees were included in this budget on Page 143 and Mr. Foy replied 14. Mayor Abramowitz asked how many employees were included in Item 363 and Mr. Foy replied, 13. Mayor Abramowitz asked how many employees were included in Item 364 and Mr. Burroughs replied, 18. Mayor Abramowitz asked why there was an increase in overtime on Page 147 and Mr. Foy said overtime was for emergency calls, etc. Mayor Abramowitz asked if there were any employees that were not paid by the hour and Mr. Foy replied, no, there were no exempt employees. Mayor Abramowitz asked if the Pension contributions were based on salaries and Mr. Burroughs replied, yes, 8.32% of the gross salary. Mayor Abramowitz asked if the money paid by the City was vested to each employee and Mr. Burroughs said the City's contributions were placed in the Pension Plan. Page 19 8/30/89-pw Mayor Abramowitz asked Mr. Burroughs what he meant by this and Mr. Burroughs said all of the City's contributions were placed into the Pension Fund. Mayor Abramowitz asked if the City contributed $90.00 to an employee working overtime, if that employee only received the City's contributions. Mr. Foy said his paycheck informed him of the total he contributed to the Pension Plan. C/M Stelzer said when an employee retired, all of the contributions were calculated and Mayor Abramowitz asked if an employee was vested with all of the contributions. C/M Stelzer said the actuaries calculated the employee's yearly salary including overtime, longevity, etc., when the employee retired. Mayor Abramowitz asked if the employee that had no overtime received anything from the employees who did. C/M Stelzer said an employee only received what he earned. Mayor Abramowitz asked how long an employee had to work before he was vested and Mr. Foy replied, 5 years; however, an employee could take his own contributions with him if he left the City before 5 years. Mayor Abramowitz asked what happened with the balance of the City's contributions and City Manager Kelly said the contributions remained in the Pension Fund. Mr. Burroughs asked if this was general practice for a Pension Plan and City Manager Kelly replied, no. C/M Rohr asked if the City's contributions for an employee remained in the Pension Plan if the employee terminated with the City before he was vested. C/M Hoffman said the City's contributions remained in the Pension Fund for the vested employees. C/M Stelzer said the vested employees would not be receiving the funds contributed by the City to an employee who withdrew from the Plan before being vested. He said an employee's Pension was based on his earnings by the City. Mayor Abramowitz asked what was done with the extra funds and C/M Stelzer said the fund remained in the Pension Fund as a reserve. C/M Rohr said he did not agree with the City's unclaimed funds remaining in the Pension Fund as a reserve and Mayor Abramowitz said there were other things about the Pension Fund that were much worse. C/M Rohr said the City Council should investigate the Pension Plan after the budget review and Mayor Abramowitz agreed. V/M Bender said the funds should be returned to the City and Mr. Burroughs said the funds were used to keep the future City contributions low. 1 1 I Page 20 8/30/89-pw Mayor Abramowitz said the Pension Plan was very interesting and would be discussed in the future. Mayor Abramowitz asked what Repairs, Water Mains and Accessories were and Mr. Foy said this budget contained three items, which were 468, 504 and 505. Mr. Foy said one item was reduced; however, the other two increased. He said the total increase of the three items was $15,000.00 and these items included the repairs and service of the water mains. He said the increase was caused by a needed valve replacement and markers for the valves. Mayor Abramowitz asked if the funds were needed immediately for the repairs and Mr. Foy said the funds would be needed next year for the repairs; however, he could not identify all of the repairs to be done next year. Mayor Abramowitz said he previously asked Mr. Foy to identify the projects that could be done with CIAC funds and Mr. Foy said there were no projects discussed so far that could be done with CIAC funds. C/M Hoffman said a new tank was recently purchased to facilitate new development at Tract 27. He asked if the CIAC funds could have been used to purchase the tank. Mr. Foy said the tank was a backup for the existing system and C/M Hoffman said the tank would not have been purchased for the system if it was not for the increased development. C/M Hoffman asked if the entire system should have been charged to the CIAC funds and Mr. Foy said the project and a portion of the telemetry system for Tract 27 was done with CIAC funds. C/M Hoffman said additional equipment was not being purchased with CIAC funds and Mr. Foy agreed. C/M Hoffman asked why and Mr. Foy said the ground rules for using CIAC funds was that replacement or repairs of an existing system could not be done with CIAC funds. C/M Hoffman said the existing equipment was for future development in the area and Mayor Abramowitz asked if CIAC funds could be used to paint the new tank. Mr. Foy replied, no, because painting the tank would be considered a maintenance project of the existing equipment. Mr. Foy said once the equipment was purchased and installed, the repairs were considered a maintenance project because the existing customers were using it. C/M Hoffman asked if CIAC funds could be used to replace the existing tank with a larger one because it was not enough capacity for the area. Mr. Foy said this was considered an expansion of the existing system and CIAC funds could be used for expansion for new customers; however, if the new customers participated in the expansion, they would have to pay their fair share of the costs. Page 21 8/30/89-pw C/M Rohr asked if the system was being used to supply water to customers at this time and Mr. Foy replied, yes. C/M Hoffman asked if the system would have been built if there were no customers in the area and Mr. Foy said he felt that the system would have been needed. C/M Hoffman disagreed. Mayor Abramowitz asked why the system would have been built if it was not needed and Mr. Foy said he felt that the system was needed. He said there were customers existing in the area; however, a 2 million gallon tank may not have been needed right away. He said a 1 million gallon tank could have been used. Mayor Abramowitz asked if CIAC funds could have been used to buy a larger tank in the future and Mr. Foy replied, yes, if expansion was needed. Mayor Abramowitz said he would not disapprove of maintenance work in the future; however, he would like CIAC funds used for the appropriate projects. Mr. Foy suggested that the City Attorney be asked to review the usage of the CIAC funds and report back to the City Council with his findings. C/M Hoffman asked Mr. Foy why he did not check with the City Attorney about using the CIAC funds for projects before bringing the projects to the City Council for approval. Mr. Foy said he felt that he has made the appropriate decisions in the past and Mr. Burroughs said it was not possible to not use all of the CIAC funds. Mayor Abramowitz said there were projects this year that could have been done with CIAC funds and C/M Hoffman said the City Council felt that CIAC projects should be done with CIAC funds as opposed to tax dollars. C/M Rohr suggested that the City Council receive a legal opinion from the City Attorney regarding the use of the CIAC funds so that the City Council could direct the use of those funds. Mayor Abramowitz said he discussed this matter with Mr. Foy several times and there were remarks made regarding profit making. He said the Utilities Department and City were not in the profit making business; however, they should not lose money either. He said the Department should pay for itself and the function of the elected officials was to bring an intelligent, professional and truthful tax rate to the residents. C/M Hoffman said there were several funds sitting in the CIAC Account that were not being used and Mr. Burroughs said by 1990, there will be very little funds in the CIAC Account. C/M Hoffman asked how much was in the CIAC Account at this time and Mr. Burroughs replied, approximately 2 million dollars. C/M Rohr asked why the funds would be used by 1990 and Mr. Foy said the expansion of the water treatment plant would have to be completed. He said within the next few Page 22 8/30/89-pw months, he would be before the City Council for approval to contract for the expansion of the plan. He said the project would be done with the CIAC funds. C/M Hoffman asked how much the expansion would cost and Mr. Foy replied, approximately 1.5 million dollars. C/M Hoffman asked how much CIAC fees would be generated in the next few years and Mr. Foy said approximately $500,000.00. Mayor Abramowitz said he was aware of approximately 2 million dollars which was earmarked for projects but could not be used and Mr. Foy said these funds dial not pertain to the Utilities Department. Mayor Abramowitz agreed. Mayor Abramowitz said he discussed this matter with the City Manager and City Attorney. He said if the money was not used, it would have to be returned. City Manager Kelly asked if Mayor Abramowitz was referring to the escrow funds and Mayor Abramowitz replied, yes. C/M Hoffman said he would like to find out if there was a legal defense that would allow the City to use these funds. He said this matter was constantly discussed but never pursued. City Manager Kelly said this matter was investigated and there was no legal way to defensively use the funds. He said the funds belonged to someone else and, after 7 years, the City would have to return them. He said the City was collecting interest on these funds. Mayor Abramowitz said the City has suffered and had the reputation of developers not wanting to come into the City because of past actions. He said he was pleased that this was changing; however, he would like a study done to see if the City could legally use the money. C/M Hoffman said this had nothing to do with the Utilities Budget; however, there were several things that the City needed because of future development and the funds should be used for these needs. At 12:15 P.M., Mayor Abramowitz RECESSED this meeting and RECONVENED at 1:40 P.M. with ALL PRESENT. P^ age 147 Mayor Abramowitz asked why Item 270, Benefit Options increased and Mr. Burroughs said there were no employee changes. He said the benefit options should be $4,300.00 per employee. TAPE 5 City Manager Kelly said an employee was not entitled to benefit options if they were not with the City for the first or last six months of the year. PAGE 147 Page 23 8/30/89-pw Mr. Foy said this budget included the Rock Island Road water line project. He said $300,000.00 was not included in this budget; however, it should have been. He said the City Manager was recommending that the funding be allocated. Mayor Abramowitz said this matter was discussed and it was asked if the County was mandating this project. He asked if the widening of the road was for future expansion. Mr. Foy said the widening of Rock Island Road was probably for existing and future conditions. Mayor Abramowitz asked if CIAC funds could be used for this project and Mr. Foy said water and sewer CIAC funds could be used for the expansion of future utility customers. Mayor Abramowitz said the County was mandating this project and he asked what would happen if the City did not allocate $300,000.00 for this project. Mr. Foy said he understood that the County would do the project if the City did not have the funding and bill the City for the costs. He said the City would have to provide the reimbursement in the Utility Revenue budget. Mayor Abramowitz asked if the City could repay the costs over a period of years and Mr. Foy said this occurred with the project on Commercial Boulevard. Mayor Abramowitz asked how long the City was given to repay that project and Mr. Foy said this did not occur during his tenure; however, he knew that the project was recently paid off. Mayor Abramowitz asked Mr. Foy to contact the County regarding the exact costs for the Rock Island Road project and Mr. Foy said he contacted the County regarding this matter. He said the County informed him that they were not sure of the roadway costs, let alone the costs for the utilities. Mr. Foy said the costs had to be allocated for the project and the County usually estimated the costs per mile based on their experience. He said the construction would begin August, 1990, and the Utility Companies would be contacted about the problems as soon as the preliminary plans were available. Mayor Abramowitz asked when the funds would be needed and Mr. Foy said the project would begin August, 1990; however, the Utility Department had to have the water and sewer project completed before the County began the widening of Rock Island Road. Mayor Abramowitz said as soon as the City Attorney returned, he would be calling a workshop meeting regarding the use of the CIAC funds. He said there were several things that had to be discussed and investigated. Mayor Abramowitz said the City Manager and Utilities/Engineering Director gave their interpretations; however, he would like a legal interpretation regarding the use of the CIAC funds. He Page 24 8/30/89--pw said he would be pleased if the City could release some of the financial burden of the residents for future developments. Mayor Abramowitz said the City appeared before the County Commission to have NW 64 Street taken off the Trafficways Map because it was no benefit to the City. He said the City would have been obligated to this street in the future at a cost of approximately 1.2 million dollars. He said he did not know how the County could mandate the City to do projects that would not benefit the City in the future. C/M Rohr asked what section of Rock Island Road would be widened and Mr. Foy said the road would be widened from Oakland Park Boulevard to south of Commercial Boulevard. Mr. Foy said the County felt that the City had facilities in their right-of-way that did not meet their standards. He said the County did not want the substandard material that existed creating problems once the project was completed. City Manager Kelly asked Mr. Foy what the existing material was and Mr. Foy replied, asbestos piping. C/M Rohr said the City did not have to pay for the widening of University Drive and Mr. Foy said the City spent approximately 1 million dollars for that project. C/M Rohr asked where the money came from and Mr. Foy said most of the funds were from bonds and revenue and a small portion was taken from CIAC fund for the expansion of future growth. Mayor Abramowitz asked where the bonds came from and Mr. Foy said from the 1986 Bond Issue. Mayor Abramowitz asked if there were any more funds available from this Bond Issue and Mr. Burroughs replied, approximately $500,000.00; however, the funds were earmarked for the Nob Hill Road project. Mayor Abramowitz asked what this project was and Mr. Foy said the facility for the Utilities Administrative and Maintenance Departments. He said the Utilities had to move their Maintenance Department and chemicals from the Building on NW 61 Street three years ago. He said they were temporarily located at the TUE building until the proposed facility at Land Section 7 was built. Mr. Foy said the County would be inventorying the facility to see what hazardous materials existed and a containment area would have to be provided by the Utilities Department. Mayor Abramowitz asked if Mr. Foy knew what this would cost and Mr. Foy said he did not know what the cost would be at this time because he found out about the inventory approximately two days ago. Mayor Abramowitz asked what the County requirements were for chemicals and Mr. Foy said a containment area was required to prevent contamination by spills. Page 25 8/30/89-pw Mayor Abramowitz asked how much hazardous material existed at the facility and Mr. Foy said a facility twice the size of Conference Room #1 was needed to store the material. Mayor Abramowitz asked if the construction of the facility would cost $500,000.00 and Mr. Foy said the facility would cost approximately $100,000.00 to build. Mayor Abramowitz asked when the facility at Land Section 7 was proposed to be built and Mr. Burroughs said the plans included the Public Works Department as well. Mayor Abramowitz asked if the funds for the proposed facility would come from a Bond Issue and Mr. Burroughs replied, yes. Mayor Abramowitz asked if TUW had their share of the funds for the facility and City Manager Kelly replied, yes; however, the City Council would have to decide what they would like to do about a facility for the Public Works and Utilities Departments. C/M Hoffman asked how much the facility at Land Section 7 for the Utilities Department would cost and City Manager Kelly said the City Council would have to discuss this matter during a workshop meeting. Mayor Abramowitz asked if the Utilities Department could build a facility and rent it to the Public Works Department and Mr. Burroughs replied, yes, providing the facility was big enough. Mr. Foy said he would not be pleased if the Utilities Department used the bond money to build the facility and not occupy the facility but rented it out to the Public Works Department. Mayor Abramowitz asked what could be done with the bond money if the entire amount was not used for a new Utilities facility and Mr. Foy said the legal use of the funds had to be determined. Mr. Burroughs said the balance would have to be expended for TUW projects, transferred to the sinking fund or to retire bonds. Mayor Abramowitz asked if the funds could be used for Utility projects, such as Rock Island Road and Mr. Burroughs said he would assume that this could be done. City Manager Kelly said the owner of the south portion of Land Section 7 had to be considered in this matter as well and Mayor Abramowitz said the City would have to negotiate with that owner on stipulations of acreage. City Manager Kelly holding a workshop the proposals for Complex. C/M Hoffman asked the Bond issue and would be submitted said the City Council should consider meeting in the near future concerning Public Works/Utilities Administration how much money was in the balance of Mr. Burroughs said this information shortly. C/M Hoffman suggested that the funding for the Rock Island Road project be placed in the budget, which would make the bottom line figure of this budget $1,121,610.00. 1 1 H Page 26 8/30/89--pw 1 1 1 Mayor Abramowitz asked how many employees were included in this budget and Mr. Burroughs said there were 7 full time employees and 1 part time employee. Mayor Abramowitz asked if the Utility bills were being sent bulk mail and Mr. Burroughs said the bills have always been sent pre-sorted postage. City Manager Kelly said he received several calls and complaints regarding the late penalty charge. He said there were so many complaints, he left change on his desk for those residents that came to his office to complain. Mr. Burroughs said there would be a proposal in the near future to change the penalty rate and Mr. Foy said the postage was being considered because the Utilities Department was losing revenue. Mayor Abramowitz asked when the water cut off was after a second notice and Mr. Burroughs said when the customer received a second notice, their water was cut off two weeks later if they did not pay. V/M Bender asked if it would be cheaper to hand deliver the bills and Mayor Abramowitz said the electric companies did this. C/M Hoffman said the City provided a bi-monthly bill; however, the residents were not pleased with this billing system because the bills seemed to be too high. Mr. Foy said he would prefer a bi-monthly billing system because it would save costs. Mayor Abramowitz asked if the budget could be changed without problems if the City Council received a favorable legal opinion regarding the use of CIAC funds. Mr. Burroughs said the City tax rate at the first public exceed the amount submitted Office. He said the rates the second public hearing. Page 151 Manager would announce the hearing, which could not to the County Appraiser's could only be reduced during Mayor Abramowitz asked how many employees there were in this Department and Mr. Foy replied, 13. C/M Rohr asked what Other Contractual Services included and Mr. Foy said 100 hours was used by a mechanic to take care of the telemetry system. He said in-house training was taking place to eliminate the need of outside contractors. Mayor Abramowitz suggested $5,000.00 be eliminated and the City Council agreed. V/M Bender asked why Item 430, Electricity, was increased by $10,000.00 and Mr. Foy said the electric was used for lift stations. He said the flow this year was less than the last 4 years because the rainfall was low. Page 27 8/30/89-pw TAPE 6 V/M Bender suggested that this matter be investigated because the rate structure may need to be changed. He suggested that $10,000.00 be eliminated from this budget and the City Council agreed. V/M Bender said Item 500, Repair on Lift Stations, reflected a very large increase and he asked why there was an increase in the amount of $12,000.00. Mr. Foy said this item included the maintenance and repair of the lift stations and Mr. Burroughs asked how many lift stations there were. Mr. Foy said there were 70 lift stations and V/M Bender suggested that this item be reduced by $8,000.00. Mayor Abramowitz said the City Council never denied the Departments funding for projects if it was available throughout the years, except the tree -trimming funds. He said the requests for funding had to be brought to the City Manager before they were submitted to the City Council. V/M Bender asked why Item 508 increased and Mr. Foy said this item was was under warranty until two months ago. V/M Bender asked if an extended warranty could be purchased and Mr. Foy said a one year warranty would cost approximately $18,000.00, which would not include lightening coverage. V/M Bender asked when the warranty expired and Mr. Foy replied, April, 1989. Page 152 Mayor Abramowitz asked if the new items listed were needed this year, such as Item 6PL and Mr. Foy said the lift station program was a continuing rehabilitation program. Mayor Abramowitz asked if the projects were preventative maintenance and Mr. Foy said the existing lift stations were older than 15 years, which was the expected life of the stations. He said there was electrical equipment and pumps that had to be rehabilitated. C/M Rohr asked how many lift stations were older than 15 years and Mr. Foy said 11 lift stations needed to be rehabilitated. C/M Rohr asked if 4 lift stations were repaired each year and Mr. Foy replied, yes; however, the work had to be contracted out. V/M Bender asked if the cost included a complete repair of the stations and Mr. Foy replied, yes. V/M Bender asked if the important repairs could be done immediately and the minor repairs could be done at another time. Mr. Foy said a partial repair may not be appropriate and V/M Bender suggested that 50% of the repairs be allocated. Mr. Foy said the electrical components, pumps, wet wells and check valves had to be repaired. 1 n Page 28 8/30/89--pw Mayor Abramowitz said it seemed to be better to reduce the number of lift station repairs this year than to partially repair them and V/M Bender suggested this item be investigated to determine what was actually needed. C/M Hoffman asked if fewer lift stations could be repaired this year and Mr. Foy said the lift stations were important because they eliminated the sewage from the water. Mayor Abramowitz asked how much it would cost for new lift stations and Mr. Foy said for Land Section 7, approximately $170,000.00. He said this cost included a force main and the cost would be approximately $100,000.00 without the force main. Mayor Abramowitz asked if it would be cheaper to replace the stations rather than rehabilitate them and Mr. Foy said when the repairs were done, the only old items that remained were the wet wells. Mayor Abramowitz asked if revenues were the only funds that could be used for these repairs and Mr. Foy replied, yes, because the existing lift stations wore the lift stations out. Mayor Abramowitz asked what Item 6PN, Fire Main Replacement included and Mr. Foy said a force main broke 6 months ago on NW 58 Street, east of University Drive. He said sewage was seeping into the street; therefore, the replacement was needed. Mayor Abramowitz asked what the relocation of sewage line was for on Rock Island Road and Mr. Foy said this was the replacement of the asbestos cement lines. He said the County would do this work and bill the City. C/M Hoffman said this type of billing may be better for the City if the City could pay the bill back over a 10 year period. He suggested that the repayment period be investigated. Mayor Abramowitz asked what the sewer service for Veterans Park included and Mr. Foy said a grant was expected for this project, which would be used to pay the City back for this cost. Mayor Abramowitz said so far, it was costing the City approximately $60,000.00 for a $30,000.00 grant. City Manager Kelly said restrooms were constantly being requested for Veterans Park; however, they were constantly being vandalized. Mayor Abramowitz said he never heard a resident complain regarding lack of restrooms at Veterans Park and C/M Rohr had concerns with vandalism costing the City more money. Mayor Abramowitz asked if there was a time limit for using the grant funds and Dina McDermott, Assistant to the City Manager, said every grant had a specified time limit for its usage, which was usually one year. Mr. Foy said the Public Works Director informed him that the grant funds had to be used by December 1, 1989. He said the project was presently out to bid. Page 29 8/30/89-pw Mrs. McDermott said if the grants funds were not used by the specified time, the monies as well as the interest earned on the funds had to be returned to the State. Mayor Abramowitz asked if the restrooms would be open 24 hours per day and City Manager Kelly said the Parks and Recreation Department would make this determination. Mayor Abramowitz said the restrooms would have to be maintained and he did not agree that they should remain open 24 hours. City Manager Kelly said the restrooms could be closed at a specific time; however, personnel would have to be assigned to maintain them. He said the City had a reputation for not using State allocated funds and he would like to see this change. He said the City has been denied needed funds in the past because of this reputation. Mayor Abramowitz said he wanted to see the City being more selective of the grants they were accepting. He said he was more concerned with the maintenance and operations of the restrooms at Veterans Park than he was with receiving grant monies for the project. C/M Rohr said he was concerned that the facilities would not be treated appropriately and City Manager Kelly said there have been health concern regarding people using the canal as a restroom. Mayor Abramowitz said if a restroom was provided, a person in a boat would not be getting out of it to use the facility. C/M Hoffman said if he would have known about the added costs for the restrooms, he would never approved the acceptance of the grant; however, the project should be completed since it went this far. He said the restrooms should be open only when the park was open. C/M Rohr said the City would be incurring large costs for the maintenance and operation of the restrooms and this concerned him because not many people used the park. C/M Hoffman said the City Council should have considered this matter before accepting the grant for the restrooms and C/M Rohr said he would agree to giving the grant monies back if it was going to cost the City more than the grant was worth. Mayor Abramowitz said he would vote against the project; however, he did not want the City to be refused future State grants and C/M Rohr said if the City had a legitimate reason for the use of the grant monies, the State would not refuse them in the future. Mayor Abramowitz said the City of Lauderhill was very upset with Tamarac because Tamarac was not fulfilling its agreement of the joint fund. Mr. Foy said the Fire Department has been trying to get a fire hydrant on that side of the street and Mayor Abramowitz asked if CTAC funds could be used for part of this project. Mr. Foy said there were no future customers in the area. n 1 Page 30 8/30/89-pw C/M Hoffman asked why a fire hydrant was needed in the area and Mr. Foy said the Fire Department wanted the hydrant available in case there was a fire. C/M Hoffman suggested that the project be completed and Mayor Abramowitz suggested that this matter be reviewed further. Mayor Abramowitz said the budget contained several items involving telemetry systems and pump stations and C/M Hoffman said this budget would complete the capital expenditure for the telemetry system for the remaining lift stations. Mayor Abramowitz asked how the City was operating without the system and Mr. Foy said there were operators sent out every day to monitor the lift stations. He said the telemetry system would assist the Department by allowing the existing operators to do other needed projects. Mayor Abramowitz asked if the personnel costs would decrease when the telemetry system was installed and Mr. Foy said not immediately because the existing personnel would be used for other projects that were not presently being done. Mayor Abramowitz asked how many lift stations received the telemetry system last year and Mr. Foy replied that the City Council approved 20 installations when they approved the purchase of the radios. He said the project was expected to begin very soon. Mayor Abramowitz said he was not in favor of providing things that were not needed for 15 years and he asked if the project was absolutely necessary this year. Mr. Foy replied, yes, because it gave the Utilities Department the ability to appropriately monitor the stations. He said the project would also assist in preventing sewage from flowing onto the streets. Mayor Abramowitz asked if sewage would be on the streets without the system and Mr. Foy said there was no guarantee that the system would prevent this; however, the probability was that it would not occur with the system. Mayor Abramowitz recommended that this item be eliminated from the budget because the City was not in a position to do the project within two years. He said this project should be allocated over several years. Mr. Foy said he would prefer doing half of the project as opposed to none of it and C/M Hoffman asked if more monitoring systems would be needed for the expansion. Mr. Foy said the existing monitors would be used for the expansion. Mayor Abramowitz suggested that half of the project be done this year; therefore, this budget would be reduced from $34,000.00 to $42,000.00. Page 153 V/M Bender asked why Item 442, Treatment Capacity Fee was increased and Mr. Foy said this was for the leased capacity in the County's 201 program. Page 31 8/30/89-pw Mayor Abramowitz asked how much the City paid for the capacity and Mr. Foy said he did not have this information available. Mayor Abramowitz asked that information be submitted to the City Council regarding the amount the City paid in the last 5 years and Mr. Foy said the County's rates increased by 10%. Mayor Abramowitz asked if Last year's expenditures were available and Mrs. McDermott said for Fiscal Year 1987/88 the costs were $903,303.00. Mayor Abramowitz asked if 10% should be added to this cost and Mr. Foy said the rate for transmission was increased by 24% and the rate for treatment increased by 10%. Mayor Abramowitz suggested that this item be reduced by $40,000.00 and the City Council agreed. Mayor Abramowitz asked if the City was going to be considered this year for capacity and Mr. Foy said in 1991, the City would own 7.04 MGD capacity; however, a square one payment would be required. Mayor Abramowitz asked if the payment would be for Deerfield Beach and Fort Lauderdale and Mr. Foy replied, yes. He said the City leased 2 million gallons of treatment from Pompano Beach and 1 million gallons of treatment and 1 million gallons of transmission from Deerfield Beach. He said Pompano Beach received more money than Deerfield Beach. He said the CIAC funds were used for a portion of the capacity. Page 154 Mr. Burroughs said this was a backcharge for projects of TUE and Mayor Abramowitz said V/M Bender informed the City Council that Florida Power & Light owed the City money for work the Utilities Department did for them. Mr. Foy agreed. Mr. Foy said V/M Bender submitted four invoices and one was several years old. He said the City Attorney was asked to investigate this matter to see why Florida Power & Light was not paying their bills. He said the Finance Department has tried to collect these fees from Florida Power & Light several times but has been unsuccessful. Mayor Abramowitz asked if the City was required to do Florida Power & Light's work and Mr. Foy said Florida Power & Light cut through the City's sewer lines, which had to be repaired. Mayor Abramowitz asked if Florida Power & Light needed permits to work in the City and Mr. Foy replied, yes. C/M Hoffman asked if the City could request a bond from Florida Power & Light before they were given a permit and Mr. Foy said the City had an agreement with Florida Power & Light, which provided that there would be no charge for permits. Mayor Abramowitz asked if the residents would have their water supply turned off if they did not pay their bills and Mr. Foy replied, yes. Mayor Abramowitz said the Page 32 8/30/89-pw Utilities Department should act on this matter to get Florida Power & Light to pay their outstanding bills. Mr. Foy said the outstanding bills were approximately $500.00; however, the City could deny Florida Power & Light a permit until their outstanding bills were paid. C/M Hoffman said he did not want to detain Florida Power & Light from doing their job; however, he did not want the City waiting 3 years to receive their monies from Florida Power & Light. He suggested that this matter be investigated to see if the City could require a bond from Florida Power & Light for their projects. Mr. Foy said he was not aware the Florida Power & Light was not paying their bills; however, future permits could be denied until they paid their outstanding bills. Page 156 Mr. Burroughs said this budget was transfers, which were required because of bond indentures or agreements with various agencies. C/M Hoffman asked if $50,000.00 could be eliminated from this budget and Mr. Foy said the funds were needed for emergencies. V/M Bender said the City Council could approve the funds at the time of the emergency and he suggested that $50,000.00 be eliminated from this budget. The City Council agreed. ----------------------------------------------------------------- At this time, the City Council agreed to hold a workshop meeting tomorrow (August 31, 1989) at 1:00 P.M. City Manager Kelly said the City Clerk informed him that there was a misunderstanding in the budget concerning the Employee SunDial. He said there was approximately $1,850.00 needed for the SunDial and he felt that it was needed for the employees. The City Council agreed to allocate $1,850.00 for this item. With no further business, Mayor Abramowitz ADJOURNED this meeting at 4:30 P.M. OL A. EVANS, CITY CLERK "This public document was promulgated at a cost of $302.20 or $37.78 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 33 I� L -1 TO: FROM. SUBJECT: DATE: COPIES: CITY OF TAMARAC INTEROFFICE MEMORANDUM 8908-7401 John Kelly, City Manager Susan M. Tillman, Risk Management Consultant INSURANCE OPTIONS AND RECOMMENDATION FOR FISCAL YEAR 89-90 August 29, 1989 After reviewing the City of Tamarac's loss history over the past ten years, it is apparant that claims have been low and the proportionate amount of premiums paid compared to claims paid is extraordinary. The claims referred to are general liability which include claims filed against the City for the negligence of its employees, auto liability claims and excess liability claims (claims for catastrophic losses) . From 1979 to 1989, $179,000 was paid out by the City for the above mentioned type claims. Of that $179,000, $59,000 were police liability claims. Since the City no longer maintains a police force, it is fair to subtract out those police claims from the above picture and figure that over the past ten years, the City has paid an average of $12,000 in claims per year. During those years, the City probably paid between $200,000 to $350,000 per year in premium dollars. On the low side, the City paid out $2,000,000 in premiums over the past ten years. On the high side, the City may have paid out $3,000,000 in premium dollars for general liability claims. Out of that amount, only $179,000 was actually paid in claims. It appears reasonable, in view of the above, that the City of Tamarac seek alternate methods to preserve its own assets in the process of insuring the City against losses. Governmental entities are governed by sovereign immunity per Florida Statute 768.28. Per this statute, a governmental entity can only be liable up to $100/200,000 for torts. In order to collect more than this'statutory amount, an individual must get a claims bill through the legislature or obtain a judgment from Federal Court. A claims bill or a federal judgment would probably take between two to three years to obtain. u.w F�.a .�.;ww;•: w;. .. Fire and Extended General Liability Police and Fire Accident Money and Securities Flood Insurance TOTAL NEW COST: Gallagher Fee Workers' Comp. Premium Gallagher Bassett Fee Workers' Compensation State Assessment Total Insurance Cost Amount Budgeted for Insurance 1989-90 Utility Contribution Tb Insurance Fund INTEROFFICE MEMORANDUM: 8908-7401 INSURANCE OPTIONS AND RECOMMENDATION FOR FISCAL YR. 89-90 August 29, 1989 Page 2 It is therefore recommended that the City of Tamarac begin a loss fund for general liability. There is presently $449,000 in the Workers' Compensation loss fund. Workers' fund losses have averaged $220,000 for the past four years., $50,000 more is budgeted this year to be put into this Workers' Compensation fund. That would bring the Workers' Compensation fund to $500,000. If $250,000 of the Workers' Compensation fund was transferred to a general liability loss fund, from which claims could be paid, then the City of Tamarac could look to save approximately $292,000 this year from its present insurance budget. Below is an explanation of same: TYPE OF PRESENT INSURANCE BUDGETED COST Equipment Insurance $3,000 Police Professional 5,700 Medical Malpractice 49,000 Public Officials 45,000 Employees and Officials Bond 8,540 50,00 150,000 3,20,00 2,500 2,500 550 0 8,400 8 400 $447,000 163,900 NDT COST $163,900 10,000 30,000 15,000 15,000 $233,900 0-Inc. under fire and extended 0 0-incl. under general liab. 0-incl. under general liab. approx. $3,000 $447,440 -233,900 (insurance cost) =213,940 +80,000 293,540 The above reductions in premiums were accomplished by increasing the City's deductible amount in each line of coverage. General liability camaz�.$100,000. One million dollars,in coverage was then purchased above the $100,000. Fire and extended coverage deductible was also raised from $2,500 to $100,000. 1 r L