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HomeMy WebLinkAbout1987-08-24 - City Commission Budget Workshop Meeting Minutesa MAIL REPLY TO: P.O. BOX 25010 TAMARAC, FLORIDA 33320 5811 NORTHWEST 88TH AVENUE TAMARAC, FLORIDA 33321 1 TELEPHONE (305) 722-5900 NOTICE OF CITY COUNCIL BUDGET WORKSHOP MEETING TAMARAC, FLORIDA There will be a City council Budget Workshop meeting at 10:00 A.M. on Monday, August 24, 1987, in the West Conference Room of City Hall, 5811 NW 88th Avenue, Tamarac, to discuss the budget for Utilities. 0 All meetings are open to the public. Carol E. Barbuto City Clerk AN EQUAL OPPORTUNITY EMPLOYER POLICY OF NONDISCRIMINATION ON THE BASIS OF HANDICAPPED STATUS CITY OF TAMARAC CITY COUNCIL WORKSHOP MEETING MONDAY, AUGUST 24, 1987 TAPE 1 'TO ORDER: Mayor Hart Called this Budget Workshop Meeting to Order on Monday, August 24, 1987, at 10:00 A.M. in the West Conference Room. CALL: Mayor Bernard Hart vice Mayor Sydney Stein Councilman Henry Rohr Councilman Bruce Hoffman Councilman Jack Stelzer ALSO PRESENT: John P. Kelly, City Manager Ken Burroughs, Finance Director Bill Greenwood, Utilities/ Engineering Director Pauline Walaszek, Secretary UTILITIES DEPARTMENT City Manager Kelly said the Tamarac Utilities East (TUE) 13udget said the system needs many improvements and the residents could not afford to pay for the improvements. He said the improvements would require a 43% in- crease in the rates. lie said the budget being presented would be without the increase and it would be Council's decision as to what improvements would be granted. lie said his recommendation would be for a 20% increase in the area, which would be about $4.25. He said the increase would not get all the improvements done, however, subsidizing or selling the property could be alternatives. Ile said be would have to go out and meet with people to inform them of the improvements, Aayor Hart said he had received a letter from Senator Weinstein stating h,_� was organizing their next agenda which would include the possibility of the City of Tamarac obtaining grants. City Manager Kelly said Broward County had targeted some.grants, however, TUE had not been one of the areas. He said there may be a chance that some funding throughout the year may become available. Bill Greenwood, Utilities/Engineering Director, said no bedroom community in the past had been able to support itself taxwise or utilitywise. He said there had been dicussion of selling or giving TUE to Fort Lauderdale so they could intermingle with their larger commercial type base. lie said the other possibilities that had been suggested were the possibility of Tamarac Utilities West (TUW) buying TUE putting it into a larger base. He said Fort Lauderdale had indicated to the City Manager that they were not interested. He said the Fort Lauderdale costs were increasing on water and wastewater to 5%. He said the estimated capital improvements two years ago were $85,000.00 per year. Ile said 1800 foot of sewer line at TUE was leak- ing terribly and the only way to repair it would be with a fiberglass type lining system which would run $100.00 per foot. He said all the water that comes into the system from Fort Lauderdale has been metered and all the wastewater goes out; therefore, there was a considerable amount of water going out with the wastewater because of the leaks. He said there had been $20,715.00 in unexpended funds and without a rate increase there would be $28,000.00, however, with a rate increase the amount would be $71,009-00. Rohr asked how much money would be needed per year and Mr C Greenwood repliede $85,000.00 per year. PAGE 1 8/24/87/pw C/14 Rohr asked how long it would take for the repairs and Mr. Greenwood replied, 5 years. C/DI Rohr asked if repairs would be done for the $71,000.00 and Mr. Greenwood replied, yes, if the rates were increased. C/M Rohr said if there would be no money spent for repairs this year, TUS would be further behind next year unless there were grants. Mr. Greenwood said it had been discussed that with some of the money from the selling of the old City Hall and Public Works buildings, a fund would be made for the repairs and maintained by the rate increase. C/11 Hoffman asked what would happen to TUW if they were to buy TUE and Mr. Greenwood said with TUW having a bigger population, they would be able to absorb the costs. v/m stein said there had been $150,000.00 in the reserve, however, it was returned to the people as excess. C/M Hoffman asked if there were money to spend on all the repairs at one time, how much would be needed and Mr. Greenwood replied, $500,000-00. C/114 Hoffman asked if the amount would be too little to consider a bond issue and Mr. Greenwood replied, yes. C/M Stelzer said the only solution would be to wait until the buildings were sold and contribute the money into a fund. Mr. Greenwood said the Growth Management Act was forcing each municipality to submit a 15 year Capital improvements Program which goes into a Growth Management Plan. He said the Growth Management Plan would inform the State and Federal Goverments of the Cities Financial Status. Mayor Hart said at the Budget Hearings, TUE residents would probably not attend and asked City Managar Kelly if there could be a Public Hearing held at one of Clubhouses at the east section, so the east residents would know of the TUE situation and input their opinions. City Manager said there would be no problem with having a Public Hearing I at one of the east clubhouses. CAI Stelzer asked if there were anyone east of 441, who is not in Tamarac, using the facility and Mr. Greenwood replied, yes. V/M Stein said there was a 20% rate increase and it would be fair to inform the cast side of why the increase was needed. Mr. Greenwood said there had been dicussions regarding going back to bi- monthly billing which would save $15,000.00 to $20,000-00. V/M Stein said when the east side went to bi-monthly billing in the past, they had a problem paying their bills. Charlotte Bouchard, Utilities Supervisor, said the east side had been on bi-monthly billing for 10 years, at one time. C/M Stelzer referred to TUW and said the revenues did not reflect any increases. He said in order to reflect repairs, there would need to be �1,003,000.00 which would be a rate increase of 50%. v/M Stein said with the increase of people there should be an increase in revenues and he did not see any increases. Mr. Greenwood said 900 ERCIs were placed on the CIAC Funds. He said the developer comes in and pays the CIAC and one part of the developer's agree - PAGE 2 8/24/87/pw ment was that he paid guaranteed revenue on water and wastewater. He said what the developer would actually being paying for is the debt service charge and the service availability rate. He said as the developments go on line the only additional income would be the consumption charge and based upon a conservative $648,000.00 as the estimated increase instead of the actual of last year of $900,000.00, the anticipated revenue on a gallon each figure, would be sl,000.00. lie said the per gallon charge would be the lowest part of the total charge. He said the revenue in the proposed years should be higher and the expenses should be lower. He said the numbers in the budget are very realistic and based on the best data avail- able. He said there was an anticipated increase on income of �200,000.00 at the end of the year. Mr. Greenwood, referring to TUW Expense Budget, said line item 362 would be water and sewer combined services. He said 50% would be for the water department and 50% for sewer department. He said with the closing of the Sewage Treatment Plants this fiscal year there were positions, such as a Superintendent of plants who took care of water and wastewater, which had been tranferred from line item 362 and placed back into water treatment. Ile said the QACQ Officer, Laboratory Technician and other personnel who had worked 50% in the water treatment plant and 50% in the sewage treatment plant had been transferred to the water treatment plant or other depart- ments. He said the net decrease on the utility staff would be 5 personnel. TAPE 2 C/M Stelzer asked Mr. Greenwood to explain line item 402, travel expenses, and Mr. Greenwood said the American Water Works Association, Water Pol- lution Control Federation, 2 annual conferences and certification for the employees, which had been mandated by the State for water works personnel, would be included in line item 402. lie said there had been accounting changes which would be the Renewal and Replacement Account and the General Reserve Account which had been used for expenses, however, the expenses are now within line item 425, Operations and Maintenance Budget. lie said another major accounting change would be for a square one &!bt service. lie said the City owes Broward County $2,237,000.00 for the square one debt service for the regional 201 as of January 1, 1992. He said there had been discussions on funding square one debt service and one way would be to split out and allocate the debt service between existing customers and the proposed customers. He said the split out had been made and it would be 64.4% towards the revenue account share and 35.4%. He said what would be done was allocating costs for the projects to the existing customers for the facilities they will be using and to developers for their reserved capacity. He said existing customers would not be paying for reserve capa- city that had been built. He said 1.9 million had been allocated to the revenue fund and another million to the CIAC fund which would pay their proposed share. lie said there could be a possibility of floating addi- tional bonds late in 1991 for that amount and/or setting up a sinking fund, which had been based upon 51 monthly payments, with monthly deposits. He said there had been substantial costs that have increased, such as, taxes which increased $88,000.00, insurance which increased $25,750.00, data processing which increased $51,000.00, fleet maintenance which increased $54,000.00 and purchasing which increased $14,000.00. V/14 Stein asked how much revenue would be going to plant operations and how much would be going to debt services and Mr. Greenwood replied, $254,000,000.00 for debt service. He said plant operations and maintenance would be in the amount of $5,000,000.00. CIM Stelzer referring to Water Treatment Department Budget, said the salaries were increased. Mr. Greenwood said the salaries were increased because of the transfers discussed previously. PAGE 3 8/24/87/pw V C/M Stelzer asked Mr. Greenwood to explain the contractual services for $8,000.00 and Mr. Greenwood said with more specialized equipment, there would be a need for additional service contracts required because in-house expertise could not be afforded. City Manager Kelly asked Mr. Greenwood to explain the history of operating permits and Mr. Greenwood said operating permits used to be a small item, however, within the last two years, the permits were increased. He said water withdrawal permits used to be 10 year permits which had been de- creased to a 5 year permit and recently decreased to a 2 year permit. lie said each one of the agencies were allocating their costs for the more astringent regulations by adding the cost. He said the cost would be $7,000-00 and the cost would be escalating. V/M Stein asked why the electricity had been increased and Mr. Greenwood said the Tract 27 tank and pump station had recently been applied, which had 200 horsepower motors. He said a new 200 horsepower 3,000 gallon permitted high service pumps had also been applied. He said the new water treatment plant was being expanded which would also reflect the cost of the electricity. C/14 Hoffman asked why the chemical costs had increased $70,000.00 and Mr. Greenwood said the prices were being increased by 8% to lo% plus an in- crease in the water usage. CIM Rohr asked why there had been an increase in Utilities travel and seminars and Mr. Greenwood said Utilities would be a very sophisticated technical typ-, of facility mandated by EPA's Clean Water Act and the State. lie said each one of the operators were required to be licensed. C/M Stelzer referred to the transmission and distribution. Mr. Greenwood said the salaries had increased. lie said the capital had been decreased or had not been funded. lie said the salaries had increased because one man would be transferred from line item 362, as discussed previously. C/T,l Stelzer asked Mr. Greenwood to explain line item 505, which reflected a $40,003.00 repair service and Mr. Greenwood said the City had not imple- mented in the past the meter exchange program over a 10 year period. lie said the program had been implemented recently by installing backload pro - venters on single family homes. lie said there would be testing, replacing and installing 325 meters at an estimated cost of $35.00 per each meter which would be done this year. V/m Stein asked how many meters were already installed and Charlotte Bouchard, Utilities Suparvisor, replied, 15,000. C/M Stelzer asked Mr. Greenwood to explain line item 310, Professional Services and Mr. Greenwood said a required annual report, safe keeping fees for treasury bills, Barnett Bank, Wells Fargo pickup, modifications to the billing system, clerical assistant and City consulting Attorney services would be included into this item. C/M Stelzer asked why the postage had been increased and mrs. Bouchard said because the monthly billing had been enacted, the postage had increased. City Manager Kelly said a substantial amount of money would be saved if the City returned to the bi-monthly billing. C/M Stelzer asked Mr. Greenwood to explain line 315, Wastewater Agreem�nt and Lease Capacity Agreement. Mr. Greenwood said Council and the Consul- tants had investigated if the plant should be rehabilitated or if a now plant should be built in Land Section 7. lie said the cost would reflect PAGE 4 3/24/87/pw the old in-house sewage trQatment plant to paying the County's cost. lie said the $977,500-00 would strictly be for treatment and transmission cost. He said the agreem3nts that were negotiated with other municipalities would be to lease their excess capacity, however, the County did not want to lease any of their capacity because the County did not have any capacity. Ile said the only way Tamarac could go RegionL.1 201 would be to lease the capacity. He said all of the Agreements were similar and one stipulation in the agreements would be that Tamarac did not get the credit for the debt service payment in the amount of $411,680.00. He said the developers were paying their share of the reserve capacity. He said line item 315 will change every year until the end of 1991. c/m Stelzer, referring to Page 42, asked mr. Greenwood to explain the larg,�a items and Mr. Greenwood said the in lieu of tax item had been provided for by bond documents. He said the sinking fund had been decreased because the CIAC should be paying for the reserved capacity. Ile said the transfer to square one debt service would the sinking fund due January It 1938, as discussed previously. Ile said the northwest force main transfer grant pro- ject replacement fund had stipulations madated by the State. He said the Federal and State Governments would only give a municipality a grant for a project once. He said the Governments require the City to estimate the project and set up a fund for 40 years and the fund could not be used unless there ware changes in the permit conditions and upgrading pump station conditions due to emergencies, such as a hurricane. V/M stein said he had contacted Tallahassee regarding the grants and the purpose of the fund would be to pay back the grant within the 40 year limit. c/m Stelzer asked Mr. Greenwood to explain the CIAC Funds and Mr. Greenwood said the income reflected had been based upon Hazen & Sawyer's new CIAC report preliminary, which would be submitted to Council within the next week. lie said the projections of income would be based upon 643 equivalent residental connections this year even though 900 connections bad been done this year. C/m Stelzer asked if the CIAC rates were increasing and Mr. Greenwood re- plied, yes. Mr. Greenwood, referring to Page 71, said the projects �hich were listed had been strongly recommended to the City Manager. He said midway Walls would be a carry over project, Nob Hill road water line extension was an on going project and the pump Stations would be a carry over project. Clm Stelzer aslncd Mr. Greenwood what he would recommend be increased or decreased and Mr. Greenwood said the last data indicated a deficit of 3.9% with the proposed budget. lie said other improvements were needed and Other capital would be needed to bring the proposed budget down. He said 14% would be needed, however, after an informal dicussion with Staff, it had been suggested a 10% increase would be needed to pay for needed capital and to stay with the required 5 year and 15 year capital improvements program. C/M Stelzer asked Mr. Greenwood what would be needed to stay in the limits of the capital improvement program and Mr. Greenwood said $23,000-00 would be for a complete software packet that would integrate all of the depart- ments with data processing. He said there were 6 existing filters which 2 had been rehabilitated last year and 2 were being rehabilitated at this time. .ie said the remaining 2 would need to be rehabilitated in ordar to stay with the 5 year capital program. C114 Stelzer asked Mr. Greenwood what vehicles wore needed and Mr. Greenwood said at present, utilities had been using only one dump truck and an.addi- tional dump truck and trailer would be needed to transport the backup. PAGE 5 8/24/87/pw TAPE 3 Mr. Greenwood said f ire hydrants in other existing developments did not meet existing code requirements for spacing. Ile said in order to bring the fire hydrants up to standards within a 5 year period, would cost $1,250,003.00. VIM Hoffman asked if there was State money available for the fire hydrant repairs and Mr. Greenwood replied, no. V/M Stein asked if'the insurance Fund had any money for the repairs and Mr. Greenwood replied, no. Mayor Hart asked what would be needed for this year as far as increases and Mr. Greenwood said the deficit was 3.9% and to meet the coverage there would be a rate increase of 12% to 14%. V/M Stein said he would like the City Manager to give Council a report re- garding what would be need in this budget, however, he would like to see this budget stay as it is, if possible. Ken Burroughs said the estimates given from the departments were close to accurate. V/M Stein said at this time, 'the City would have to concentrate on what would be needed to stay ahead and when the monies were available to update the programs, they would be updated. With no further questions or discussions, Mayor Hart adjournad the Workshop Meeting at 12:30 P.M9 CAROL E. BARBUTO, CITY CLERK is This Public document was promulgated at a cost of $129.150oi-$3.60 per copy to inform the general public and public officers and employees of recent opinion and considerations by the City Council of the City of Tamarac. 3 PAGE 6 8/24/87/pw I a a