HomeMy WebLinkAbout1988-08-23 - City Commission Budget Workshop Meeting MinutesaF rA-y
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7525 NORTHWEST 88TH AVENUE 0 TAMARAC, FLORIDA 33321-2401
TELEPHONE (305) 722-5900
August 22, 1988
NOTICE OF
CITY COUNCIL, BUDGET WORKSHOP MEETING
There will be a City Council Budget Workshop Meeting on
Tuesday, August 23, 1988 at 2:00 p.m. in Conference Room #1
(Room 103) at City Hall, 7525 N.W. 88th Avenue, Tamarac,
Florida to review the Utilities budget:
411 All meetings are open to the public.
CEB/nr
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
TUESDAY, AUGUST 23, 1988
CALL TO ORDER: Mayor Abramowitz called this Budget Workshop meeting
to Order on Tuesday, August 23, 1988 at 2:00 P.M. in Conference Room
*1 (City Clerk's Office).
PRESENT:
Mayor Norman Abramowitz
Vice Mayor Jack Stelzer
Councilman Dr. H. Larry Bender
Councilman Bruce Hoffman
Councilman Henry Rohr
ALSO PRESENT:
John P. Kelly, City Manager
Ken Burroughs, Finance Director
Robert Foy, Director of Utilities/
Engineering
Pauline Walaszek, Special Services
Secretary
PAGE F-1
City Manager Kelly said in reviewing the Budget, he had
tremendous cooperation from Bob Foy, Director of
Utilities/Engineering. He said this was Mr. Foy's first
Budget as the Director and he commends Mr. Foy for doing
such a great job. He said the Budget would reflect the
Revenue Projects for next year.
PAGE F-2
Mayor Abramowitz asked why the estimated figures for
Fiscal Year 1987/88 were 80% less for Fiscal Year 1988/89
and Mr. Burroughs, Finance Director, said last year,.the
project of rehabilitating the lift station was large and
there were monies for Fiscal Year 1986/87 that were
transferred to Fiscal Year 1987/88. Mr. Burroughs said
those monies have been used except for $131,000.00.
PAGE F-- 3
City Manager Kelly said this page reflected the
operations of Tamarac Utilities West and Mr. Burroughs
said there were no personnel in this Budget.
C/M Rohr asked if Fort Lauderdale increased their rates
and Mr. Foy said within the last few months, Fort
Lauderdale did increase their rates.
V/M Stelzer said Professional Services indicated that
$2,500.00 was spent; however, $5,000.00 was allotted for
the year. He said last year's expenditures or revenues
were not reflected throughout the Budget. He said the
City Council should be informed of the expenditures for
the year to date. He said he would like to get the
answers to his questions personally from Mr. Burroughs
before bringing the questions to the City Council.
Mayor Abramowitz said if the City Council did not feel
comfortable with the Budget figures, they should ask
questions.
Page 1
8/23/88 - Workshop
V/M Stelzer asked if there would be another Workshop
meeting for the Utilities Department and City Manager
Kelly said the Final Budget Package should be drafted
soon. V/M Stelzer said he would like to have another
Workshop because there were questions that he had and he
would like to discuss them with Mr. Burroughs.
Mayor Abramowitz said another Workshop on Utilities
should not be called; however, if needed, another
Workshop would be called.
V/M Stelzer asked if the Budget was mostly computerized
figures as opposed to being done manually and Mr. Foy
replied, no.
V/M Stelzer said the electric bill for July, 1988, was
$471.00 -and he asked if it was good policy to estimate
each month's electric bill at $500.00 per month. Mr. Foy
said this seemed to be the logical way to estimate the
bills.
V/M Stelzer said if the Budget is estimated this way, he
did not want to see it handled this way. He said the
estimated figures may be wrong resulting in the City
paying more than expected.
Mayor Abramowitz said it was almost impossible to
estimate the figures exactly and V/M Stelzer said the
revenues should be decreased and the expenditures
increased to avoid problems in the future.
City Manager Kelly said V/M Stelzer and Mr. Burroughs
were both correct in figuring the Budget and he would
agree with each expert.
Mayor Abramowitz said he did not disagree with the
professionals. He said he agreed with V/M Stelzer's way
of figuring; however, Mr. Foy's figures came very close
to Mr. Burroughs's figures. He said the figures were
estimated through different philosophies and the City
Council was reviewing the Budget to determine if the
figures were correct.
Mr. Burroughs said the Budget contained approximately 3
thousand Accounts and it would take a genius to figure
each account exactly. He said in March, 1988, he started
the Budget procedure and he asked each Department to
estimate their Budget. He said the former Director of
Utilities/Engineering, Bill Greenwood, did the estimating
for Fiscal Year 1988/89; therefore, he had no reason to
question those anticipated expenses in the Budget.
V/M Stelzer said he has reason to question the estimates;
however, he has time to find those answers. He said he
has been working with Budgets for 16 years and he goes
through each account.
V/M Stelzer, referring to the cashier's report, said
Account 664 on Page F-4 indicated a figure year to date
of $197,000.00 with $89,000 incumbrance. He said in
July, 1988, $197,000.00 was spent and $35,000.00 was
expected to be spent at the end of the year. He asked
why there was $230,000.00 estimated for expenditures at
the end of the year.
Page 2
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8/23/88 - Workshop
Mr. Burroughs said he could not estimate the expenditures
for one year and V/M Stelzer said an incumbrance of
$197,000.00 should not be reflected for one year and
$230,000.00 should not be estimated as expenditures for
the year.
Mr. Burroughs said these figures were estimated by the
costs involved in the big project last year and V/M
Stelzer said the estimates and revenues should not be as
they are listed.
C/M Rohr had concerns with how the final budget would be
affected if there were errors in estimating the revenues
and encumbrances. He asked if these errors would put the
Department in a bind or give the City a greater surplus.
V/M Stelzer said the profits would be increased by these
errors and C/M Rohr said if there were more profits, the
monies would be carried over into the next year.
V/M Stelzer said TUE's gross encumbrance for last year
was $260,000.00. He said the rates last year were
increased 15% and there was a profit of 10% already in
the Budget for this year.
V/M Stelzer said the figures should not be over estimated
and Mayor Abramowitz agreed.
Mayor Abramowitz asked if V/M Stelzer's concerns were
valid and Mr. Burroughs said he feel that the City would
be getting a higher profit.
Mr. Burroughs said last year, the City was fighting to
find some encumbrance so the rates were raised; however,
this year it was reversed. He said the City Council had
to decide if the rates should be reduced or the extra
monies should be used for projects. He said the Budget
from Pages 1 to 99 had 40 million dollars indicated and
he could not change the figures for April, 1988, to
August 23, 1988. He said if he was off in figuring by
40% out of 40 million dollars, that was not bad.
V/M Stelzer said in reviewing the revenue, he found a
profit of $15,000.00. He said in 1986, the City needed
$30,000.00 and, after raising rates, 1987 indicated a
profit of 15%. He said 1988 would give the City an even
bigger profit. He said he analyzed the expenses and he
felt the profits would be too high in Utilities. He said
he was not happy with the figures because they would be
constantly increasing the profits.
Mayor Abramowitz said the profits could be used on
several projects needed in the City and V/M Stelzer
agreed. V/M Stelzer said if the City was going to
continue receiving the profits, the rates should be
decreased.
Mayor Abramowitz said
if the former Director
of
Utilities/Engineering
and Mr. Foy agreed to
estimated and submitted
the figures, the Budget
this Budget
should not
be changed if there was
not a big difference
in the
figures. He said Mr.
Burroughs agreed with
the figures
and the City did not have
time to change the
Budget over
a few dollars.
Page 3
8/23/88 - Workshop
City Manager Kelly asked how many Departments had to
revise their Budgets and Mr. Burroughs said he accepted
most of the recommended Budgets unless they were way off
in their figures.
Mr. Burroughs said the Departments were not responsible
for their Budgets in the prior years; therefore, he
worked with each Department regarding their knowledge
with the Budget and the amount of money they needed.
City Manager Kelly said Mr. Burroughs required each
Department Head to be involved with their Budget and with
the estimation. He said during his review of the
Utilities Budget, he found that there would be a surplus
and the City Council would have to decide what to do with
the money. He said he asked Mr. Foy to prepare
information on how the monies could be spent.
C/M Hoffman asked how much money was in the surplus and
how the money could legally be spent.
C/M Bender suggested the City Council review TUW's Budget
before deciding where to spend the surplus.
C/M Hoffman said he would like an answer to his question
and Mr. Foy said there were several projects that needed
to be completed such as sewer line repairs.
Mr. Burroughs said the City would be going into Fiscal
Year 1988/89 with a surplus of 1.5 million dollars. C/M
Hoffman asked if the money could be spent and Mr..
Burroughs replied on Utility Projects.
Mayor Abramowitz said there were several projects needed
in the City and he would like a list of priorities to
determine where the surplus should be used.
The City Council discussed the possibility of decreasing
the debt service and Mr. Foy said if the debt service was
reduced to $1.75 per month, this would reduce the surplus
for TUW.
C/M Rohr said if the rates were left as they are, there
would be a surplus next year and Mr. Burroughs said
Utilities should break even because of the needed
projects.
Referring to a list of needed projects, C/M Rohr asked
how long it would take to complete the list and Mr. Foy
said the list could be completed in 3 years.
Mayor Abramowitz asked if the monies needed for the
projects could be obtained without using the surplus and
Mr. Burroughs said the only way the money could be
obtained without using the surplus was Bonds.
V/M Stelzer said getting Bonds was not good because the
residents would be the people paying for the bonds. He
had concerns with the new residents having to pay for
Bonds that were approved and being paid by the old
residents.
Mayor Abramowitz said the new residents would always end
up paying for debts accumulated by the old residents;
however, the new residents were using the projects that
the monies were spent for.
Page 4
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8/23/88 - Workshop
C/M Rohr said he did not agree with asking the residents
to pay for additional Bonds.
Mayor Abramowitz said he was terrified to reduce the
rates to a point where the City was not receiving any
surplus. He said it was a good business practice to keep
some surplus because the money could be spent on needed
projects.
V/M Stelzer said the surplus may not be there every year;
therefore, the reduction of rates may not be feasible
because of the possibility of fluctuation year to year of
the rates.
Mayor Abramowitz said if the debt services were reduced
by $1.75, the surplus would be reduced by $1,000,000.00.
He said Lf the debt service remained at this reduction
for the next year, the same amount of surplus would be
lost.
C/M Rohr said the City may have more residents next year
which would allow for more money.
Mayor Abramowitz asked what the surplus reduction would
be if the rates were reduced by 1.5 million dollars per
year and Mr. Foy said he would not know.
V/M Stelzer said the residents would be receiving a 5% to
6% reduction in their rates if 1.5 million dollars was
used for the reduction.
Mayor Abramowitz suggested the debt service rates be
reduced and V/M Stelzer had concerns with cutting the
debt service rates when the residents were being charged
too much money for water and sewer rates.
Mayor Abramowitz said the residents should not be asked
to pay for pump stations; therefore, the rate structure
should be reduced 50% and the remaining surplus should be
used for projects.
C/M Rohr had concerns with the City reducing the rates
this year and having to raise the rates next year. V/M
Stelzer said this should not happen because the rates
were generating more revenue than what was being
anticipated.
Mayor Abramowitz said the residents should be informed of
the excess surplus.
C/M Hoffman asked how much of the surplus could be used
for the remaining year and Mr. Foy replied, approximately
$2,000.00.
Mayor Abramowitz suggested the City Council continue with
the Budget review and discuss this matter later.
PAGE F-4
Referring to Account 664, V/M Stelzer asked if all of the
$229,000.00 was expected to be used and Mr. Foy replied,
no.
V/M Stelzer asked Mr. Burroughs to review this account
again. He said depreciation should not be listed in the
Budget.
Page 5
8/23/88 - Workshop
PAGES F-5, 6, 7 and 8
There were no questions on these pages.
PAGE F-9
C/M Bender asked why $1,454,629.00 was proposed for
Account 625 and Mr. Burroughs said at the end of June,
this account and each line item for revenues were 12%
ahead. Mr. Burroughs said this may have occurred because
the estimation of the actual Utilities was wrong. He
said next year's population may generate 2% more than
this year.
C/K Hoffman said he would like to see the rates decreased
by half a million dollars from the surplus.
Mr. Foy said the rates would be reduced $.30 if half a
million dollars of the surplus was used.
C/M Hoffman said 15% or 16% was not a significant
reduction and Mayor Abramowitz said he would prefer to
have the rates decreased by 50%.
Mayor Abramowitz said he did not mind using the surplus
to reduce the rates providing the Utilities Department
and the City did not suffer in the future.
C/M Hoffman said reducing the rates was not a bad thing
to do with the surplus; however, there was nothing wrong
with keeping the surplus.
C/M Rohr said Mr. Foy stated that if the surplus was
reduced by a half a million dollars, there would not be
enough surplus for the future.
V/M Stelzer asked how much surplus would be generated if
the rates were reduced.
C/M Rohr said if the rates remained the same, there would
be another 1.5 million dollars in surplus for next year.
C/M Hoffman said the surplus could be used for capital
projects and Mayor Abramowitz said the City Council could
approve capital projects during the year if there was
surplus available for the projects.
V/M Stelzer asked if the City was over estimating for the
rates and Mr. Burroughs said he did not feel that the
rates were being over estimated.
PAGE F-10
V/M Stelzer asked if the entire Budget was estimated by
the same formula and Mr. Burroughs said he used the same
formula in estimating most of the revenue items in the
Budget.
V/M Stelzer said the Budget should indicate a larger
projection on expenses rather than the encumbrances.
Mayor Abramowitz said Mr. Burroughs used the formula on
most of the Budget and there were no problems with the
Budget for other Departments.
City Manager Kelly asked Mr. Burroughs how many times he
was wrong during his experience in budgeting and Mr.
Burroughs replied, 1 time.
Page 6
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Mayor Abramowitz asked how many times Mr. Burroughs found
a high surplus and if the difference could be corrected.
Mr. Burroughs said the Budget could always be amended by
changing rates or cutting expenses. He said when he
begins budgeting, he had to estimate for 18 months as
opposed to 12 months.
PAGE F-11
Mayor Abramowitz asked Mr. Burroughs to explain the Bond
Fund and Mr. Burroughs said this Fund was for the
interest earned from the Bonds.
PAGE F-12
Mayor Abramowitz asked if there was any personnel added
and Mr. Foy said the positions of Deputy City Engineer
and Project Senior Inspector were eliminated; however, a
Lab Technician was added. He said because the services
were at a higher degree, the Utilities Department may
find a need in having a Deputy Engineer.
Mayor Abramowitz said the Utilities Department was doing
very well and the City Manager was very pleased with the
Department's operations.
V/M Stelzer had concerns with the estimates regarding the
salaries and he asked that the Finance Department review
the salaries.
Mr. Burroughs said he would do this if he had the staff
and time to do so.
Mr. Foy said he estimated the figures differently than
Mr. Burroughs; however, they came up with the same
figures. Mr. Burroughs said Mr. Foy had concerns with
having $1,000,000.00 in surplus before figuring the
Budget.
PAGE F-13
There were no questions on this page.
PAGE F-14
C/M Hoffman asked what the Insurance Fund was for and Mr.
Burroughs said this was for the liability insurance. C/M
Hoffman asked if this was separate or part of the General
Fund and Mr. Burroughs said this was part of the General
Fund.
V/M Stelzer asked if this insurance covered production
and field liability and Mr. Burroughs said this may be
included in the General liability insurance.
Mayor Abramowitz asked the City Manager to investigate
this matter.
PAGE F-16
There were no questions on this page.
PAGE F-17
C/M Hoffman asked what the $75,000.00 in Special Projects
would be used for and Mr. Foy said this money would be
Page 7
8/23/88 - Workshop
used to trim the Australian Pines located around the
Utilities Building.
C/M Hoffman asked if this project needed $75,000.00 and
City Manager Kelly replied, yes. City Manager Kelly said
the trees had to be trimmed because they were very
dangerous to the electrical lines.
Mayor Abramowitz asked why the trees cannot be removed
and Mr. Foy said the trees were there as a landscaping
buffer.
V/M Stelzer asked if the Public Works Department had
equipment to trim the trees and City Manager Kelly said
special equipment was needed to trim these trees and the
Public Works Department did not have the equipment.
C/M Bender asked if Florida Power and Light would trim
the trees since they were interfering with the electrical
lines and Mr. Foy said the trees were not on the
electrical lines; however, if the trees fell, the
electrical lines would be destroyed.
Mayor Abramowitz asked the City Manager to investigate
the matter and, if possible, replace the trees with
another type of landscaping.
C/M Hoffman asked what the Sludge Removal Expense Account
was for and Mr. Foy said this was for lime sludge removal
which had to be removed every year.
PAGE F-18
There were no questions on this page.
PAGE F--19
C/M Rohr asked what the account for Laboratory Equipment
was for and Mr. Foy said this account would complete the
laboratory.
City Manager Kelly said the technician has been offered a
position with another company that would pay him double
the salary he receives now plus a car; therefore, there
may be a need to hire another lab technician in the
future.
PAGES F-20 and 21
C/M Rohr asked why the City Manager increased the Budget
for this page by $34,356.00 than the proposed Budget and
Mr. Foy said he informed the City Manager that 2
additional people were needed for meter installations.
Mr. Burroughs said the older the meters, the slower the
meters; therefore, it would be a benefit to the City if
the meters were replaced every ten years.
C/M Rohr asked how many meters were in the City and Mr.
Foy replied, approximately 1,500.
Mayor Abramowitz asked what would happen with the old
meters and Mr. Foy said some of the meters could be
rehabilitated; however, there were several meters that
would have to be scrapped but there would be some
reimbursement for those meters.
Page 8
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PAGE F-22
There were no questions on this page.
PAGE F-23
V/M Stelzer had concerns with the expense calculation for
Backflow Prevention and Mr. Burroughs said he would
investigate these figures.
PAGE F-24
Mr. Burroughs said this page reflected the elimination of
2 positions and reduction of l position. Mr. Foy said
once the Utilities Department was on the mainframe, the
reduction of 1 position would be fine.
PAGE F-25
V/M Stelzer asked if the $39,000.00 for Professional
Services would be used since there were projects being
done in-house and Mr. Foy said all of the $39,000.00
should not be used.
PAGE F-26
Mayor Abramowitz asked if Data Processing was performing
more services for the Utilities Department and Mr.
Burroughs said Data Processing was being required to
spend more time on projects.
PAGE F-27
There were no questions on this page.
PAGE F- 2 8
Mayor Abramowitz asked if there were personnel salaries
split between the Utilities and Engineering Departments
and Mr. Foy replied, yes.
Mayor Abramowitz asked what the Legal Services Account
was used for and Mr. Foy said this was for the services
of Alan Ruf, Consulting Attorney. Mr. Foy said Alan
Ruf's services were used when the City Attorney could not
handle the cases.
Mayor Abramowitz asked if the City Attorney reviewed the
work performed by Alan Ruf and City Manager Kelly said
Alan Ruf and the City Attorney always discuss the cases.
PAGE F-29
Mayor Abramowitz asked why the electrical bill was so
high and Mr. Foy said the Lift Stations required a lot of
electricity.
PAGES F-30 and 31
There were no questions on these pages.
PAGE F- 32
V/M Stelzer had concerns with the Wastewater Agreements
and asked Mr. Foy to investigate the matter.
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8/23/88 -- Workshop
PAGES F-33, 34, 35 and 36
There were no questions on these pages.
PAGE F-38
Mayor Abramowitz asked what happened to the Reserve Fund
and Mr. Foy said the Reserve Fund was used to buy the
capacity from the County instead of leasing. Mr. Foy
said this matter would be presented to the City Council
at the August 24, 1988 City Council meeting.
PAGES F-39 through F-69
There were no questions on these pages because they were
self explanatory.
Mayor Abramowitz asked when the decision regarding the
surplus had to be made and Mr. Burroughs said the first
Public Hearing for the Budget would be held on September
6, 1988 at 7:00 P.M. Mr. Burroughs said he should have
the changes for the Budget by September 1, 1988.
C/M Hoffman said he would like to receive information
regarding the surplus if the rates were reduced 15%. He
said he would like to see the Debt Service reduced to
$3.75 per month. He said he would like to see the rates
cut and keep $1,000,000.00 in the surplus for capital
improvements. He said he would like the rate structure
reviewed to see if the charges were correct.
Mayor Abramowitz said he would like to know how the
reduction in rates would effect the Budget for next year.
C/M Hoffman said this would have to be calculated by how
much the rates would accumulate through the year.
C/M Rohr said he agreed with C/M Hoffman's statement
regarding the rate structure being correct.
V/M Stelzer had concerns with the surplus increasing each
year and Mayor Abramowitz said if the surplus was used
for capital projects, the surplus should not be
increasing.
V/M Stelzer said he would like to see one half million
dollars of the surplus used to reduce the rates to the
appropriate charge.
C/M Bender said he would like to see the Debt Service and
the rates decreased.
Mr. Burroughs said in the 32 years of his experience, he
has never seen a City include a Debt Service on a Utility
bill and V/M Stelzer said the City did this so the
residents would not be inconvenienced with two bills.
Mayor Abramowitz said he would like to see something done
regarding the payment by the residents. He said he would
like to see the water rates and the Debt Service
decreased by 50% providing there was enough money for
needed projects.
Mr. Burroughs said 1 million dollars in the Budget for
capital projects may not occur next year and Mr. Foy
disagreed.
Page 10
8/23/88 - Workshop
City Manager Kelly said C/M Hoffman's suggestion
regarding the rates and the Debt Service being reduced
was a good idea.
Mayor Abramowitz said he would agree to this providing
the City Council knew the consequences of the reduction.
V/M Stelzer asked if the Debt Service would ever be
increased and Mr. Foy said at the present time, the fees
should remain the same because there were no Bonds
expected.
V/M Stelzer said he would like the questions presented to
staff answered before he made his decision and Mr.
Burroughs said the City Council should make their
decision by September 1, 1988 at 12:00 P.M.
With no further business, Mayor Abramowitz ADJOURNED this
meeting at 5:00 P.M.
CAROL A. EVA S, CITY CLERK
"This public document was promulgated at a cost of $183.60 or $5.10 per
copy to inform the general public, public officers and employees of
recent opinions and considerations of the City Council of the City of
Tamarac."
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