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HomeMy WebLinkAbout1988-08-23 - City Commission Budget Workshop Meeting MinutesaF rA-y n ORI 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 J 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 1 1 1 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 J 1 1 8/23/88 - Workshop 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 1 1 1 8/23/88 - Workshop 1 n LI 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. Page 9 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." Page 11