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HomeMy WebLinkAbout1988-09-06 - City Commission Emergency Special Meeting Minutes9p 7525 NORTHWEST 88TH AVENUE TAMARAC, FLORIDA 33321-2401 TELEPHONE (305) 722-5900 C r; RECORD OF COUNCIL ACTIONS/DISCUSSIONS NOTICE OF AN EMERGENCY SPECIAL CITY COUNCIL MEETING CITY OF TAMARAC, FLORIDA There will be an EMERGENCY Special City Council Meeting on Tuesday, September 6, 1988 at 4:00 P.M. in Conference Room #1 (Room 103) of City Hall, 7525 NW 88 Avenue, Tamarac, Florida. The purpose of this meeting concerns the proposed 6% public service tax on the purchase of electricity, metered or bottled gas (natural liquified petroleum gas or manufac- tured), telecommunications and telegraph services. FINAL ACTION: • APPROVED the following: 1. That $500,000.00 be deducted from the TUW Fund and transferred to the General Fund. 2. That the total amount of $532,020.00 be transferred from the Interim Service Fees Account to the General Fund to eliminate the proposed 6% Utility Tax and to balance the budget. The City Council may consider and act upon such other busi- ness as may come before it. All meetings are open to the public. CAE/pm Carol A. Evans City Clerk AN EQUAL OPPORTUNITY EMPLOYER POLICY OF NONDISCRIMINATION ON THE BASIS OF HANDICAPPED STATUS 7525 NORTHWEST 88TH AVENUE 0 TAMARAC, FLORIDA 33321-2401 TELEPHONE (305) 722-5900 Revised 9/8/88 RECORD OF COUNCIL ACTIONS/DISCUSSIONS NOTICE OF AN EMERGENCY SPECIAL CITY COUNCIL MEETING CITY OF TAMARAC, FLORIDA There will be an EMERGENCY Special City Council Meeting on Tuesday, September 6, 1988 at 4:00 P.M. in Conference Room #1 (Room 103) of City Hall, 7525 NW 88 Avenue, Tamarac, Florida. The purpose of this meeting concerns the proposed 6% public service tax on the purchase of electricity, metered or bottled gas (natural liquified petroleum gas or manufac- tured), telecommunications and telegraph services. FINAL ACTION: • APPROVED the following: 1. That $500,000.00 be deducted from the TUW Fund and transferred to the General Fund. *2. That the total amount of $532,020.00 be transferred from the Interim Service Fees Account to the General Fund to eliminate the proposed 6% Utility Tax and to balance the budget. * EDITOR'S NOTE: 265,620.00 of the $532,020.00 is to come from the current year's receipts.of Interim Service Fees and $266,400.00 is anticipated to be collected in FY 88/89. The City Council may consider and act upon such other busi- ness as may come before it. All meetings are open to the public. Carol A. Evans " City Clerk CAE/pm AN EQUAL OPPORTUNITY EMPLOYER POLICY OF NONDISCRIMINATION ON THE BASIS OF HANDICAPPED STATUS CITY OF TAMARAC CITY COUNCIL EMERGENCY SPECIAL MEETING TUESDAY, SEPTEMBER 6, 1988 TAPE 1 CALL TO ORDER: Mayor Abramowitz called this Emergency Special meeting to Order on Tuesday, September 6, 1988, at 4:00 P.M. in Conference Room #1 (City Clerk's Office). PRR9RNT: ALSO PRESENT: Mayor Norman Abramowitz Vice Mayor Jack Stelzer Councilman Dr. H. Larry Bender Councilman Bruce Hoffman Councilman Henry Rohr John P. Kelly, City Manager Richard Doody, City Attorney Ken Burroughs, Finance Director Carol A. Evans, City Clerk Pauline Walaszek, Special Services Secretary The purpose of this meeting was the proposed 6% public service tax on the purchase of electricity, metered or bottled gas (natural liquified petroleum gas or manufactured), telecommunications and telegraph services. SYNOPSIS OF ACTION: APPROVE",D the following: 1. That $500,000.00 be deducted from the TUW Fund and transferred to the General Fund. *2. That the total amount of $532,020.00 be transferred from the Interim Service Fees Account to the General Fund to eliminate the proposed 6% Utility Tax and to balance the budget. * EDITOR'S NOTE: $265,620.00 of the $532,020.00 is to come from the current year's receipts of Interim Service Fees and $266,400.00 is anticipated to be collected in FY 88/89. City Manager Kelly said at the City Council Budget meeting later in the evening, the City Council would have to take action on the Millage Rate and Budget for the General Fund and Utilities. He said the Finance Director wanted the City Council to inform him if there are to be any changes made before the meeting. He said the City Council had concerns with the Utility Tax and wanted the matter reviewed to see if it could be eliminated from the Budget. Mayor Abramowitz said the City Council has been advised that there was surplus in the Utility Department; however, he was advised that there were certain other Page 1 9/6/88 - Special funds with surplus. He said he would like these funds identified and how much surplus was available in these funds. City Manager Kelly said among the funds identified was Interim Service Fees. He said this Fund was monies received from the developers that have been used in the General Fund in the past; however, in the last two years, through the advice of an Attorney and based on other Municipalities, the monies have been set aside in an escrow account. He said after 4 years, the monies are to be reentered into the General Fund Budget. He said this course of action has contributed to the shortfall of monies in the Budget this year. City Manager Kelly said the City collected $280,000.00 in Interim Service Fees last year which were set aside in escrow and, this year, the City was projecting to receive $246,000.00 in Interim Service Fees. He said this Fund has been used in the previous years for Budgetary purposes; however, staff was concerned that the use of the money for Budgetary purposes may be improper. He said because of these concerns, the escrow procedure was established. Ken Burroughs, Finance Director, said in the current year, the City collected $255,000.00 in Interim Service Fees. He said these fees were not from developers but from taxpayers who request Certificates of Occupancy. He said the fees were prorations until the tax bill was issued the following year. He said next year, the Interim Service Fees collected may be the same amount. City Manager Kelly said monies have previously been identified under the Drainage Fund as monies that have been transferred from the General Fund to the Drainage Fund over previous years. Mr. Burroughs said V/M Stelzer made this analysis and the transfers began in 1979. He said $1,000,000.00 was transferred from the General Fund to the Drainage Fund; however, the Fund also includes drainage fees and impact fees of approximately $1,000,000.00. He said the City expended approximately $1,100,000.00 for drainage projects; therefore, arguments regarding the balance of that Fund could be that the monies were from the City's General Fund in an amount of $640,000.00. Mr. Burroughs said the Budget already contains $640,000.00; therefore, the money could not be used additionally. He said this was used to primarily reduce the sale of surplus property. Mayor Abramowitz asked if this transfer was approved at the last Regular City Council meeting and City Manager replied, yes. Mayor Abramowitz asked what would happen if the City Council rescinded the transfer and Mr. Burroughs said the General Fund would be short $640,000.00. Mayor Abramowitz asked if $500,000.00 of $640,000.00 was applied to something and, if so, what it was applied to and Mr. Burroughs said the sale of the surplus property estimated income was reduced by $550,000.00. Mayor Abramowitz asked what would happen if the transfer never occurred and Mr. Burroughs said if the sale of the Page 2 1 1 r 9/6/88 - Special surplus property income was left as it was, there would be $640,000.00 available. V/M Stelzer said the monies for the sale of the surplus property should only be used for capital improvements. City Manager Kelly said in the previous year, the City set monies aside for Capital Improvements contingent upon the sale of the surplus property and Capital Improvements were not implemented because the property was not sold. He said he was not proposing this; however, he was - suggesting that the 1.25 million dollars estimated for the sale of the surplus property be set aside for Capital Improvements when sold. V/M Stelzer said this procedure was good for last year's Budget; however, it would not help this year's Budget. 14ayor Abramowitz said if the City Council wanted to use the $640,000.00 for another use other than what it was allocated for, would they be acting illegally. v/iv1 Stelzer said the City would be using $550,000.00 from the sale of the surplus property; therefore, if the sale of the surplus property did not occur during 1988/89, the Budget would be short $550,000.00 in revenue. C/M Hoffman asked if there was a Fund for traffic light improvements and Mr. Burroughs said there was $321,000.00 in the General Agency Fund (Escrow) collected for the installation of traffic lights. He said he was told that there was no reason for the collection of these monies. He said on 57th Avenue and Pine Island Road $45,000.00 was collected from Shell Service Station for traffic lights and approximately 200 yards from there is Commercial Boulevard and Pine Island Road; therefore, does the money belong to Shell Service Station or the City. C/M Rohr asked what would happen if the City was requested to return the money to the person they collected it from because a project was not done and Mr. Burroughs said the request went to the City Council for approval to refund. C/M Bender said the City Council needed to know if the money could be used and Mayor Abramowitz asked if this money was used in the past. Mr. Burroughs said to his knowledge, the money was not being used in the past; ;,jwever, the interest was being used. V/M Stelzer said if the City used the impact fees and somebody wanted the fees back, there would be problems. City Attorney Doody said this Fund sounded like an impact fee because the monies were being collected for a specific purpose. C/M Bender said he investigated the matter and found that even though the traffic light fees were collected in a certain area, the City could use that money to install a traffic light anywhere in the City. He said this was done in the past; therefore, the money was in a Fund to be used in the City rather than at a given area. Mayor Abramowitz asked if there were any other Funds that contained unused money and the City Manager and Finance Director said these were the only Funds containing money. Page 3 9/6/88 - Special V/M Stelzer asked if there was only one Bond Issue on the City Hall and Police Station and Mr. Burroughs said there were two separate Bond Issues on those buildings. V/M Stelzer asked what would be done with the money saved on building the City Hall and Mr. Burroughs said he understood that the money would be used for the Police Station. Mayor Abramowitz asked how much revenue would be raised if the proposed ad valorem stayed as it is and C/M Bender replied, approximately $350,000.00. Mayor Abramowitz asked City Manager Kelly to identify the shortfall in the Budget and the purpose of the proposed Utility Tax. City Manager Kelly said the shortfall is approximately 1 million dollars. He said the City was short $376,000.00 in revenue in the Building Department, $70,000.00 in the Engineering Department, escrow of $246,000.00 budgeted but not collected for Interim Service Fees, the 4% Union raises were not calculated, capital equipment would be $720,000.00, burglar alarm fee elimination would be $100,000.00 and the surplus used last year was $800,000.00. He said this shortfall totalled 2.3 million dollars. V/M Stelzer said he reviewed the Budget and there was nothing in the revenue or expenses that could be decreased or increased. He said the revenues are estimated and, if the revenues are over estimated, there could be problems. V/M Stelzer said he knew there was surplus in the Utility Budget and for two he has been years asking questions about the money but he has not been receiving answers to his questions. He said at a Workshop meeting, reduction in rates were discussed. He said the reduction was to be 15 cents per 1,000 gallons of water and 25 cents per 1,000 gallons for sewer rates which totalled a reduction of 40 cents per 1,000 gallons per month. He said the average usage in the City by residents was approximately 6,000 gallons per month; therefore, the savings would be approximately $2.50 per month. V/M Stelzer suggested the City forego the reduction rates for this year and apply 1 million dollars of the anticipated surplus to the General Fund and eliminate the Utility Fund. He said when the Accountants submit their report in December the City can evaluate the report to see how much surplus was generated and could be used then, reduce the rates if feasible. V/M Stelzer said the extra money paid into the Utilities Department in the past years belonged to the residents and the money being collected for the utility tax belonged to the residents. He said he did not see why the City could not transfer 1 million dollars from the Utility surplus into the General Fund to balance the Budget. Mayor Abramowitz said he asked if 1 million dollars from the Utility surplus could be given back to the residents and he received an answer that if this was done, the Page 4 9/6/88 - Special rates would have to not want to decrease rates next year. C/M Hoffman said the therefore, Utilities reduction in rates. to the residents. be raised next year. He said he did the rates this year and raise the surplus came from Utilities West; East would be benefiting from the He said this was not a fair refund V/M Stelzer said the houses in the east did not pay their fair share of the ad valorem tax because their homes were smaller and older. He said the electric and water bills were smaller as well; therefore, the reduction would not be that much in the area. C/M Hoffman said if the City applied V/M Stelzer's suggestion, it would not be fair that the east was receiving a reduction with the west's money. V/M Stelzer asked how the developers east of 441 were being charged for improvements west of 441 and Mayor Abramowitz said regardless of where the people lived, they required services. V/M Stelzer said if the rates were left as they are, 1.5 million dollars would be generated next year. He said when the City received the Accountants reports, the rates could be reduced if there were extra surplus monies available. He said the residential and commercial residents would have to have the deduction because they both contributed to the surplus. Mayor Abramowitz said he does not see why the monies in the Interim Service Fees Fund and the Trafficways Fund could not be used. V/M Stelzer said he would not agree with using these funds because they were collected for projects. Mayor Abramowitz said the City Manager informed the City Council that there was a shortfall and, in order to correct the shortfall, services would have to be cut or taxes would have to be imposed. He said the City Council decided to impose the 6% Utility Tax; however, if there are monies available that could be used for the shortfall rather than imposing the Utility Tax, the monies should be used. V/M Stelzer said last year, the City Manager placed $800,000.00 in the General Fund contingent upon the sale of the surplus property; however, the property was not sold. He asked if this was done this year and the property was not sold, where would the City get $550,000.00 to cover the amount placed in the revenue. V/M Stelzer said the City should wait until the Accountants submit their report to see how much was in surplus and Mr. Burroughs said there would not be more then 1.5 million dollars in available funds at the end of the year. Mr. Burroughs said there was only 1.5 million dollars ofliquid cash available. V/M Stelzer said the Finance Director stated that there would be 1.5 million dollars in surplus available at the end of the year; therefore, if the rates remained the same, there would be 1.5 million dollars in surplus for next year. Page 5 9/6/88 -• Special V/M Stelzer said in 1987 there was a profit of $2,100,000.00 on the operations of Utilities which included money collected for the debt service. He said for the prior year, there was a profit of $1,207,000.00. Mayor Abramowitz asked where the money went and V/M Stelzer said the City had $22,000,000.00 invested. Mr. Burroughs said $22,000,000.00 was restricted funds and C/M Bender asked what the funds were restricted for. Mr. Burroughs said traffic lights were part of the funds, etc. C/M Bender said these funds were not really restricted but placed aside as a contingency and contingency meant emergencies. He said if the City was having an emergency in balancing the Budget, the funds should be used for this. Mr. Burroughs said he was not saying that the monies could not be used and C/M Bender said the City Council wanted to identify these funds. C/M Bender said once this was done, the City Council could determine the proper designation of the funds. C/M Hoffman asked how much of the investments are legally tied up and could be used only for CIAC purposes. Mr. Burroughs said all of the monies are in the investments except the Pension monies. He said the only funds that could really be used is the Trafficways Fund, Drainage Fund, Utilities West Fund and Interim Service Fees Fund. City Attorney Doody said any discussion about the Utility Fund should be referred to through Section 7.18 of the City Charter. He said the last sentence stated that the City Manager's responsibility is to see that there are separate Budgets. City Attorney Doody said if fees are collected for traffic lights, etc., the only theory to allow this is that the fees are considered impact fees. He said Governments can collect those types of fees providing they are used for the purpose in which they are collected. He said if the impact fees are not used for what they were collected for, the money may have to go back to the people they were collected from. Mayor Abramowitz asked if the any of the monies in the dk;cou,its could be used to balance the budget to avoid taxing the residents. Mr. Burroughs said he suggested several meetings ago transfering $500,000.00 from TUW and V/M Stelzer said he suggested transfering 1 million dollars. Mr. Burroughs said he would transfer $500,000.00 and use $500,000.00 from the Interim Service Fees Fund and if the City is called on the transaction, there would be $500,000.00 in the Interim Service Fees Fund. 9 Mayor Abramowitz said $500,000.00 should be deducted from the Utility Fund and $500,000.00 from the Interim Service Fees Fund to cover the shortfall and eliminate the Utility Tax. He said for the last few years, the City has been relying on monies from Land Section 7 and the expected monies have not been received. He said there is Page 6 r,. i, 9/6/88 Y- Special movement on Land Section 7 at this time and the surplus property would be sold; therefore, there are things to pick up the City's financial problem. Mayor Abramowitz said he would like to take the surplus money and return it to the residents. TAPE 2 T City Attorney Doody said the City Manager may be asked about Section 7.18 of the City Charter which stated, "...and the City Manager shall be fully responsible in ensuring that the expenses and revenues involved in.the operation of such facilities shall not be co -mingled with any of the regular budget -approved expenses and revenues of the City." Mr. Burroughs said the City would not be changing anything because the City has always transferred $350,000.00 from the TUW Revenue Fund to the General Fund; therefore, this could be done this year except the transfer would be $850,000.00. He said the Bond Indenture said the funds could be used for any lawful nur.nose and this seemed to be a lawful purpose. Mayor Abramowitz said he would like to take $500,000.00 from the Utility Fund and $500,000.00 from the Interim Service Fees Fund. He said if the City was called on the matter, hopefully, there will be funds available to make up the difference. He said the money was needed for emergency purposes and it did not seem illegal to use the money for this emergency. C/M Hoffman said if the City depleted the surplus from the previous year and the rates remained the same there would be a surplus at the end of next year of 1 million dollars. He asked why the rates could not be reduced by $500,000.00 which should only create a surplus of $500,000.00 next year. C/M Rohr said the City should meet the shortfall of the Budget by using the surplus monies in the Utilities Fund and leave the rates as they are. He said if the 6% Utility Tax is not imposed, Tamarac would be the only City that was not accommodating their growth. Mayor Abramowitz asked C/M Rohr if he wanted to continue overcharging the residents and C/M Rohr said the residents would not object to keeping their rates the same; however, they are objecting to additional taxes. C/M Hoffman said he was opposed to imposing the Utility Tax and, if a transfer of monies could be used to make up the shortfall and there was additional monies available, he would like to reduce the Utility rates for the people to be applicable to next year's surplus. Mayor Abramowitz asked if this was done, would the Utility rates have to be raised to make up a shortfall next year and Mr. Burroughs said he could not answer this at this time; however, this matter was not applicable to the Budget Public Hearing. Mr. Burroughs said this matter could be addressed before the second Budget Public Hearing. V/M Stelzer said if the Utility Tax was being eliminated, the funds to make up the shortfall had to be addressed at this time. He said the City should be concerned with using the Interim Service Fees because the City of \J Page 7 9/6/88 -- Special Oakland Park was in trouble for doing this. He said if the fees are going to be used, they would have to be paid back. C/M Hoffman said if the surplus property was sold, the City would be able to use the money where they needed. V/M Stelzer said the sale of the surplus property should not be used for operating expenses. He said it was not realistic to use Interim Service Fees to balance the Budget. Mr. Burroughs said he would prefer to use these funds because it was cash; however, come judgement day, the City would have to pay the money back. C/M Hoffman said the City should take $500,000.00 from the Utility Fund and $500,000.00 from the Interim Service Fees Fund to balance the Budget and eliminate the proposed 6% Utility Tax. He said from now until the utility rates have to be structured, the City Council could review the revenue to see if there is more money than expected. V/M Stelzer said by reviewing the past year he was sure that there are more monies in surplus than what was being presented. Mr. Burroughs said he would buy V/M Stelzer a good steak dinner if, on February 1, 1989, there were more monies than anticipated. . * C/M Rohr MOVED to TRANSFER $500,000.00 from the Utilities West * Fund to the General Fund, SECONDED by C/M Bender. V/M Stelzer asked why this money was being transferred and Mayor Abramowitz said this transfer was to abolish the proposed 6% Utility Tax and assist in balancing the Budget. V/M Stelzer asked where the other $500,000.00 would come from and Mayor Abramowitz said another Motion would be made. V/M Stelzer said he was not going to vote on one transfer and discuss how to get the rest of the money. He said he did not approve of using the funds from the Interim Service Fees because it was illegal. * C/M Bender MOVED to ABOLISH the proposed 6% Utility Tax, * SECONDED by C/M Hoffman. VOTE: ALL VOTED AYE * V/M Stelzer MOVED to TRANSFER money from the surplus of the * Tamarac Utility West Fund to the General Fund of approximately * 1 million dollars to eliminate the proposed 6% Utility Tax * from the General Budget, SECONDED by C/M Rohr. VOTE: Mayor Abramowitz - Nay V/M Stelzer - Aye C/M Bender - Nay C/M Hoffman _ Nay C/M Rohr - Nay Page 8 V� 9/6/88 - Special * C/M Bender MOVED to TRANSFER $500,000.00 from the Interim * Service Fees from the escrow account to be utilized in * balancing the Budget. C/M Hoffman said half of the money was in the account and half of the money was anticipated. * C/M Bender AMENDED his Motion to TRANSFER $250,000.00 presently * in the Interim Service Fees Fund and approximately $250,000.00 * which is anticipated in the account to be utilized in balancing * the Budget, SECONDED by C/M Hoffman. Mr., 13u roughs suggested the Motion contain a total of $532,020.00 which would balance out the proposed 6% Utility Tax Fund. * C;:; D:aader AMENDED his Motion to include this, C/M Hoffman * AMENDED his Second. V/M Stelzer said he objected to the Interim Service Fees being transferred into the General Fund because there were cases recently settled in the City of Oakland Park where the Interim Service Fees had to be repaid to the people they were collected from. V/M Stelzer said Interim Service Fees have been discussed for many years at the Broward League of Cities and now it is known that the Interim Service Fees have to be returned if they are not used for the projects they were collected for. He said the City was taking a big chance on using these fees because if the City was sued, the Interim Fees would have to be paid back to the people they were collected from and the fees would have been spent for operating expenses. He said the City will be paying double for using these fees. He said he would not vote for using the Interim Service Fees as part of the General Operating Budget. Mayor_ Abramowitz asked where the Interim Service Fees were spent in the past and Mr. Burroughs said in the General Operating Budget of the City. C/M Hoffman said hopefully, the surplus property would be sold at which time the escrow account for the Interim Service Fees could be repaid with that money. VOTE: Mayor Abramowitz - Aye w V/M Stelzer - Nay C/M Bender - Aye C/M Hoffman - Aye C/M Rohr - Aye V/M Stelzer said he would be discussing his objection to this transfer at the Budget Public Hearing. The following Vote is for a MOTION made by C/M Rohr to TRANSFER $500,000.00 from the Tamarac Utilities West Fund to the General Fund, SECONDED by C/M Bender. Page 9 9/6/88 - Special VOTE: Mayor Abramowitz _ Aye V/M Stelzer - Nay C/M Bender - Aye C/M Hoffman - Aye C/M Rohr - Aye With no further business, Mayor Abramowitz ADJOURNED this meeting at 5:30 P.M. ,`Or MAN ABRAMOWITZ, MAYOR CA OL A. E AN S, CITY CLERK "This public document was promulgated at a cost of $104.40 or ;2.90 per -*tnfnrm the general public, public officers and employees of recent opinions and considerations of the City Council of the City of Tamarac." CITY OF TAMARAC APPROVED AT MEETING OF 1 Page 10