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HomeMy WebLinkAboutBudget Workshop MINUTES OF MEETING DANIA BEACH CITY COMMISSION BUDGET WORKSHOP SATURDAY, AUGUST 28, 2010 - 9:00 A.M. 1. Call to Order Mayor McElyea called the workshop to order at 9:00 a.m. 2. Roll Call Present: Mayor: C.K. "Mac"McElyea Vice-Mayor: Anne Castro Commissioners: Bob Anton Walter Duke Bobbie H. Grace City Manager: Bob Baldwin City Attorney: Tom Ansbro Deputy City Clerk: Miriam Nasser Also Present: Mark Bates,Director of Finance Nicki Satterfield, Assistant Finance Director Colin Donnelly, Assistant City Manager Mary McDonald, Human Resources/Risk Management Director Bob Daniels, Director of Community Development Joe Fernandez,Fire Chief Kristen Jones, Director of Parks and Recreation Donn Peterson, BSO Chief Jeremy Earle, Community Redevelopment Agency Director Nick Lupo, Code Compliance Manager Frank DiPaolo, Controller Dominic Orlando, Director of Public Services 3. Welcome; Opening Remarks; Budget Introduction Commissioner Grace noted that we need to educate our residents about the money they will have to pay. She said that it is important that we ensure that they understand it is a difficult choice for the Commission to balance the Budget considering the many important issues to be discussed. Commissioner Grace pointed out that things like declining property values, foreclosures and economic standstill, in addition to pensions and benefits to be negotiated, are making this a very challenging Budget process. She encouraged all residents to check the City Website for any clarification on the proposed Budget. Commissioner Grace indicated that there will be two I public hearings in September to allow for public input. She hopes the Commission will make the right decisions for the benefit of the citizens of Dania Beach. CityManager Baldwin welcomed everyone resent at the workshop. He referred to the g Y p p presentation made at the July 28, 2010, Special Meeting and hoped that the Commission had time to review the Budget proposal. City Manager Baldwin clarified that this is a workshop for the Commission to make any changes or additions if they so desire. He added that there will be two more opportunities for additional changes at the public hearings to be held in September. City Budget Overview (Fund Summaries/Funding Sources/Capital/Staffing/Operating Costs) Mark Bates, Director of Finance, noted that he is not going to reiterate what was presented at the July 28, 2010, Special Meeting; however he provided a summary of some of the rate increases previously approved by the Commission as well as other Budget details. He suggested dividing the meeting into three segments: 1) General Fund, including suggestions and discussions; 2) Enterprise Fund; and 3) Other Miscellaneous City funds. Director Bates clarified that each group will be divided into two areas: Revenue Resources and Expenditures. General Fund Discussion of City Funding Sources Discussion of City Funding Uses (ex.: BSO Contract; BSO Office renovations) Director Bates responded for Vice-Mayor Castro that the CIP expenditure for this year is approximately $15M. He also advised that the General Fund is $40M. Vice-Mayor Castro remarked that theoretically we are expending less than previous years. She further commented that property values are going down but certain municipalities are compelled to raise taxes. Director Bates confirmed that over the past number of years there has been a reduction in capital expenditures and a reduction in tax revenue at the same time. Director Bates noted that the Revenue Resources are comprised of: Tax support, Assessment Fees and the Use of Fund Balance or Debt. Vice-Mayor Castro requested that future Budget documents show the two previous years, the current year and the proposed Budget year. Vice-Mayor Castro questioned the Telecommunications Tax. Director Bates noted it is difficult to ascertain why we are getting less revenue. He indicated that the reason could be that people migrate and the taxes go back to where they used to live instead of their current place of residence. 2 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Vice-Mayor Castro further spoke about the Florida Power and Light (FPL) bills becoming higher. Director Bates explained that some of the reasons could be: conservation and the economic impact associated with it; migration into Florida has decreased and there are more vacancies, therefore less total use of electricity as a city. He added that the calculation on franchise fees has been discussed nationwide. Vice-Mayor Castro asked for the YTD 2010 figures for Telecommunications and Electric. Vice-Mayor Castro noted she does not have the YTD numbers for Code/Parking violations. Director Bates noted that the Parks and Recreation Department is in charge of parking violations and we are not writing as many tickets as before. He further indicated that the City recently allowed parking enforcement to be done by Code Compliance, in addition to Parks and Recreation. Vice-Mayor Castro noted that she would like the parking issue to be revisited. She thought we Y p g g should not cede the parking spaces to the next tenant of the Pier Restaurant. Vice-Mayor Castro also commented that there will be an opportunity for more parking revenue, once we implement the parking meters for the Parking Garage. Vice-Mayor Castro asked Nick Lupo, Code Compliance Manager, to provide an explanation regarding Code violations. Vice-Mayor Castro asked for the status on the Red Light Cameras. City Manager Baldwin noted that an ordinance would have to be prepared. It was the consensus of the Commission to move forward with the bid process for the installation of Red Light Cameras. Commissioner Anton questioned the transport fees for Fire Rescue. Director Bates explained that with the change in the economy and the amount of people unemployed, transport fees are decreasing significantly. He noted that Fire Chief Fernandez has checked with ADPI, the collection agency, who advised that even though our transport billings are running consistently, the number of people not paying is increasing because they do not have insurance. Vice-Mayor Castro noted that she met with Chief Fernandez yesterday and they are revising their Fire Rescue Monthly Report to reflect the correct data. She added that Chief Fernandez is planning to bring forward a proposal for a transport fee change with a "resident" provision, where "non-residents"would be paying a different rate. 3 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. It was the consensus of the Commission for staff to bring back a transport fee change proposal to include special consideration to our residents. Vice-Mayor Castro requested the YTD 2010 Fire Report. Joe Fernandez, Fire Chief, referred to his meeting with Vice-Mayor Castro yesterday. He indicated that the number provided by the collection agency was not correct and that the final figures are being revised. Director Bates explained the use of the General Fund Reserves which constitutes a significant portion of the funding for the coming year. Vice-Mayor Castro questioned the Disaster Recovery funds. She further clarified that the numbers shown under this item may be alarming to some people; however, funds eventually come back to the City through other means. Commissioner Anton asked what would be the actual Fund Balance, in the event the Budget is approved as presented. He noted that a few years ago we had a significant Fund Balance, but it is now decreasing. Commissioner Anton said that based on the current state of the economy we have some serious problems to face. Director Bates referred to Page 186 of the proposed Budget showing $10,120,500.00 as the estimated Undesignated Fund Balance available for the 2011 Budget. Commissioner Duke noted that staff has done a good job with balancing the Budget during this difficult economic environment. Director Bates addressed the Expenditure side of the General Fund which includes: staffing, operations and capital improvements. He noted that capital improvements can be paid in cash or be financed. Vice-Mayor Castro cautioned staff to watch the Debt service and to make sure that we are not writing a check that the next generation will not be able to cash. Director Bates noted that the major cost to the City is derived from staffing and benefit levels. He referred to Page 10 of the Budget document which describes the staffing summary for City personnel. Director Bates added that the City was successful in receiving a grant for additional firefighters in the Fire Rescue area. Commissioner Grace noted that as a result of the rant awarded to the City for additional g Y firefighters, we will have to pick up the associated costs in two years. She would prefer not to take the grant for the nine firefighters because we may not have funds to pay them in the future. City Manager Baldwin noted that Fire Chief Fernandez fully supports the additional firefighters. However,the Commission will make the final decision on this matter. 4 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Vice-Mayor Castro noted that the standards require us to staff the truck. She stated that she supports Chief Fernandez's suggestion and added that she would like to hire the extra firefighters. Vice-Mayor Castro further indicated that pension and benefits need to be negotiated with the Unions because the City cannot afford the Pension Fund for the firefighters anymore. She suggested that, with the exception of current firefighters, the new ones get enrolled in the Florida Retirement System (FRS), which is outside the bargaining unit. Vice-Mayor Castro thought that we could benefit from this grant by bringing them on board under contract, with the understanding that in two years their contract may be rescinded. She said that we will have two years to resolve it and the Chief will then have to decide what to do. Lastly, she remarked that for safety reasons we need to bring the additional firefighters on board. Mayor McElyea concurred with Vice-Mayor Castro. Commissioner Anton noted that some years ago there was a Memorandum that outlined the safety reasons for hiring additional firefighters. He indicated that we have a golden opportunity with this grant to move forward with hiring the additional nine positions, as well as filling the three that are open. Commissioner Anton agreed with Vice-Mayor Castro on the pension issues that need to be resolved. Chief Fernandez advised that the current Budget would be minimally affected by the new positions. He remarked that the City is growing and he is concerned that we do not have adequate staff. This grant puts us at the correct level. Chief Fernandez further clarified for the Commission that, under this grant, we do not have the choice to take a partial number of firefighters. He noted he is available to answer any questions or concerns that the Commission might have. Discussion followed between Vice-Mayor Castro and Chief Fernandez regarding the proposed ordinance to include a "residents' preference" clause and the number of firefighters/paramedics required on the scene. Commissioner Grace noted there is consensus to hire the nine firefighters plus the three open positions, totaling 68 positions for FY 2010-2011. She asked if there was any federal funding to help us with costs. Vice-Mayor Castro clarified that she agrees with hiring the 12 firefighters, provided we do not include them in the standard pension plan. If the bargaining unit wants to discuss this matter, we can do that and we will have two years to reach a final decision. City Manager Baldwin noted that if the Commission so wished, we could bring the nine firefighters under a contractual arrangement. Vice-Mayor Castro thanked Chief Fernandez for his advice and for doing an excellent job with the resources available. Mayor McElyea thought all firefighters should be entitled to the same benefits. He added we need to move forward one way or the other. 5 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Chief Fernandez noted he is willing to advise the Commission on the operational aspects as well as possible alternatives. He pointed out that the staffing issue is paramount and we need to find a long-term solution as the City continues to grow. Commissioner Duke noted that this is a safety issue and we need to meet the standards. Chief Fernandez explained that we need to get four firefighters on the scene within five minutes and we are not currently achieving that with the staff we have. Commissioner Duke noted that he supports hiring the nine firefighters over the long term because we need them. He thought this was a good opportunity to take advantage of the grant and save some money. Furthermore, we need to get the pension clause under control; however, he is not part of the consensus of the Vice-Mayor. Commissioner Duke indicated that we all agree that, one way or another,we need to get them on board. Vice-Mayor Castro questioned the number of years of service required to be vested in the Fire Department. Mary McDonald, Director of Human Resources and Risk Management, responded they are vested in seven years. City Manager Baldwin commented that under the Florida Retirement System they would be vested in six years. Vice-Mayor Castro noted that if the firefighters are hired and they contribute to the City Fire Pension for two years and at the end of this period they have to leave, they would walk away with nothing. Director McDonald noted that they would get a lump sum plus whatever they contributed during that time. Commissioner Anton agreed with hiring the 12 firefighters, with the caveat that we look at the ranking structure. He felt that we could move things around to the point where we can afford it. Commissioner Anton further questioned if we need a captain and a lieutenant at the same time. Chief Fernandez provided a detailed explanation on how the incident command is structured. He advised that the model used in Dania Beach is the standard structure for Firefighters supervision. He noted that we have personnel acting two levels above their classification, which is a great deal of responsibility for them. Chief Fernandez remarked that the level of creativity and economizing of this Department has pushed it to the limit. He recommended following the standard structure model. Commissioner Anton indicated that there seems to be too many chiefs and not many firefighters on the scene. He would like staff to look at some other areas in the Fire Department and possibly combine positions. 6 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Chief Fernandez noted he will scrutinize the organizational structure of the department in order to maximize their efforts. Commissioner Anton stated he is not too concerned with meeting the standards, as long as it does not involve the safety of the people or our personnel. He commented that during the current economy, we must try to save the money related to those positions. Commissioner Grace noted we need to look at other departments as well as the Fire Department. Commissioner Duke asked if the current Fire Department staffing is consistent with the BSO Fire Rescue Department. Chief Fernandez noted they have more personnel in administration and operation. Vice-Mayor Castro noted that adding the twelve firefighters will bring us up to standards. She further asked if these expenses would be considered capital purchases or part of the CIP. Director Bates advised that the additional nine firefighter positions are funded by a federal grant for two years. He further clarified that the City will need to contribute to their pension with the employer's part. If they are not vested when they leave, they are entitled to take the employee contribution; whereas the City's contribution rolls into future impacts from the actuarial analysis. Vice-Mayor Castro asked if the grant would cover the employer's contribution. Director Bates responded in the affirmative. Director Bates explained the difference between capital projects and capital purchases. Vice-Mayor Castro referred to the Modification of the "G" and "H" Wells/Construction of Well "I" shown on Page 14 of the Budget document, under 2011-2015 Capital Projects Plan. She asked Dominic Orlando, Director of Public Services, for an explanation of the amount of$1.1 M allocated to this project which appears as a"Loan". Director Orlando noted that we will not proceed with this project unless we use grant funds. Vice-Mayor Castro questioned the importance to have the lift stations rehabilitated. She further asked for the number of lift stations which have been rehabilitated and how many more still need to be done. Director Orlando noted that we are spending a lot of maintenance time on all of them. He advised that the City has sixteen lift stations and five have already been rehabilitated under Phase 1. Director Orlando clarified the specific jobs allocated to each amount and the work performed by a lift station. 7 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Vice-Mayor Castro noted that we have submitted a request for federal funds for the rehabilitation of the lift stations. Commissioner Duke questioned who would be paying for the SW 26th Terrace Stormwater drainage improvements. Director Orlando advised that we are working together with FDOT to address the flooding issues in that area and hopefully there will be some contribution on their part. Commissioner Duke noted that one of the many negative impacts that the Airport expansion has had in our City is that the section west of the Airport is no longer a quiet residential neighborhood but an industrial area. He encouraged the Commissioners to reach out to the County to help us pay for some of the infrastructure costs. Commissioner Duke suggested including this item in our Airport negotiations with Broward County. Director Orlando said that the County is responsible for water and sewer in that area and we take care of stormwater and road improvements. Commissioner Anton noted there is a possibility that we can get some funding from the County because that industrial area will continue to grow. Vice-Mayor Castro asked whether the amount of $6M for the SE Stormwater Drainage Improvements included in the Capital Projects of the Budget document would be a grant or a loan. The Commission confirmed with Director Orlando that we have not yet received any grants so this would probably be a loan. Commissioner Grace questioned the Melaleuca Drainage Improvements/Roadwork item under the 2011-2015 Capital Projects Plan. Director Orlando explained the type of work that needs to be done in that area. Director Bates noted that if the items under the Capital Purchase Proj ects are not purchased by the end of the Fiscal Year,they would go back to the Fund Balance for re-appropriation. Commissioner Duke requested a list of the City vehicle fleet. City Manager Baldwin will provide the list to the Commission. City Manager Baldwin pointed out that the changes to the Capital Purchase structure was discussed at the CIP meeting earlier in the year. Vice-Mayor Castro discussed the proposed purchase of vehicles for the Fire Department. She indicated that Fire Chief Fernandez explained the reasoning for these purchases. Vice-Mayor Castro noted that some residents have questioned the rising costs derived from the Fire 8 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Department equipment. She asked Chief Fernandez if we are going to be covered for some time, once all this new p equipment is in lace. Fire Chief Fernandez noted that we should be 100% set. Commissioner Anton noted that he understands the need for a 4 X 4 vehicle; however, he would like to explore the possibility of purchasing a smaller vehicle in order to reduce costs. Chief Fernandez explained that we are trying to achieve Fire Rescue response capabilities as well as the emergency management duties. He indicated that all the equipment will be purchased through the Florida Sheriff s Bid. Vice-Mayor Castro referred to the Purchase Plan for the Parks and Recreation Department. She asked if some of these projects could be postponed or done in-house. Kristen Jones, Director of Parks and Recreation, noted that the concrete storage can be put on hold. She suggested sharing our storage space with Westrec. Director Jones further explained that we should move forward with the dugouts at Frost Park because there are some safety hazards; however, staff will try to find the way to reduce the number. She clarified that the amount of$975125.00 covers all three parks. As regards the Football field at C.W. Thomas, she indicated that we need to bring a professional company to do the laser grading. Vice-Mayor Castro would like staff to try to reduce costs for these items. Commissioner Duke thought it would be a good idea to put off some of these costs. However,he wants to make sure that we do not stress out our Public Services staff. Commissioner Anton spoke about the costs for the gym equipment at Frost Park. He asked if the revenue we are receiving is offsetting these costs. He also questioned if it was worth keeping the pools open during the winter. Director Jones noted that the increase in the membership to use the park generates a lot of money. She added that high school children use the pool and they pay. Director Jones also explained that the purchase of the Thermal Blanket for the Competition Pool is very important for our swim teams. Discussion followed between the Commission and Director Jones regarding the hours when the dog park is open and its use in general. It was the consensus of the Commission to defer the Concrete Storage at the beach. Vice-Mayor Castro reiterated the need for the Commission to review the citywide fleet list. Vice-Mayor Castro questioned the crane for the super duty truck 550. 9 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. I I Director Orlando advised that the crane is to lift the Lift Stations, as well as any equipment at the Water Plant and remove the life guard stands at the beach in case of a hurricane. He will review the costs and get back to the Commission. It was the consensus of the Commission to defer the Roadway Repaving Program as well as the Sidewalks Repair citywide projects. The Commission generally agreed to look at the Citywide Vehicle Replacement Program, once they have reviewed the City fleet list. Vice-Mayor Castro referred to Page 20 of the proposed Budget relating to the Mayor and Commission Operating Expenses. Director Bates explained the changes made from previous years to the Mayor and Commission category. He further noted that the Budget document needs to reflect who oversees or controls the money. Commissioner Anton would like to see a breakdown of how the money is spent. Vice-Mayor Castro asked to remove the Tourism Council from this year's list since they are looking for other funding sources. She would like to have details of how the Chamber spends the funds allocated to them. Nicki Satterfield, Assistant Finance Director, clarified for Vice-Mayor Castro the numbers related to the Human Resources/Risk Management Department. Vice-Mayor Castro questioned if we met or exceeded this year's allocated amount for Contingency. Director Bates indicated that the original Contingency amount was $700,000.00 and the balance is now down to approximately $30,000-35,000. He explained how the Contingency Fund works and added that the 2010 Budget was adjusted in July, 2010. Vice-Mayor Castro confirmed with Director Bates that the amount of$269,103.00 is set aside as Contingency because it is not appropriated for anything. Vice-Mayor Castro spoke about the CRA contribution and asked whether we were doing a TIF model. She further questioned if the $790,000.00 shown in the proposed Budget reflects the Economic Development position. Finance Director Bates advised that this is the same appropriation we have for the current year. He added that the CRA budget includes the additional position. Commissioner Anton noted that the TIF amount was over $800,000.00. 10 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Jeremy Earle, CRA Executive Director, explained that the actual number for the TIF discussed at the CRA meeting was $822,150.00, which includes the Economic Development position. Director Bates questioned if the increase to the CRA funding would come out of Contingency. The Commission clarified we are not taking this amount out of the Contingency Fund. Commissioner Duke would like staff to move forward with the BSO office renovations because we need to provide the employees with a safe environment. Vice-Mayor Castro questioned the timeline for the construction of the new City Hall. She asked where the BSO office would be located. Director Earle advised that Hank Thomas plans to start building the new City Hall on September 19 2011, and construction should take approximately a year. Donn Peterson, BSO Chief, noted that ideally he would prefer to have a unified command where there is more control and unity. He commented that the community has benefited from their stay at the 803 building. Chief Peterson spoke about the costs associated with finding a suitable place for BSO. He added that nothing so far is less than $1M and the renovation is less expensive than that. Chief Peterson stated that if it is cheaper to include BSO in the new City Hall, it is worth considering this option, as opposed to construct separate offices for them. Commissioner Duke asked if Hank Thomas was building some retail/commercial on the west side of the Parking Garage. If this is the case, he suggested that side could become the BSO offices. Director Earle advised that Mr. Thomas had planned to place the BSO offices within City Hall. Chief Peterson noted that the square footage that they currently have at City Hall is adequate for the day to day operation. He further said that 8,500 sq. ft. should be a good space and will also address their storage needs as well. Chief Peterson thought Commissioner Duke's idea would keep them in proximity to City Hall. Commissioner Anton confirmed with Director Earle that there will be no need to demolish City Hall as the new building is under construction. Director Earle clarified that Mr. Thomas will demolish the old building at his own expense. Commissioner Anton asked if Mr. Thomas could demolish the current BSO offices at City Hall and put BSO in temporary offices/trailers in the parking lot while the new City Hall is built. Chief Peterson noted that they could only use the trailer for offices; however, a temporary structure is not suitable for other BSO needs. 11 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Commissioner Duke would like to have the consensus of the Commission to direct staff to discuss this matter with Hank Thomas. City Manager Baldwin confirmed with the Commission that we will leave the $400,000.00 alone until we know the results of the discussions with Mr. Thomas. City Manager Baldwin reported that the BSO contract is currently being negotiated. Commissioner Anton noted that we pay a significant amount of money in County taxes. He further stated that we need the County to account for the amount of $7M that goes to the Broward Sheriff's Office. Commissioner Anton remarked there are several issues that we need to discuss with BSO. Commissioner Grace asked what will be the outcome of the School Resource Officers SRO's issue. City Manager Baldwin noted we are looking at alternatives, such as LETF or JAG funds. He indicated that we are trying to have the SRO's paid for through some other way other than the BSO contract. Vice-Mayor Castro expressed her appreciation to City Manager Baldwin and Director Bates for working so hard on this issue. She asked if this is going to be resolved before the end of the Budget process. City Manager Baldwin noted we are trying to have it completed as soon as possible. Vice-Mayor Castro noted that we should not give the County the idea that we are willing to pay $500,000.00 for communications services. Discussion followed between the Commission, City Manager Baldwin and Director Bates regarding some of the items that could be included in the BSO contract. Director Bates noted that if the SRO's are included in the BSO contract, we should get some funds from the School Board. It was the consensus of the Commission to remove the amount of $500,000.00 for communication services from the proposed Budget. Director Bates clarified that all items over $25,000.00 will come back for approval by the Commission. Vice-Mayor Castro commended Bob Daniels, Director of Community Development, for bringing down the costs of his department and for doing an excellent job for the City. Mayor McElyea recessed the workshop for lunch at 11:50 a.m. 12 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Mayor McElyea reconvened the workshop at 12:3 0 p.m. Director Bates presented a Summary of Commission Ideas for General Fund Budget Adjustments • Beach Concrete Storage ($80,000.00) • Defer Street Repaving($200,000.00) • Tourism Council—not funded($3,000.00) • Increase CRA Contribution($129,042.00) • BSO Communications Charge—Not funded($500,000.00) Director Bates noted that staff will provide the Inventory of City vehicles to the Commission on Monday, August 30. Director Bates advised we will be discussing the City's three major Enterprise Funds: Water, Sewer and Stormwater. He explained that all three funds get the majority of their revenues from user charges. Director Bates reviewed the items included in each of these categories. He further noted that staff plans to engage the services of a financial advisor to look at the City's debt in order to get the debt structure into a more comprehensible fashion. Commissioner Anton questioned if there would be any significant impacts on the current water rates, as a result of the current discussions with the South Florida Water Management District (SFWMD)regarding our water consumption. Director Bates responded that it is not going to significantly impact our current rates. He provided further details as reflected on Page 84 of the proposed Budget document. Director Orlando explained that we currently have two wells: Well "H" was rehabilitated some years ago and its capacity went down. It also has saltwater intrusion therefore it will be converted into a monitoring well. Well "G" was also rehabilitated a few years ago and it has the same problem with the saltwater intrusion. He noted that Well "I" was recently constructed and it is not yet in service. Director Bates indicated that the Water Rate Study should be ready some time in November and implemented at the beginning of 2011. Vice-Mayor Castro referred to the Customer Service Water and Billing item. She questioned if a new position was added to the Water Department. Director Bates advised that the Receptionist position currently located in the Atrium will be re- classified and moved from the City Manager's budget into the Finance Department, Customer Service area. He added that there is no increase in costs; it is only a transfer to where she can be better utilized. 13 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Director Bates explained that the Sewer Fund has been running a deficit for some years. He further commented that there is a growing need for sewer services, such as the lift stations' replacements previously discussed. Director Bates noted that there has been a dramatic increase in costs for the treatment of the sewage affluent by the City of Hollywood, therefore the news on the Sewer Fund is not too good. He stated that this Fund has no net assets; therefore, we will have to increase the sewer rates and some significant challenges will take place over the course of the next year. Vice-Mayor Castro confirmed with Director Bates that the Sewer Fund does not have any Contingency Fund for this Enterprise Account. Director Bates noted that it would typically come from the General Fund or by an appropriation from an Undesignated Fund. Director Bates distributed copies of the letter received from the City of Hollywood regarding the increase in the Large User Wastewater Monthly Billing Rates, which is attached to and incorporated into these minutes. City Manager Baldwin pointed out that we have no choice but to deal with the Infiltration and Inflow(I & I)problem because we are being charged to treat that water. Other Business (Enterprise) Funds—Stormwater, Marina, Parking Funds Director Bates referred to the Stormwater Fund and noted that we have a relatively low assessment for stormwater. He indicated that there is a major need to address infrastructure improvements in the stormwater area. Director Bates explained the two-step plan suggested by staff regarding the best course of action to resolve the infrastructure issues. He advised that at the September 13 Public Hearing staff will bring back the exact amount that we need to borrow and the proposed rate increase schedule. Director Bates noted that staff is proposing to create a Parking Fund and explained how it will be structured. He noted that the Parking Garage will eventually have a significant cost to the City and we need to have control of the parking at the new facility. City Manager Baldwin noted that he would like the Finance Department to have control of the revenues of the Parking Garage. Other City Funds (OPEB Trust, Pension Trust Funds) Director Bates noted that about two years ago the City conducted an Other Post Employment Benefits (OPEB) valuation to establish the funds that need to be set aside to pay for post- employment benefits/health insurance to employees who are planning to retire. The results of the study revealed that the City would need to set aside $1.6M per year to pay for retiree health. He indicated that this amount was budgeted last year as well as this year and we are also funding $1.6M in the coming years. Director Bates advised that over a period of time that accumulation of resources will grow to spinoff investment income which will help defray the cost of 14 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. employees' health insurance. He further explained that there are three factors regarding the employees' health insurance that the Commission needs to consider in the longer term: 1) The retiree program for employee health benefits is paying 2/3 of the employee health insurance costs when they retire. He pointed out that many retirees are staying on the City's health plan even when they reach social security age. 2) The amount that the employees pay for health insurance coverage is virtually unheard of in the industry, while the City is incurring significant costs. 3) The level of benefits and the ability to adjust the market conditions over time because of the mixture of collective bargaining agreements, past practices and pension benefit issues. All these factors make it impossible for the City to adjust the level of employee health insurance benefits. Director Bates referred to the consequences of the OPEB liability which keeps growing, in spite of the funds already set aside. He noted that staff has asked the Labor attorneys to look at some corrective actions to bring to the table for discussion. Vice-Mayor Castro questioned if we could reduce the amount.this year to $1.2M. Director Bates noted we could, however, it would be reported as a liability. He pointed out that the laws are changing dramatically and he would not recommend it. Director Bates clarified that the total amount is $13M of which$1.6M is charged to the General Fund. Vice-Mayor Castro suggested modifying some of the bargaining agreements to lower future impacts. She recommended reducing the OPEB contribution to $1.2M for the benefit of our taxpayers. Commissioner Anton noted that when looking at pension costs the Fire and Police have a very high assumption and it really needs to be reduced. He advised that as the Commission representative on the Police and Fire Pension Board, he has been talking with the Finance Director about this matter. Commissioner Anton indicated that they will be meeting with the investment consultants and the Pension Board attorneys at the next Police and Fire Pension Board meeting to see if this can be resolved. Director Bates noted that he has talked to Cathy David, the Administrator for the Police and Fire Pension Board, about the significant investment loss which occurred last year. Commissioner Anton explained how the Police and Fire Pension investment program works. He further noted that the Dania Beach General Employees Pension Plan is closed and all new hires go to the Florida Retirement System (FRS). Commissioner Duke concurred with Vice-Mayor Castro regarding the reduction in the OPEB contribution. It was the consensus of the Commission to bring the OPEB contribution to $1.2M Director Bates noted that on the Pension liabilities there are three areas: 1) the general pay increase which results in a higher pension contribution; 2) amortization of the benefit changes that have been granted; and 3) the average return percentage. 15 Minutes of Workshop Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. Commissioner Anton noted that these are some of the areas we need to review in detail. Commissioner Duke noted we need to look at the pension costs as well as the overall administration, department heads and any extra benefits we offer. Discussion followed between the Commission and Director Bates regarding the future impacts derived from the pension plans losses. City Manager Baldwin clarified with Vice-Mayor Castro that she wants to get the millage rate lower than the rolled back rate. Director Bates presented a Summary of Commission Ideas for Other City Funds • Remove the cost for BSO Communication services, but leave $400,000.00 for repairs and maintenance • Reduce OPEB funding ($400,000.00) Director Bates noted that the amount of adjustments in the governmental fund is $1,053,000.00, which represents a current millage rate of 6.066 mills. Commissioner Anton thought we could lower the millage rate, as well as find additional reductions in the Parks and Recreation Department and the Vehicle Fund. City Manager Baldwin noted that we are trying to avoid lay-offs. Commissioner Duke asked department heads to come up with some creative ideas and look at the things that are not strictly necessary, such as cell phones, etc. Director Bates advised that staff will bring back any suggestions or further adjustments for Commission consideration, prior to the September 13 First Public Hearing. 4. Adiournment Mayor McElyea adjourned the workshop at 1:40 p.m. ATTEST: CITY OF DANIA BEACH LOUISE S ILSON, tMC 9�P�5 FrRSr C. K. MCELY CITY CLERK MAYOR—COMMISSIONER Approved: October 26, 2010 Minutes of Workshop POR Dania Beach City Commission Saturday,August 28,2010-9:00 a.m. CITY of HOLLYWOOD, FLORIDA > DIAMOND orna .DmnaT 2600 HOLLYWOOD BOULEVARD P. O. BOX'229045 ZIP 33022_9045 ♦ y POR OFFICB OF THE DIREC'MR • TUrxONE (954)921-3231 DEPARTMENT OF PAX (954)921.3064 FINANCIAL SERVICES August 9, 2010 WMPAGE wwwhoffymodfl.org Dominic F. Orlando, P.E. Director of Public Services City of Dania Beach 100 W. Dania Beach Blvd. Dania, FL 33004 Re: Large User Wastewater Monthly Billing Rate Dear Mr. Orlando: This is to confirm our announcement at the last large users meeting that th of Hollywood will be adjusting the large user wastewater monthly billing rate o $2.60 per thousand gallons effective October 1, 2010. Please feel free to contact Mr. Perez or me if you would like to discuss this matter further. Sincerely; 1A • ��� �'©sue .Matthew Lalla Financial Services Director /s °� 3a/ate c: Mark Bates, Finance Director Leo Williams, Superintendent f Albert Perez, City of Hollywood Public Utilities Director �`j 0 Doreen Lam, City of Hollywood Treasurer Mark Moore, City of Hollywood Public Utilities Deputy Director Ilk �i ��Hollywood 1 � • 2007 "An Equal Opportunity and Service Provider Agency"