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HomeMy Public PortalAbout05 09 14 WorkshopMINUTES OF THE WORKSHOP MEETING HELD BY THE TOWN COMMISSION OF THE TOWN OF GULF STREAM, FLORIDA ON FRIDAY, MAY 9, 2014 IMMEDIATELY FOLLOWING THE REGULAR MEETING OF THE TOWN COMMISSION THAT IS SCHEDULED FOR 9:00 A.M. IN THE COMMISSION CHAMBERS OF THE TOWN HALL, 100 SEA ROAD, GULF STREAM, FLORIDA. I. Call to Order: Mayor Morgan called the meeting to order at 10:47 A.M. II. Roll Call: Present and Scott W. Morgan Mayor Participating Robert W. Ganger Vice -Mayor Joan K. Orthwein Commissioner Thomas M. Stanley Commissioner Donna S. White Commissioner William H. Thrasher Town Manager Also Present and Rita L. Taylor Town Clerk Participating John C. Randolph Town Counsel III. Discussion related to the Ad Hoc Finance Committee: Mayor Morgan reported that Town Manager Thrasher has spent a great deal of time putting together a draft budget for next year, and that the Town is in considerably better shape than he had expected. He continued that if the millage rate is maintained at 3.7% as last year, and the increase in valuation of property of 12 %, plus the 4001 condominium completion, the Town can still allocate enough monies for legal fees, the undergrounding project and have reserves of $100,000. Mayor Morgan stated that the urgency of an Ad Hoc Finance Committee does not seem present at this time. He also stated that when trying to contact residents for their expertise and participation, he realized that it was so late in the season they would not be available during the summer mo nths. Mayor Morgan recommended tabling the Finance Committee for a future date. He recommended a budget discussion at this time to give some guidance to Town Manager Thrasher with regard to the upcoming budget for 2015, focusing on the millage rate of 3.7; whether to keep it at that rate, increase it, or roll it back. Vice -Mayor Ganger stated that the millage rate is the sum of things that you want to do. He continued that this is a remarkable time in the Town's history which is affecting the budget. Vice -Mayor Ganger recommended maintaining the millage rate at where it is, adding that the residents realize that there were housekeeping and legal situations. He also commented that Town Manager Thrasher should list the items in order of importance that are to be addressed. Vice -Mayor Ganger suggested an option of freezing some items in the budget which can be delayed until there is more certainty on the legal issue, and possibly hurricane expenses. He addressed the $700,000 in the reserves from the Unaudited Balance Sheet & Cash & Budget Report handout, and felt that was much too low for a Town of Gulf Stream's value. He stated that there has to be work done to increase the reserves in the General Fund and also in the Water Fund, due to the aging of the present pipes. Town Manager Thrasher reported that for next year there is a projected build of $150,000 in water, $66,000 in reserves and the balance, $80,000 — $90,000 coming from performance. Workshop Meeting May 9, 2114 Vice -Mayor Ganger reported that water management is Town Manager Thrasher's finest hours and commended him accordingly. He stated that if the millage rate had to be raised for the reserves, he would favor to do so but would not choose to. Commissioner Orthwein reported that the reserves were used to replace a water main on AlA with a tight budget. She continued that the Town usually kept $1,000,000 in the Fund Balance and that it is now below that figure. Commissioner Orthwein stated that the millage rate should not be raised above 3.7 at this time. She also agreed with Vice -Mayor Ganger with regard to the aging water pipes. Mayor Morgan reminded the Commission that the lighting expense of over $400,000 is a one -year expense. Commissioner White suggested keeping the 3.7 millage rate where it is, and that it should not be lowered. Commissioner Stanley stated that he had a discussion earlier with Town Manager Thrasher and stated that the millage rate should not be lowered. He continued that a millage rate increase of .1% would be approximately $86,000 in increased revenues. Commissioner Stanley further stated that the Reserve Fund will not increase a whole lot next year. He continued that the present millage rate will increase the reserves in the following years, 2016 and 2017. Commissioner Stanley stated that if the residents did not want the millage rate to rise, there was serious work to be done by the Commission in the next year or so, unless there is an increase in the rate. Mayor Morgan stated that at first he felt the rate would have to increase with the legal fees and possible emergencies. However, he felt more comfortable now with the elevation in property valuations coming in, and stated that we should stay the course at present. Vice -Mayor Ganger reported that he agreed with Commissioner Stanley with regard to the work to be done. He continued that there were many ways to increase revenues in a creative way in addition to property taxes. Vice -Mayor Ganger referred to a 5 or 10 -year plan that Commissioner Orthwein mentioned at a previous meeting, adding he was very much in favor of doing this. Mayor Morgan reported that possibly in five (5) years, there will be significant Water Fund issues again. He also addressed the EMS issues with the City of Delray Beach being unknown, and having no control over that. Mayor Morgan questioned the merits of putting monies into a study with regard to the possibility of establishing a barrier island fire department since there may not be time with Delray already investigating the possibility of using the Palm Beach County Fire Department. Vice -Mayor Ganger stated that he felt that the City of Delray Beach would not take a radical step with that issue, and will not give up that essential service. He continued that the cost of EMS will increase no matter what the final outcome is. 2 Workshop Meeting May 9, 2014 Town Manager Thrasher reported that there are more unknowns at present than in the past. He stated there should be continued efforts on short term periods other than just at the budget time.. Town Manager Thrasher referred to the September 30, 2008 Financial Report, and learned that the Fund Balance was $2,500,000, and they funded a water line, forfeited a debt, paid the entire share of the utility assessment, and stayed out of debt. He stated that you cannot have too much money in Fund Balance savings. Town Manager Thrasher strongly recommended at this time not to increase the millage rate but maintain it at 3.7. He also stated that he has provided sufficient funds for next year as the Town is putting in this fiscal year and next fiscal year an anticipated $350,000. Town Manager Thrasher reported that he is comfortable with those figures and we cannot do that if we reduce the millage figures down. He stated that even with legal fees, there will be monies put into the Fund Balance this fiscal year. Town Manager Thrasher stated that the cost of capital improvements has been spread over two years for the lighting and the street signs, over $500,000. He added that in this fiscal year we will only have to pay for 4 lights. He suggested freezing this year and next year with certain line items. Town Manager Thrasher explained freezing means holding off on line items that we can control until you absolutely have to use it, and keeping the funds in pocket, as long as possible. He added that is how the $2,500,000 was in reserves several years ago; really analyzing whether something was needed or not. Vice -Mayor Ganger asked what percentage of the total budget was that $2,500,000 and was advised it was nearly 100% of the total budget. He stated that this debate is discussed at every budget meeting in other towns. He continued that communities the size of the Town of Gulf Stream usually like 50% revenues covered, but there is no rule of thumb. Vice -Mayor Ganger suggested Town Manager Thrasher supply some ideas with regard to freezing monies at the time of the preparation of the real budget. Town Manager Thrasher reported that he does provide a five (5) year projection at budget time and he isolates time on capital expenditures with supporting documents. Commissioner Orthwein agreed that the Town does not want to go into debt, and should fund all their expenditures, as it is security, and has served the Town well in the past. She said she looks at a large Fund Balance as security for the Town. Town Manager Thrasher reported that there is analysis done in house with regard to the water loss which is the amount of water that goes through the system which is not billed but has to be paid for. He continued that at present the Town's water loss is less than 4 %, and before the Town installed the new line it was as high as 12 %. The normal expectation is G% loss and if we reach that point, we know we will need a sizeable expenditure soon. Vice -Mayor Ganger stated that the water loss is on purpose such as flushing our hydrants. Mayor Morgan stated that the constant 4% was encouraging. Workshop Meeting May 9, 2014 Commissioner Stanley commented that he would like to have another $150,000 generated for 2014/2015. He continued that a lot of permits and new construction projects have been completed in Town. Commissioner Stanley further stated that there may be added expenses to the preparation of the Design Manual amendments and to changes to Town Hall. He stated he was aware that there is a capital outlay of $70,000 planned but he questioned if that is enough. He was hopeful that there may be some possible tradeoffs found before the final budget is adopted. Vice -Mayor Ganger inquired if there was the ability to pay for the lighting project over time rather than one payment. Town Manager Thrasher responded "Yes ". Commissioner Stanley reported that there were proposals that provided financing. Commissioner Orthwein inquired as to why would the Town would pay for something over time, if the Town had the monies available. Vice -Mayor Ganger commented that the Town does have the option finance for that if the monies are not there when the time comes. Commissioner Orthwein reported that doing things more gradually does not hurt as much. Vice -Mayor Ganger reminded everyone that their greatest asset is the value of the community. Mayor Morgan reported that their property value is considerably higher than the neighboring towns. Commissioner Orthwein stated that an additional full-time officer was promised by the Commission to the Police Department several years ago, and that will be part of the budget. Town Manager Thrasher reported that a Code Enforcement Officer should be hued or contracted sometime in the 2014/2015 budget, as it is an important item for the Town. Town Counsel Randolph reported that item should not be discussed at this meeting. Vice -Mayor Ganger inquired as to when the Budget Hearings would take place. Town Clerk Taylor stated that the Town was required to have a proposed millage rate by the end of July. Town Manager Thrasher reported that the Town's estimated taxable value of $862,500,000 is a little on the low side of the real certified number that will be delivered the first of July 2014. H Workshop Meeting May 9, 21014 N. Ad journment• Mayor Morgan adjourned the meeting at 11:37 A.M. Recording Secretary