TENTATIVE: SUBJECT TO REVISION

TENTATIVE: SUBJECT TO REVISION

TOWN OF PALM BEACH

Town Manager's Office

SPECIAL TOWN COUNCIL BUDGET WORKSHOP MEETING AGENDA

TOWN COUNCIL CHAMBERS JULY 11, 2019

9:30 AM

1. CALL TO ORDER AND ROLL CALL

   Gail L. Coniglio, Mayor Danielle H. Moore, President

   Margaret A. Zeidman, President Pro Tem Julie Araskog

   Lew Crampton Bobbie Lindsay

2. PLEDGE OF ALLEGIANCE

3. APPROVAL OF AGENDA

4. COMMUNICATIONS FROM CITIZENS - 3 MINUTE LIMIT

5. TOWN MANAGER'S OVERVIEW OF THE PROPOSED FY20 BUDGET

   
   

   1. General Fund

      1. Review of General Fund Revenues for FY2020

         Jane Le Clainche, Director of Finance

      2. General Fund Expenditures - Department Review

         1. Legislative

         2. General Government

         3. Town Manager

         4. Advice and Litigation

         5. Town Clerk

         6. Information Technology

         7. Human Resources

         8. Finance

         9. Planning, Zoning and Building

         10. Recreation and Tennis

         11. Fire- Rescue

         12. Police

         13. Public Works

         14. Transfer and Other

             
             

   2. Debt Service Funds

      1. Debt Service Funds

         Jane Le Clainche, Director of Finance

   3. Capital Improvement Funds

   4. Enterprise Fund Budgets

      1. 1. Town Docks Enterprise Fund

      2. Par 3 Golf Course Enterprise Fund

         Carolyn Stone, Director of Business Development and Operations

   5. Internal Service Funds

      1. 1. Health Insurance

      2. Risk Management

      3. Equipment Replacement Fund

         Jane Le Clainche, Director of Finance

   6. Trust and Agency Funds

      1. 1. Pension Funds

      2. OPEB Trust

         Jane Le Clainche, Director of Finance

         RESOLUTIONS

6. RESOLUTION NO. 49-2019 A Resolution of the Town Council of the Town of Palm Beach, Palm Beach County Florida, Approving a Proposed Operating Millage Rate of 3.1350 for the Tentative Fiscal Year 2020 Budget; Approving the Computed Rolled Back Millage Rate of 2.9720 to be Provided to the Property Appraiser in Accordance with F.S. 200.065; Establishing the Date, Time and Place of the First and the Final Budget Hearings to Consider the Proposed Millage Rates and Tentative Fiscal Year 2020 Budget and Directing the Town Manager to Transmit this Information to the Property Appraiser of Palm Beach County in Accordance with the Requirements of F.S. 200.065.

   Jane Le Clainche, Director of Finance

7. RESOLUTION NO. 50-2019 A Resolution of the Town Council of the Town of Palm Beach, Palm Beach County, Florida, Amending the Town of Palm Beach Master Fee

   Schedule by Increasing the Parking Placard And Metered Parking Fees, and Providing an Effective Date.

   Jay Boodheshwar, Deputy Town Manager

8. RESOLUTION NO. 51-2019 A Resolution of the Town Council of the Town of Palm Beach, Palm Beach County, Florida, Amending Recreation Department Fees for Fiscal Year 2020 and Granting Authority to the Director of Business Development and Operations to Modify Daily Recreation Center and Tennis Fees, when Necessary, to Maximize Revenue During Underused Periods.

   Carolyn Stone, Director of Business Development and Operations

9. RESOLUTION NO. 52-2019 A Resolution of the Town Council of the Town of Palm Beach, Palm Beach County, Florida, Amending Town Docks Fees for Fiscal Year 2020 and Granting Authority to the Director of Business Development and Operations to Modify Fees, when Necessary, to Maximize Revenue During Underused Periods.

   Carolyn Stone, Director of Business Development and Operations

10. RESOLUTION NO. 53-2019 A Resolution of the Town Council of the Town of Palm Beach, Palm Beach County, Florida, Amending Golf Fees for Fiscal Year 2020 and Granting Authority to the Director of Business Development and Operations to Modify Golf Fees, when Necessary, to Maximize Revenue During Underused Periods.

    Carolyn Stone, Director of Business Development and Operations

11. RESOLUTION NO. 54-2019 A Resolution of the Town Council of the Town of Palm Beach, Palm Beach County, Florida, Relating to the Worth Avenue Improvement Project; Establishing the Estimated Assessed Cost Against the Properties that will be Benefitted Thereby; Directing the Town Manager to Prepare an Updated Assessment Roll; Establishing a Public Hearing to Consider Approval of the Assessment Rolls and Reimposition of the Maintenance Assessments and their Collection Pursuant to the Uniform Assessment Collection Act; Directing the Provision of Notice; and Providing for an Effective Date.

    Jane Le Clainche, Director of Finance

12. RESOLUTION NO. 55-2019 A Resolution of the Town Council of the Town of Palm Beach, Palm Beach County, Florida, Relating to the Peruvian Avenue Improvement Project; Establishing the Estimated Assessed Cost Against the Properties that will be Benefitted Thereby; Directing the Town Manager to Prepare an Updated Assessment Roll; Establishing a Public Hearing to Consider Approval of the Assessment Rolls and Reimposition of the Maintenance Assessments and their Collection Pursuant to the Uniform Assessment Collection Act; Directing the Provision of Notice; and Providing for an Effective Date.

    Jane Le Clainche, Director of Finance

13. RESOLUTION NO. 56-2019 A Resolution of the Town Council of the Town of Palm Beach, Palm Beach County, Florida, Relating to the Collection and Disposal of Commercial Solid Waste; Establishing the Estimated Assessed Cost Against the Properties that Will Be Benefitted Thereby; Directing the Town Manager to Prepare an Updated Solid Waste Assessment Roll; Establishing a Public Hearing to Consider Approval of the Assessment Roll and Reimposition of the Service Assessments and Their Collection Pursuant to the Uniform Assessment Collection Act; Directing the Provision of Notice; and Providing for an Effective Date.

    H. Paul Brazil, Director of Public Works

14. ANY OTHER MATTERS

15. ADJOURNMENT

PLEASE TAKE NOTE:

The progress of this meeting may be monitored by visiting the Town's website (www.townofpalmbeach.com) and clicking on "Meeting Audio" in the left column. If you have questions relative to this feature, please contact the Office of Information Systems (561) 227-6315.

Disabled persons who need an accommodation in order to participate in the Town Council Meeting are requested to contact the Town Manager's Office at 838-5410 or through the Florida Relay Service by dialing 1-800-955-8770 for voice callers or 1-800-955-8771 for TDD callers, at least two (2) working days before this meeting.

Executive Summary

Town of Palm Beach

Town of Palm Beach, Florida

July 11, 2019

Honorable Mayor, Town Council and Residents of the Town of Palm Beach;

The proposed FY2020 budget, represents staff’s continuing efforts to reduce expenditures and reorganize Town operations to ensure the most efficient and effective delivery of high quality public services. A thorough review of each departments’ proposed budget and their operations was completed.

This proposed budget is the result of the second year of hard work to find efficiencies and apply lean government principles on a Town‐wide basis, but this is a continuous process and will be an ongoing effort each year. We expect to see further reductions in expenditures and increased revenues in FY21 and beyond. Through attrition, each position and its related responsibilities will be examined to determine if the position is still needed or can be restructured before automatically backfilling to accomplish this goal.

The Purchasing Division has continued to contribute quantitatively and qualitatively to the strategic goals of the Town of Palm Beach by continuing to engage best business practices to achieve efficiencies, transparency, and maximize the value of public funds with the goal of promoting cost savings to the Town’s purchasing efforts while achieving best value for goods, services, and construction. During FY19, the Purchasing Division implemented E‐Bidding with the goal of increasing the number of proposers/bidders. Increased competition historically promotes better pricing. Of the five construction projects issued for solicitation under the new E‐Bidding Platform, all submittals came in under the Opinion of Cost Estimates, which was a first. This platform will enable the Town to garner more competition, better value and new pools of proposers/vendors. The Purchasing Division sponsored two vendor workshops with the goal of increased participation by new firms. Additional vendor workshops are being planned. Purchasing now issues solicitations on three known websites, with the average number of 300 plus notifications being sent for each solicitation.

In a continuation from FY18 best practice initiatives, the Purchasing Division has utilized an online site for sale of surplus items where the Town pays no fees and has garnered for the FY19 budget cycle $120,440 during the first seven months of the fiscal year. For solicitations issued, the Town has continued to drive negotiations before any recommendation is made to Town Council. For items being purchased for installation such as the new playground, the Town has continued the process of Direct Owner Purchases where the purchase order is issued directly to the equipment

Executive Summary

Town of Palm Beach

supplier, with the contractor assuming responsibility for receipt and installation, thus the Town pays no sales tax for the commodity. Cost savings for Direct Owner Purchases and Negotiations reflect a savings in the first seven months of FY19 of $104,508.

General Fund

Historical Trends – Expenditures

For purposes of the General Fund discussion, we have provided the spreadsheet following this section to illustrate the trend in expenditures by category since 2009 to enable the reader to understand where the growth has come from and to better understand how the FY20 budget compares to previous fiscal years. We compare the FY20 budget first to FY12 because it was the lowest total budget year in the past decade. We also describe the change since FY09 because that was the highest budget year to date and the catalyst for future budget reforms. In addition, another table is shown that contains the FTE history for all departments back to 2009.

The years FY2009 through FY2018 represent actual costs, FY2019 numbers are the adopted budget, and FY2020 represents the proposed budget.

The overall General Fund expenditures have increased since FY09 by a total of 28.87% or 2.62% per year for the last 11 years. Since FY12, expenditures have increased by 50.94% or 6.37% per year for the past 8 years. We highlight operating expenditures on the spreadsheet to differentiate the costs of the day‐to‐day operations versus other expenditures of the Town, such as capital improvements, coastal projects, and large transfers to various funds. Since FY09, operating expenditures have increased $4,142,843 or 7.46%, for an average annual change of 0.68%, and since FY12, operating expenditures have increased by $14,745,411 or 32.81%, for an average annual change of 4.10%. Transfers and other expenses since FY09 have increased by 143.94% or $14,874,761, representing an average annual change of 13.09%, and since FY12, these expenses have increased $13,907,754 or 123.07% for an average annual change of 15.38%.

FY12 to FY20

Highlights of the major increases since FY12 are described below:

• Total expenditures have increased by 50.94% (6.37% annually) and total operating cost increased by 32.81% or $14,745,411 (4.10% annually).

• The largest driver of expenditure increases since FY12 were pension costs for current employees and retirees receiving legacy benefits, which increased $7,629,271 plus the extraordinary contribution of $5,420,000 to fund the lowering of the assumed rate of return. These costs represent 45.6% of the General Fund total increase during this time period. The increase in funding should return the pension fund to healthy levels in the next five to ten years depending on investment returns.

  

  Executive Summary

  Town of Palm Beach

  

• Salary and wage costs have increased $3,630,995 or 12.67% of the total increase. The recent compensation and benefit study costs in FY20 are a portion of the increase.

• Contractual costs have increased $3,663,440 (12.8% of the total) over the period due in part to contracting out many Town services that used to be performed by Town staff. Increases in sewage treatment and disposal costs alone contributed to the increase of contractual costs by $1,080,497 since 2012.

• The transfer to the coastal management fund has increased $3,016,711 or 10.53% of the total. In FY15, $4,777,000 was added to Town taxes to begin developing a permanent funding source for the coastal program.

• Debt service costs increased $2,483,913 or 8.68% of the total increase since 2012 due to the issuance of the 2013 revenue bonds.

• The transfer to the Capital Improvement Fund have increased by $1,420,000 or 142% to build up reserves for future capital projects. These costs represent 4.96% of the total increase.

  These six expenditures represent 95.24% of the increase over FY2012. Other important budget trends since FY12 include the following:

• Other employee benefit costs over this time period have decreased by 11.3% or $915,202. Most of this reduction is due to the decrease in the OPEB trust funding. It is important to note that during this period Town employee health insurance costs have declined

  $20,227, while health insurance costs nationwide were experiencing increases.

• Depreciation costs have increased $541,384 during this time period due to higher costs for the Town’s large heavy duty equipment and vehicles, despite the elimination of some equipment and extending the life of most equipment.

• The Four Arts Library funding has increased $80,250 due to the programmed 3% per year increase in funding plus an additional contribution in FY17.

• The other category increases which include commodities, and Risk Insurance increased by less than the rate of inflation over this time period.

  FY09 – FY20

  To put the FY20 proposed budget into further context, if we were to look back 11 years and compare the FY20 budget to the FY09 budget:

• Total expenditures have increased by 28.8% (2.6% annually) and total operating costs increased $4,142,843 or 7.46% or 0.68% annually.

• The pension costs including the annual required contribution, the extraordinary contribution contributed to 51.8% of the total increase for a total of $9,830,593.

• Salary costs increased by $658,040 and benefit costs declined by $1,739,242. Total FTEs decreased from 410.39 in FY09 to 362.24 in FY20, a decrease of 48.15 employees. The

  

  Executive Summary

  Town of Palm Beach

  

  FY20 budget includes additional Part time no benefits (PTNB) staffing of 7.48 FTE. The bulk of this increase in PTNB staffing is for the new Recreation Center 7 day a week operation, which will enhance services to the community and increase revenues. Full time staffing declined by 1 position in the proposed FY20 budget. A complete analysis of staffing can be found later in this document.

• Contractual costs increased by $1,969,351 or 20.6%. This increase is due to contracting out services and increases in sewage treatment and disposal costs.

• The Transfers and other category, which include funding for special detail overtime, Four Arts Library, debt service, coastal funding, capital improvement funding, risk funding, the recent extraordinary retirement contribution, and the funding for the amortization change in total have increased $14,874,761 or 143.94% over the 11‐year period, representing an average annual change of 13.09%. These categories alone accounted for 78.22% of the total increase over this time period.

  A summary table can be found on the following page showing the expenditures by category since FY2009 followed by a table showing FTE history from FY09 through FY20.

  Executive Summary

  Town of Palm Beach

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  Executive Summary

  Town of Palm Beach

  

  

  

  

  

  

  

  

  

  

  

  

  
  

  Expenditure Category	FY2009	FY2010	FY2011	FY2012	FY2013	FY2014	FY2015	FY2016	FY2017	FY2018	FY2019	FY2020	FY19 vs. FY20 Difference	% Change	Change vs. FY09	Average Annual Change	Change vs FY12	Average Annual Change
  Salary and Wages	$ 26,810,179	$ 26,005,698	$ 23,976,640	$ 22,973,606	$ 22,450,839	$ 22,668,667	$ 22,939,819	$ 22,881,069	$ 23,819,924	$ 23,379,627	$25,800,355	$26,604,601	$ 804,246	3.12%	‐0.77%	‐0.07%	15.81%	1.98%
  Pension Benefits	6,632,860	7,315,310	8,783,472	3,414,182	4,380,925	6,078,882	6,598,873	7,324,860	8,803,246	9,376,327	10,514,497	11,043,453	528,956	5.03%	66.50%	6.05%	223.46%	27.93%
  Other Employee Benefits	8,922,275	8,451,690	8,122,789	8,098,235	8,493,967	8,234,672	8,245,397	7,795,982	8,072,606	7,702,200	7,094,515	7,183,033	88,518	1.25%	‐19.49%	‐1.77%	‐11.30%	‐1.41%
  Contractual	8,713,162	7,120,084	6,841,604	7,019,073	7,227,726	7,615,442	8,191,691	8,876,317	9,585,132	10,021,787	10,000,741	10,682,513	681,772	6.82%	22.60%	2.05%	52.19%	6.52%
  Commodities	1,744,703	1,623,373	1,492,316	1,557,897	1,574,948	1,633,364	1,518,113	1,471,130	1,844,873	1,733,077	1,775,363	1,753,420	(21,943)	‐1.24%	0.50%	0.05%	12.55%	1.57%
  Depreciation/Capital Outlay	2,723,701	2,518,061	2,547,679	1,881,319	2,033,744	2,097,896	1,892,941	2,858,675	3,053,650	2,538,572	2,404,707	2,422,703	17,996	0.75%	‐11.05%	‐1.00%	28.78%	3.60%
  Subtotal Operating Expenditures	55,546,880	53,034,216	51,764,500	44,944,312	46,162,149	48,328,923	49,386,834	51,208,033	55,179,431	54,751,590	57,590,178	59,689,723	2,099,545	3.65%	7.46%	0.68%	32.81%	4.10%
  Special Assignment OT	536,382	353,370	419,899	653,762	493,138	483,568	538,877	700,786	308,713	384,442	400,000	1,400,000	1,000,000	250.00%	161.01%	14.64%	114.15%	14.27%
  Library	272,400	272,400	272,400	272,400	288,989	297,659	306,580	315,777	350,250	335,008	345,058	352,650	7,592	2.20%	29.46%	2.68%	29.46%	3.68%
  Transfer to the Risk Insurance Fund	1,918,000	1,904,463	1,896,226	1,791,507	1,892,780	1,876,000	1,925,362	1,934,595	1,838,037	1,828,475	1,898,059	1,900,819	2,760	0.15%	‐0.90%	‐0.08%	6.10%	0.76%
  Transfer to Capital Improvement Program	1,817,000	4,828,957	500,000	1,000,000	1,000,000	1,000,000	1,000,000	1,030,000	2,290,200	2,118,024	2,200,000	2,420,000	220,000	10.00%	33.19%	3.02%	142.00%	17.75%
  Transfer to Underground Utility Fund		‐	‐	‐	‐	‐	‐	2,530,250	267,041	‐	135,000	144,450	9,450	7.00%	#N/A	#N/A	#N/A	#N/A
  Transfer to the Debt Service Fund	3,790,000	3,922,000	3,500,000	3,500,000	3,500,000	6,100,000	6,100,000	6,265,462	6,088,728	5,982,331	5,994,738	5,983,913	(10,825)	‐0.18%	57.89%	5.26%	70.97%	8.87%
  Transfer to Coastal Management Fund	2,000,000	1,046,900	3,090,000	3,960,000	4,765,099	7,200,000	11,377,000	8,015,220	7,265,000	7,410,300	7,349,124	6,976,711	(372,413)	‐5.07%	248.84%	22.62%	76.18%	9.52%
  Extraordinary Transfer to Retirement Fund	‐	‐	‐	‐	‐	‐	‐	‐	2,500,000	4,759,016	5,420,000	5,420,000	‐	0.00%	#N/A	#N/A	#N/A	#N/A
  Additional Contribution for UAAL Amort.	‐	‐	‐	‐	‐	‐	‐	‐	‐	‐	574,061	‐	(574,061)	‐100.00%	#N/A	#N/A	#N/A	#N/A
  Contingency		‐	‐	‐	‐	‐	‐	‐	‐	‐	560,000	610,000	50,000	8.93%	#N/A	#N/A	#N/A	#N/A
  Subtotal Transfers and Contingency	10,333,782	12,328,090	9,801,645	11,300,789	11,940,006	16,957,227	21,247,819	20,792,090	20,907,969	22,817,596	24,876,040	25,208,543	332,503	1.34%	143.94%	13.09%	123.07%	15.38%
  Total General Fund	$ 65,880,662	$ 65,362,306	$ 61,566,145	$ 56,245,101	$ 58,102,155	$ 65,286,149	$ 70,634,653	$ 72,000,123	$ 76,087,400	$ 77,569,186	$ 82,466,218	$ 84,898,266	$ 2,432,048	2.95%	28.87%	2.62%	50.94%	6.37%

  Expenditure Category	FY2009	FY2010	FY2011	FY2012	FY2013	FY2014	FY2015	FY2016	FY2017	FY2018	FY2019	FY2020	FY19 vs. FY20 Difference	% Change	Change vs. FY09	Average Annual Change	Change vs FY12	Average Annual Change
  Salary and Wages	$ 26,810,179	$ 26,005,698	$ 23,976,640	$ 22,973,606	$ 22,450,839	$ 22,668,667	$ 22,939,819	$ 22,881,069	$ 23,819,924	$ 23,379,627	$25,800,355	$26,604,601	$ 804,246	3.12%	‐0.77%	‐0.07%	15.81%	1.98%
  Pension Benefits	6,632,860	7,315,310	8,783,472	3,414,182	4,380,925	6,078,882	6,598,873	7,324,860	8,803,246	9,376,327	10,514,497	11,043,453	528,956	5.03%	66.50%	6.05%	223.46%	27.93%
  Other Employee Benefits	8,922,275	8,451,690	8,122,789	8,098,235	8,493,967	8,234,672	8,245,397	7,795,982	8,072,606	7,702,200	7,094,515	7,183,033	88,518	1.25%	‐19.49%	‐1.77%	‐11.30%	‐1.41%
  Contractual	8,713,162	7,120,084	6,841,604	7,019,073	7,227,726	7,615,442	8,191,691	8,876,317	9,585,132	10,021,787	10,000,741	10,682,513	681,772	6.82%	22.60%	2.05%	52.19%	6.52%
  Commodities	1,744,703	1,623,373	1,492,316	1,557,897	1,574,948	1,633,364	1,518,113	1,471,130	1,844,873	1,733,077	1,775,363	1,753,420	(21,943)	‐1.24%	0.50%	0.05%	12.55%	1.57%
  Depreciation/Capital Outlay	2,723,701	2,518,061	2,547,679	1,881,319	2,033,744	2,097,896	1,892,941	2,858,675	3,053,650	2,538,572	2,404,707	2,422,703	17,996	0.75%	‐11.05%	‐1.00%	28.78%	3.60%
  Subtotal Operating Expenditures	55,546,880	53,034,216	51,764,500	44,944,312	46,162,149	48,328,923	49,386,834	51,208,033	55,179,431	54,751,590	57,590,178	59,689,723	2,099,545	3.65%	7.46%	0.68%	32.81%	4.10%
  Special Assignment OT	536,382	353,370	419,899	653,762	493,138	483,568	538,877	700,786	308,713	384,442	400,000	1,400,000	1,000,000	250.00%	161.01%	14.64%	114.15%	14.27%
  Library	272,400	272,400	272,400	272,400	288,989	297,659	306,580	315,777	350,250	335,008	345,058	352,650	7,592	2.20%	29.46%	2.68%	29.46%	3.68%
  Transfer to the Risk Insurance Fund	1,918,000	1,904,463	1,896,226	1,791,507	1,892,780	1,876,000	1,925,362	1,934,595	1,838,037	1,828,475	1,898,059	1,900,819	2,760	0.15%	‐0.90%	‐0.08%	6.10%	0.76%
  Transfer to Capital Improvement Program	1,817,000	4,828,957	500,000	1,000,000	1,000,000	1,000,000	1,000,000	1,030,000	2,290,200	2,118,024	2,200,000	2,420,000	220,000	10.00%	33.19%	3.02%	142.00%	17.75%
  Transfer to Underground Utility Fund		‐	‐	‐	‐	‐	‐	2,530,250	267,041	‐	135,000	144,450	9,450	7.00%	#N/A	#N/A	#N/A	#N/A
  Transfer to the Debt Service Fund	3,790,000	3,922,000	3,500,000	3,500,000	3,500,000	6,100,000	6,100,000	6,265,462	6,088,728	5,982,331	5,994,738	5,983,913	(10,825)	‐0.18%	57.89%	5.26%	70.97%	8.87%
  Transfer to Coastal Management Fund	2,000,000	1,046,900	3,090,000	3,960,000	4,765,099	7,200,000	11,377,000	8,015,220	7,265,000	7,410,300	7,349,124	6,976,711	(372,413)	‐5.07%	248.84%	22.62%	76.18%	9.52%
  Extraordinary Transfer to Retirement Fund	‐	‐	‐	‐	‐	‐	‐	‐	2,500,000	4,759,016	5,420,000	5,420,000	‐	0.00%	#N/A	#N/A	#N/A	#N/A
  Additional Contribution for UAAL Amort.	‐	‐	‐	‐	‐	‐	‐	‐	‐	‐	574,061	‐	(574,061)	‐100.00%	#N/A	#N/A	#N/A	#N/A
  Contingency		‐	‐	‐	‐	‐	‐	‐	‐	‐	560,000	610,000	50,000	8.93%	#N/A	#N/A	#N/A	#N/A
  Subtotal Transfers and Contingency	10,333,782	12,328,090	9,801,645	11,300,789	11,940,006	16,957,227	21,247,819	20,792,090	20,907,969	22,817,596	24,876,040	25,208,543	332,503	1.34%	143.94%	13.09%	123.07%	15.38%
  Total General Fund	$ 65,880,662	$ 65,362,306	$ 61,566,145	$ 56,245,101	$ 58,102,155	$ 65,286,149	$ 70,634,653	$ 72,000,123	$ 76,087,400	$ 77,569,186	$ 82,466,218	$ 84,898,266	$ 2,432,048	2.95%	28.87%	2.62%	50.94%	6.37%

  

  
  

  

  

  

  

  Executive Summary

  Town of Palm Beach

  
  

  FTE History FY09 – FY20 (Includes Full Time and Part Time No Benefits Staffing)

  
  

  Department/Fund	FY09	FY10	FY11	FY12	FY13	FY14	FY15	FY16	FY17	FY18	FY19	FY20
  Town Manager	6.00	6.00	5.00	5.10	5.10	5.10	5.10	5.00	8.00	8.00	7.00	7.00
  Information Systems	6.00	6.00	6.00	6.00	6.00	6.00	8.00	8.00	8.00	8.00	8.00	8.00
  Human Resources	4.90	4.95	4.57	4.52	4.38	4.38	4.63	5.13	5.03	5.03	4.59	3.77
  Finance	17.95	17.45	17.45	17.95	18.14	18.14	18.64	18.56	15.56	15.56	14.74	14.69
  Planning, Building & Zoning	29.25	28.75	27.25	26.75	26.25	26.25	27.25	28.25	28.25	28.25	27.25	25.75
  Fire‐Rescue	81.50	90.20	86.40	82.90	79.90	75.90	75.90	75.90	75.90	81.90	78.40	81.40
  Police	129.5	115.05	102.85	103.85	104.35	103.35	103.35	103.35	103.35	102.85	101.35	102.20
  Public Works	101.46	97.75	86.35	86.85	88.02	88.04	87.04	88.54	88.07	88.64	83.64	80.85
  Recreation/Tennis	17.03	16.81	16.66	14.89	9.49	10.21	15.25	15.18	13.81	14.4	11.75	20.04
  Town Docks	3.63	3.63	2.63	3.77	2.63	2.63	2.85	3.17	3.17	3.13	4.19	3.32
  Par 3 Golf Course	9.07	8.59	8.19	7.05	6.45	5.71	7.94	9.20	8.32	7.70	9.19	8.68
  Underground Utility Fund	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.25	1.00	1.00
  Coastal Management Fund	0.00	0.00	0.00	0.00	0.00	0.00	1.00	1.00	1.50	1.75	1.00	1.00
  Kruesler Park	2.20	2.20	2.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
  Risk Fund	1.50	1.00	1.00	1.00	1.00	1.00	1.00	1.16	1.16	1.66	1.16	1.63
  Health Fund	1.10	1.10	0.53	0.80	0.79	0.79	0.79	0.97	1.01	1.01	0.92	0.92
  OPEB Trust	0.50	0.50	0.45	0.72	0.73	0.73	0.73	0.90	0.95	0.95	0.98	0.83
  Retirement Fund	0.00	0.00	0.00	0.50	0.71	0.71	0.71	0.79	0.79	0.79	0.61	1.16
  Total Authorized Positions	410.39	399.98	367.33	362.65	353.94	348.94	360.18	365.09	362.87	370.87	355.76	362.24

  
  

  Note: See personal complement information on page 16 for more details, including information on the changes in bold print above.

  
  

  FY20 Budget Presentation

  
  

  There are two sets of documents that have been provided to the Town Council and the public. One document contains the program‐by‐program detail of the General fund and other fund budgets. The other document, which can be found online, contains the budget “flex sheets” which show the budget detail by line item and the budget detail sheets for certain accounts throughout the General Fund. The detail sheets represent the detail that the budget team was presented when we began the budget review process. They have not been updated to reflect cuts that were made during this year’s budget review.

  In addition, the Departments prepared a memorandum that is included in each department section of this document, that describes in detail the major changes for each program.

  To ensure full transparency, relative to the methodology for apportioning health insurance and retirement costs, please note the following:

  vi

  

  Executive Summary

  Town of Palm Beach

  

  • Health Insurance costs are calculated and then allocated throughout the budget on a per Full‐Time Equivalent (FTE) basis. The Health costs per FTE for FY20 is $10,717.

  • Retirement costs are actuarially determined and then allocated throughout the budget per FTE for current and legacy plan costs. The Town’s actuarially determined contribution is $10,542,818. Legacy plan costs represent $8,992,451 of the total and the costs for the ongoing plan are $1,550,367. The breakdown by active full time employee group as of the most recent actuarial report dated September 30, 2018 is shown below.

    
    

    	FTE	Legacy Plan	Ongoing plan	Total Contribution
    General	164	2,524,579	751,958	3,276,537
    Lifeguard	4	200,830	9,688	210,518
    Police	50	2,830,191	370,590	3,200,781
    Fire‐Rescue	57	3,436,851	418,131	3,854,982
    Total	275	8,992,451	1,550,367	10,542,818

    
    

    FY19 General Fund Revenues Property Taxes

    The General Fund is the only fund to directly use property taxes as a revenue source. Property taxes (ad valorem taxes) represent the largest revenue source. The Town’s portion of the total millage rate in FY19 was 19.24%. This means for every $100 paid in taxes only $19.24 stays in the Town.

    

    Below are the taxing districts and the adopted millage rates for FY19 with the total amount of taxes paid to each of the districts by Palm Beach Property owners. The biggest beneficiaries of Town of Palm Beach property owners’ taxes are Palm Beach County and Palm Beach County School District collecting 70.38% of all taxes paid in the Town followed by the Town of Palm Beach at 19.24%.

    
    

    TAXING DISTRICTS

    
    

    FY19

    Adopted Millage Rates

    
    

    Taxes per Million

    
    

    % of Total

    Total Taxes Paid by Palm Beach Property Owners

    Palm Beach County Schools	6.5720	$ 6,572	40.33%	$113,644,163
    Palm Beach County	4.8980	$ 4,898	30.05%	$84,697,065
    Town of Palm Beach	3.1350	$ 3,135	19.24%	$54,210,963
    Florida Inland Navigation District	0.7261	$ 726	4.46%	$12,555,847
    Children Services Council	0.6403	$ 640	3.93%	$11,072,179
    Health Care District	0.2519	$ 252	1.55%	$4,355,898
    Everglades Construction	0.0417	$ 42	0.26%	$721,084
    South Florida Water Management	0.0320	$ 32	0.20%	$553,350

    
    

    Total 16.2970

    vii

    $ 16,297

    100.00% $281,810,548

    

    Executive Summary

    Town of Palm Beach

    

    The total taxes paid per million of taxable value in the Town in FY19 was $16,297. Of that amount,

    $3,135 stayed in the Town to pay for services and the remaining $13,162 went to other taxing districts. Below is the breakdown by taxing district for a $1 million homesteaded property using the FY19 tax rates.

    
    

    

    
    

    FY20 Millage Rate

    Appearing on the following page is a millage rate table that showing the recommended FY20 millage rate versus the FY19 millage. The recommended FY20 millage rate of 3.0681 represents a 2.13% reduction from FY19, which is a $5 per million decrease for homesteaded properties.

    The State of Florida requires the Town to calculate a rolled‐back millage rate. The rolled‐back rate is defined as the millage rate which provides the same property tax revenue for each taxing authority as was levied during the previous year (exclusive of new construction, additions, rehabilitative improvements increasing assessed value by at least 100%, annexations, deletions). The proposed millage is 3.23% over the rolled back rate of 2.972. The rolled‐back millage rate would represent a 5.2% decrease in the millage and would provide the homestead property owner a $98 per million reduction in taxes. The rolled‐back rate is required to be announced at the public hearings in September.

    

    Executive Summary

    Town of Palm Beach

    

    
    

    	FY19 Millage Rate	FY20 Millage Rate
    Millage Rate	3.1350	3.0681
    Tax Revenue	$54,210,963	$55,978,971
    Revenue Increase over FY19	n/a	$1,767,937
    Millage % Increase/Decrease vs. FY19	n/a	‐2.13%
    Homestead Value Increased by 1.9%	$1,000,000	$1,019,000
    Town Taxes	$2,978	$2,973
    Increase/(Decrease) over FY19	n/a	($5)
    Non Homestead Tax Increase Ave 5.82%	n/a	$115

    There are a number of revenue types in the General Fund, categorized on the table below:

    Revenue	FY2019	FY2020	FY19 vs. FY20 Difference	% Change
    Ad Valorem Taxes	$54,210,963	$55,978,900	$ 1,767,937	3.26%
    Non Ad Valorem Taxes	6,307,000	6,459,000	152,000	2.41%
    Licenses & Permits	10,583,108	10,843,800	260,692	2.46%
    Intergovernmental	1,076,255	1,099,600	23,345	2.17%
    Charges for Services	4,395,558	6,200,719	1,805,161	41.07%
    Fines and Forfeitures	1,171,000	942,000	(229,000)	‐19.56%
    Investment Earnings	828,000	1,230,000	402,000	48.55%
    Miscellaneous	435,964	476,247	40,283	9.24%
    Transfers from Enterprise Funds	1,307,160	585,000	(722,160)	‐55.25%
    Transfers from Equipment Replacement Fund	780,421	‐	(780,421)	‐100.00%
    Transfers from unassigned fund balance for Contingency and Compensated Absences	1,370,789	1,083,000	(287,789)	‐20.99%
    Total Revenues	$82,466,218	$84,898,266	$ 2,432,048	2.95%

    Significant highlights for General Fund FY20 revenues include:

    
    

• Based upon the Property Appraiser's Preliminary Certification issued June 30, 2019, existing property taxable values in the Town have risen 5.82% over the prior year. The total taxable value is $19,205,933,588.

• The Non Ad Valorem tax revenue has increased based on current trends.

• The increase in Licenses and Permits is based on current trends in revenue, but budgeted conservatively.

• Intergovernmental revenue increase is due to slight increases in state shared revenues.

  

  Executive Summary

  Town of Palm Beach

  

• Charges for services include a large increase of $1,805,161. The increase is due to a large increase in special assignment overtime revenue from two new large contracts. A corresponding increase in police special assignment overtime costs is shown in the Police Department budget. In addition, Recreation Department fees are increasing due to the anticipated opening of the Recreation Center and the new fees associated with programs and services. A Resolution is included in the backup for review and adoption if the Town Council approves the new fee schedule.

• We are proposing increases in parking meter and parking placard fees. The last time these fees were increased was in 2011. These additional revenues have not been included in the budget and the details of the increases can be found later in the document with the proposed Resolution No. 50‐2019.

• Fines and forfeiture revenue decreased based on improved compliance and parking enforcement officers assigned to other duties such as traffic control. In addition, staffing shortages in parking control have also contributed to the decrease in revenue.

• The interfund transfers represent a transfer of $585,000 from the Town Docks and Par 3 Golf Course enterprise funds. This amount is $722,160 less than the FY19 transfer. In FY19 these enterprise funds were created and the recreation center and tennis revenues/expenses were transferred to the General Fund. In order to cover the net costs for the first transition year the transfer was increased from the Marina fund to cover the recreation subsidy. In FY20 the transfer is reduced back to the original amount used in FY18.

• The transfer from the Equipment Replacement Fund in FY19 represented funds that were set aside for beach cleaning equipment that will not be replaced and the savings on the purchase of the quint fire truck totaling $780,421. No transfer is included in the FY20 budget.

  
  

  General Fund Expenditures

  General Fund expenditures have increased by 2.95% from FY19. The details by expenditure category are shown in the table on the following page.

  

  Executive Summary

  Town of Palm Beach

  

  
  

  Expenditure Category	FY2019	FY2020	FY19 vs. FY20 Difference	% Change
  Salary and Wages	$25,800,355	$26,604,601	$ 804,246	3.12%
  Pension Benefits	10,514,497	11,043,453	528,956	5.03%
  Other Employee Benefits	7,094,515	7,183,033	88,518	1.25%
  Contractual	10,000,741	10,682,513	681,772	6.82%
  Commodities	1,775,363	1,753,420	(21,943)	‐1.24%
  Depreciation/Capital Outlay	2,404,707	2,422,703	17,996	0.75%
  Subtotal Operating Expenditures	57,590,178	59,689,723	2,099,545	3.65%
  Special Assignment OT	400,000	1,400,000	1,000,000	250.00%
  Library	345,058	352,650	7,592	2.20%
  Transfer to the Risk Insurance Fund	1,898,059	1,900,819	2,760	0.15%
  Transfer to Capital Improvement Program	2,200,000	2,420,000	220,000	10.00%
  Transfer to Underground Utility Fund	135,000	144,450	9,450	7.00%
  Transfer to the Debt Service Fund	5,994,738	5,983,913	(10,825)	‐0.18%
  Transfer to Coastal Management Fund	7,349,124	6,976,711	(372,413)	‐5.07%
  Extraordinary Transfer to Retirement Fund	5,420,000	5,420,000	‐	0.00%
  Additional Contribution for UAAL Amort.	574,061	‐	(574,061)	‐100.00%
  Contingency	560,000	610,000	50,000	8.93%
  Subtotal Transfers and Contingency	24,876,040	25,208,543	332,503	1.34%
  Total General Fund	$ 82,466,218	$ 84,898,266	$ 2,432,048	2.95%

  
  

  Highlights for General Fund expenditures are as follows:

  
  

  Total operating expenditures increased $2,099,545 or 3.65% from FY19. Total transfers and other expenses increased $332,503 or 1.34%.

  
  

  Operating Expenditures:

• Salary and wages increased $804,246 due to the implementation costs of the compensation study which also includes the addition of 3 firefighters.

• The total annual required contribution for the defined benefit plan (DB) and defined contribution (DC) pension benefits increased by a total of $528,956. Defined benefit plan increases were due to assumption changes, including the investment return, and salary growth assumptions and past losses. Defined Contribution costs increased by $10,619 because of the increases in salaries.

• Other employee benefit costs increased by $88,518 or 1.25%. Health insurance costs remained flat due to improved claims performance and fewer employees, FICA tax increased by $179,735 due to the increase in the salary budget. The Longevity/Bonus program decreased by $36,641 due to the phasing out of the longevity program accomplished through retirements. There were also decreases in incentive pay of

  $22,508.

• Included in Other Employee Benefits is the Transfer to the OPEB trust. The transfer to the OPEB trust fund decreased by $12,369. In the recent actuarial report, the Town’s funding level was 107.4% funded. The Investment Advisory Committee is recommending a

  

  Executive Summary

  Town of Palm Beach

  

  reduction in the investment return assumption from 6.5% to 6%. This recommendation will allow for less exposure to market volatility if returns are below the estimated benchmark and if retiree health claims are higher than anticipated.

• The increase in contractual costs ($681,772) is due in part to an increase from West Palm Beach for the sewage treatment and disposal costs of $68,745. Other increases include: consulting for code reform $105,000; landscape contracting $123,537; special recreation contracts $58,800; other contracted services $121,198; electric $49,685; water $65,080; hardware $43,015; software maintenance $113,825; bank charges $25,360. These increases are offset by decreases in other contractual line items. The special recreation contracts will be offset by revenues received.

• The decrease in commodities is mostly due to decreases in office and maintenance supplies ($6,537), vehicle maintenance supplies ($15,100), uniforms ($11,347), and training ($6,992).

• Depreciation/Capital outlay costs decreased due to a review of equipment which extended of the useful life ($25,865). This decrease was partially offset by an increase in capital equipment purchases ($55,000).

• The funding for the Four Arts Library increased by 2.2%. Last year we recommended tying the increase to CPI with a cap of 3%. The CPI 12‐month change through April for the Miami‐Fort Lauderdale‐West Palm Beach was 2.2%.

  
  

  Transfers and Other:

  
  

• The additional $1 million in police special assignment overtime is due to two new large contracts, but is more than offset by the increase in revenues.

• The transfer to the Risk Fund remained flat.

• The transfer to the Capital Improvement Fund increased by ($220,000) or 10% over FY19.

• The transfer to the Underground Utility Fund represents the transfer of funds to pay for the Project Manager’s salary and benefits.

• The transfer to the debt service fund decreased by $10,825.

• Coastal funding decreased by $372,413 due to anticipated Federal and State grants.

• The extraordinary transfer to the retirement fund to accelerate improvements to the UAAL remained at $5,420,000.

• The additional contribution for the UAAL amortization was budgeted at $1,440,000 in FY19. The Town Council decided to adopt a hybrid amortization and the balance shown of $574,061 is the savings. The remaining amount was allocated to each department based on the increased cost of the amortization.

• Contingency is funded at 1% of operating expenditures. Absent extraordinary unforeseen circumstances, this amount should be enough to cover unexpected expenditures.

Executive Summary

Town of Palm Beach

Funding By Department

The three largest departments, Police, Fire‐Rescue and Public Works, account for over 55% of the Town budget. The transfers mentioned above account for another 28% for a total of 83% of the total Town budget. All other general government and administrative departments make up the balance of 17%. The chart below provides a graphic example of expenditures by each department and transfer.

Executive Summary

Town of Palm Beach

How each $1,000 of Town Property Tax Revenue is spent

Fund Balance

The General Fund Unassigned Fund Balance as of September 30, 2018 was $23,063,128. This amount was $6,548,855 above the policy required minimum. The FY20 budget includes a transfer of $610,000 from fund balance to fund the contingency reserve and $473,000 from the reserve for compensated absences to fund the compensated absence payouts. After the contingency transfer, the remaining balance in the unassigned fund balances will be $5,938,855. Staff recommended using $2,641,699 of this reserve to fund the increase to the UAAL as a result of the compensation increases for all town employees and the pension changes for police and firefighters. If the UAAL is paid in full, the annual savings is $170,000. A Budget Amendment Ordinance will be presented at the July 9th Town Council meeting for your review and adoption on first reading to transfer the reserves to the Retirement Fund.

Based on results thus far for FY19, we expect to add an estimated surplus of over $2 million to the unassigned fund balance at FY19 year end. This surplus is the result of many vacant positions that have not been filled and higher than anticipated revenues for building and other permits. If we experience a storm event or other unforeseen expenditures, this amount will decrease.

Personnel Complement

The Total FTE includes full time employees and part time no benefits employees (PTNB). The total personnel complement (for all funds Townwide) for FY20 is 362.24 full‐time equivalent personnel (FTE), which is a net increase of 6.48 FTE from the adopted FY19 budget. Currently, 18 positions have been frozen to be further studied, reclassified or eliminated, of these 18, 2 have been

Executive Summary

Town of Palm Beach

eliminated in the FY20 budget in addition to other reductions that have been made throughout the year. A chart of the FTE by department is shown below with a two year history. The chart shows full time employees which decreased by 1.0 FTE and PTNB staffing which increased by 7.48 FTE (mostly due to increased staffing at the Recreation Center which was closed for FY19). The FTE history going back to FY09 can be found earlier in this summary. The changes in the FTE for both full time and part time staffing are described in detail after the table.

Executive Summary

Town of Palm Beach

The increase of 6.48 FTEs in FY20 made up of the following additions and reductions and other small reallocations across programs:

Position changes:

• Addition of 3 firefighters to provide the additional Kelly Day

• 1 FTE reduction in Planning Zoning and Building with the elimination of the Zoning Tech position

• 3 FTE reduction in Public Works including the elimination of the Street/Sign painter, the Project Engineer and Electrician Supervisor

• .87 FTE reduction at Town Docks

• .51 FTE reduction at the Par 3 golf course made up of part time positions replaced with contractual employees.

• 8.34 FTE increase in part time no benefit positions to staff the 7 day a week operations at the new recreation center and tennis center. The Recreation Department in FY19 had cut back on staff due to the closing of the recreation center for construction. Once the new recreation center is open in late 2019, the Recreation Department will need to be at full staffing to accommodate the additional services offered in the new center.

• .35 FTE increase for a part time vehicle technician in the Police Department.

• Increase of .55 allocated to the Retirement Fund for increased role of Town for the administration of the Retirement system and DC plan.

  Other Funds

  Below are highlights from the budgets for other Town funds. Additional information can be found at the tabs in the back of the Budget Document behind the General Fund information. The Town’s other funds include: Special Revenue, Debt Service, Capital Improvement Funds, Enterprise Funds (Town Docks and Par 3 Golf Course), Internal Service Funds (Health, Risk, Equipment Replacement), and Trust Funds (Pension and OPEB Trust).

  Special Revenue Fund (122) Townwide Underground Utility Project

  The Townwide Underground Utility Project fund accounts for the project costs and associated assessments and borrowings for the project. During FY20, we expect to complete Phase 2 North, continue construction of Phases 2 South and 3 North and begin construction of Phase 3 South of the project. Engineering design is underway for Phases 4 and 5 of the project.

  Debt Service Funds (205, 206)

  The Debt Service Funds provide for the payment of principal and interest on the Town’s outstanding bonds. During FY10, the Town authorized the issuance of $57,035,000 for a portion

  

  Executive Summary

  Town of Palm Beach

  

  of the Town’s Accelerated Capital Improvement Program (ACIP) and refunding all of the Town’s existing debt. In addition, bonds totaling $14,770,000 were issued for the Worth Avenue Commercial District Project. On August 25, 2016, the Town issued bonds to refund the 2010A & 2010B bonds. This transaction produced gross savings of $8,900,539 over 23 years. The net present value savings was $6,895,965 or 13.35%.

  In 2013, the Town issued $55,590,000 for the second phase of the ACIP, “bondable” coastal projects, and the Town’s portion of the Par 3 clubhouse project.

  
  

  In the fall of 2018, the Town issued $56,040,000 in General Obligation bonds for the Townwide Undergrounding project.

  
  

  The Town’s outstanding Revenue Bond debt as of September 30, 2019 is shown on the table below:

  Year Issued	Outstanding Principal Balance September 30, 2019	Purpose
  2010A	$5,870,000	Remaining Balance on First Phase of ACIP Debt
  2010B	$330,000	Remaining Balance on Original Worth Ave Debt
  2016A	$39,320,000	First Phase of the ACIP and Refund Outstanding Debt
  2016B	$10,255,000	Worth Avenue Commercial District Project
  2013	$50,640,000	Second Phase of ACIP, Bondable Coastal, and Par 3 Clubhouse
  2018	$55,350,000	General Obligation Bonds for Townwide Undergrounding Project
  Total	$161,765,000

  
  

  As of September 30, 2019, the Town’s net bonded debt will amount to 16.9% of the legal limit of

  $958,601,472 (5% of preliminary FY20 taxable value of $19,172,029,433).

  The 2016A and 2013 Series Revenue Bonds debt service is funded from non‐ad valorem revenues. A portion of each ($199,813) is funded through the Recreation Enterprise Fund for the Town’s portion of the Par 3 golf course and clubhouse renovation, and a portion is funded through the Coastal Management Fund ($544,107). The non‐ad valorem revenue transfer from the General Fund for FY19 is $5,983,913.

  The 2016B Series Revenue Bonds debt service appropriation of $708,600 is funded through non ad valorem assessments on the property owners within the Worth Avenue Assessment District.

  

  Executive Summary

  Town of Palm Beach

  

  The Town has issued General Obligation bonds for the Underground Utility Project. These bonds shall be payable first from the Underground Utility Project special assessments and, to the extent the assessments are insufficient to pay debt service or not assessed, ad valorem taxes will be levied and collected on all taxable property in the Town to pay principal and interest on the bonds as they become due and payable. Total debt service for FY20 on these bonds will be $3,398,350.

  Capital Improvement Funds (307, 309, 311, 314)

  For FY20, the following items totaling $6,435,000 are included in the Capital Improvement Fund (307):

  • Pavement Management ‐ $1,000,000

  • Drainage Improvements ‐ $1,300,000

  • Sanitary Sewage System Improvements ‐ $1,715,000

  • Water main improvements (WPB) ‐ $800,000 (Funded by West Palm Beach)

  • Landfill site maintenance ‐ $30,000

  • Facility improvements ‐ $1,590,000

The transfer to the Capital Improvement Fund has increased by $220,000.

Bonds funds in the ACIP II fund are projected to be fully used before the end of the current fiscal year.

Coastal Management

The Coastal Management Fund (309) is used in part to fund the construction costs of the coastal projects. The details of the FY20 budget for Coastal Management can be found in the Annual Budget Document. This plan has been updated by Public Works to include estimates for future projects based upon current costs and to include the Mid‐town seawall and groins in the Mid‐ town beach area. The transfer to the Coastal Management Fund decreased $369,413 to

$6,979,711.

Enterprise Funds (401, 402)

Town Docks

Town Docks revenues are expected to decrease in FY20, as renovation of the Town Docks is scheduled to begin in May of 2020. However, for the upcoming season, there are strategically proposed increases for several fees. A modified annual lease (December 1, 2019, to April 30, 2020) is approximately 55% of the originally proposed FY20 annual rate; with winter daily and winter monthly single‐phase slip fees all proposed to increase by 5%. For three‐phase slips, a modified annual (December 1, 2019, to April 30, 2020) is also approximately 55% of the originally

Executive Summary

Town of Palm Beach

proposed FY20 annual rate; winter daily and winter monthly rates are proposed to increase for these slips to be competitive with Palm Harbor (generally the highest market in the immediate area). Forecasts for FY20 anticipate that the Town Docks will realize a gross operating profit of

$1,249,024, and a net profit of $487,895 after depreciation capital, contingency and the transfer to the general fund.

We are annually accruing funds in the Dock Replacement Reserve, which, at the end of FY18 totaled $2,587,882. In FY18, $1,700,000 was expended from this reserve to fund the engineering and permitting costs of the project. We expect the FY2019 ending balance to be approximately

$3,075,000. We have also been approved for a FIND grant for up to $325,000 for the Town Docks project. These funds will be added to the reserve balance once they are received. We are applying for additional grants from FIND for this project which will further add to funding available for the project.

Par 3 Golf Course

Golf Course revenues are projected to increase during FY20, if Town Council approves the various fee increase recommendations, as you traditionally do each year. Recommendations for fee changes for FY20 include increases to multiple green fees and passes to strategically capitalize on participation at our unique facility, create peak usage and maximum revenue. It is probable that these fee adjustments would generate over $35,000 in additional revenue. The Par 3 Golf Course anticipates a gross profit of $681,207 in FY20 before depreciation, equipment replacement purchases, depreciation on the clubhouse and golf course ($306,613), capital expenses, debt service, contingency and the transfer to the general fund. After these expenses the Par 3 Golf course will reflect a net loss of $46,134. The loss is due to the depreciation on recent asset acquisitions including additional golf carts which may result in additional income that could offset a portion of the anticipated loss.

Resolutions are included in the backup for the proposed fee increases.

Internal Service Funds (501, 502, 320)

The transfer to the Risk Fund (501) has remained flat from FY19 to FY20.

The Health Insurance Fund (502) transfer has also remained flat due to favorable claims experience and fewer employees in the plan.

The Equipment Replacement Fund (320) contains the accumulated depreciation of all fixed assets over the established thresholds of $5,000 for capital equipment and $3,000 for computer

Executive Summary

Town of Palm Beach

equipment. A detailed listing of planned equipment purchases is located in the Internal Service Funds section of the Annual Budget Document.

During the year, staff completed a thorough review of Town assets. The Town Manager also approved an increase in the capital asset thresholds from $2,500 to $5,000 for capital equipment and $1,500 to $3,000 for computer equipment. The review and threshold increase created excess reserves in this fund of $990,760 and improved efficiency by reducing the number of small assets that are tracked. Staff may propose to use a portion of these funds to improve technology in the Planning, Zoning and Building Department.

Trust Funds (600 & 610)

Retirement (600)

The FY20 actuarially determined contribution to the DB plan totals $10,542,818. In addition, the police and firefighter benefit changes were added to the contribution. The amounts by employee group are shown on the following page versus the FY19 contribution.

Town DB and DC Retirement Contributions

The historical 10 year trend in Town actuarially determined employer contributions (ADEC) for the defined benefit pensions are shown on the chart on the following page.

Executive Summary

Town of Palm Beach

The 10‐year trend for employee contributions is shown below:

Based on pension changes, the Town no longer provides a DC plan for public safety employees. For General Employees and Lifeguards, the new plan was modified and now the Town contributes a mandatory match of 3% and an optional match of 2% to the Defined Contribution (DC) plan. Total employer contributions to the DC plan are shown in the table on the following page:

Executive Summary

Town of Palm Beach

Employer Defined Contribution Funding

The Employer Defined Contribution trend since inception in 2012 is shown below. Police and firefighters no longer contribute to the DC plan and are in a DB plan only.

Health Insurance (OPEB) Trust (610)

The actuarially determined transfer to the OPEB trust from the General Fund in the FY20 budget is $423,916. This amount is $12,369 less than FY19. The Investment Advisory Committee is recommending lowering the investment return assumption from 6.5% to 6.0%. The amount included in the budget represents the 6% return assumption. The funded ratio in the actuarial report was 107.4% for the 6% assumption. The new actuary for this plan prepared estimates at 6.5%, 6% and 5.75%. The actuary also reviewed the amortization period used in the prior report. The actuary recommended that we reduce the amortization period from 15 years to 5 years. Typically longer amortization periods are chosen for underfunded plans, since the OPEB Trust is over funded, a shorter amortization period is preferred. As you will recall, the Investment Advisory Committee recommended lowering the investment return assumption from 7% to 6.5% in FY19. Since the updated actuarial results show the plan overfunded, the Investment Advisory Committee is recommending an additional decrease in the return assumption to 6%. They also considered lowering it to 5.75% but it would have added $302,811 to the annual cost and reduced

Executive Summary

Town of Palm Beach

the funded ratio to 103.5%. They plan to review the assumption each year to determine if lowering the rate is in the best interest of the town.

The Town’s balance in the OPEB trust fund continues to be well ahead of other government agencies across the country.

Worth Avenue Special Assessment District

The budget for the Worth Avenue Special Assessment District is included in the Capital Funds and the Debt Service section of the budget document. The budget includes funding for maintenance and debt service. These costs are fully offset by the assessments charged to property owners within the district.

Tentative Millage Rate

Resolution No. 49‐2019 adopting a tentative millage rate of 3.1350 is included in the backup. This rate is set slightly higher than the proposed rate of 3.0735 in case changed circumstances and/or Town Council decision later this summer require the final millage rate to be set higher than our proposed rate. Florida law requires a first class mailing to all taxpayers if the millage rate is increased above the tentative millage rate adopted by the Town Council prior to the September public hearings. The final millage rate will be set at the public hearings in September.

Long‐Term Financial Plan

The Long‐Term Financial Plan (LTFP) has been updated with the FY19 adopted budget and the FY20 proposed budget. The entire document including the trend analysis, forecast and other funds trends and forecast can be found on the Town’s website and a copy is included in the backup materials.

The forecast is summarized below. We prepared a forecast calculation for property tax revenue for two separate scenarios.

1. Property tax revenue was increased by 3.25% per year as has been done in the past. The results are shown in the first table. This forecast produces deficits for each year but the final year of the forecast. In FY21, due to construction on the new marina, there will be a decrease in revenues and it is unlikely that there will be revenues available to be transferred to the General Fund. In addition, pension costs will include the last year of the 2015 losses and the additional costs from the increases related to the compensation study.

   
   

   	FY21	FY22	FY23	FY24	FY25	FY26	FY27	FY28	FY29
   Revenues	86,884,037	89,959,905	92,373,748	94,875,556	97,428,164	100,115,998	102,883,604	105,824,344	108,702,009
   Expenditures	88,715,055	91,439,755	93,039,112	95,442,306	98,456,764	101,040,696	103,143,259	104,871,702	107,417,108
   Surplus/(Deficit)	(1,831,018)	(1,480,250)	(665,364)	(566,750)	(1,028,600)	(924,698)	(259,655)	(952,642)	1,284,901

   

   Executive Summary

   Town of Palm Beach

   

2. The second chart below uses property tax to balance the forecast. If this option were used, 1the FY21 budget would contain a property tax revenue increase of 6.52%. Using the FY20 taxable value increase (5.63%) applied in FY21, the corresponding millage rate increase would be .84% and would result in an $83 increase per million of taxable value. It is far too early in the process to predict what the property tax increase will be for FY21. In addition, since the loss of Marina revenue is a one‐time occurrence, General Fund reserves or coastal reserves could be used to offset the loss and make up part of the deficit and thus bridge the gap until Marina and ground lease revenues are available.

   
   

   	FY21	FY22	FY23	FY24	FY25	FY26	FY27	FY28	FY29
   Revenues	88,715,055	91,439,755	93,039,112	95,442,306	98,456,764	101,040,696	103,143,259	104,871,702	107,417,108
   Expenditures	88,715,055	91,439,755	93,039,112	95,442,306	98,456,764	101,040,696	103,143,259	104,871,702	107,417,108
   % Tax Increase	6.52%	2.56%	1.84%	3.06%	3.94%	3.04%	2.24%	1.51%	2.83%

   
   

   Upcoming Meeting Schedule

   
   

   The State mandated schedule requires that two public hearings be held in September to provide for the final adoption of the Town’s FY20 budget and millage rate. The proposed public hearing meeting dates are as follows: These dates are presented in the Millage Rate Resolution and provided to the Property Appraiser.

   
   

   • First Public Hearing – September 10, 2019 at 5:01pm

   • Second Public Hearing – September 18, 2019 at 5:01pm

Conclusion

This concludes the executive summary portion of the FY20 proposed budget. Please see the documents that follow this summary for detailed information about the FY20 budget. Staff will be prepared to answer any questions you may have.

Respectfully Submitted,

Kirk Blouin Town Manager

cc: Jay Boodheshwar, Deputy Town Manager Department Directors

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TABLE OF CONTENTS‌

TABLE OF CONTENTS 1

BUDGET SUMMARY BY FUND TYPE 5

GENERAL FUND REVENUES AND EXPENDITURES 7

REVENUES BY TYPE 9

EXPENDITURES BY TYPE 15

EXPENDITURES BY FUNCTION 16

EXPENDITURES BY DEPARTMENT 17

TOWN MANAGER’S OFFICE MEMO 21

PROGRAM: LEGISLATIVE 111 25

PROGRAM: GENERAL GOVERNMENT 113 27

DEPARTMENT: TOWN MANAGER’S OFFICE 29

PROGRAM: ADMINISTRATIVE MANAGEMENT 121 30

TOWN CLERK MEMO 33

PROGRAM: TOWN CLERK 131 35

PROGRAM: ADVICE AND LITIGATION 122 37

INFORMATION TECHONOLOGY MEMO 39

PROGRAM: INFORMATION TECHNOLOGY 125 41

HUMAN RESOURCES MEMO 45

DEPARTMENT: HUMAN RESOURCES 47

FINANCE DEPARTMENT MEMO 49

FINANCE DEPARTMENT ORGANIZATION CHART 51

DEPARTMENT: FINANCE 52

PROGRAM: FINANCIAL MANAGEMENT 54

PROGRAM: PURCHASING 144 56

PZB MEMO 59

PLANNING, ZONING AND BUILDING ORGANIZATIONAL CHART 61

DEPARTMENT: PLANNING, ZONING AND BUILDING 62

PROGRAM: PLANNING AND ZONING 211 65

PROGRAM: PERMIT ISSUANCE 212 67

PROGRAM: INSPECTION & COMPLIANCE 213 69

PROGRAM: LANDMARKS PRESERVATION 214 71

PROGRAM: FIRE PREVENTION 215 73

PROGRAM: CODE ENFORCEMENT 216 75

RECREATION MEMO 77

RECREATION DEPARTMENT ORGANIZATIONAL CHART 97

DEPARTMENT: RECREATION 98

PROGRAM: ADMINISTRATION 311 100

PROGRAM: TENNIS 312 102

PROGRAM: RECREATION CENTER 313 104

FIRE RESCUE MEMO 107

FIRE RESCUE ORGANIZATIONAL CHART 109

DEPARTMENT: FIRE RESCUE 110

PROGRAM: FIRE ADMINISTRATION 411 112

PROGRAM: OPERATIONS 417 114

PROGRAM: TRAINING 418 116

PROGRAM: OCEAN RESCUE 419 117

POLICE MEMO 119

PALM BEACH POLICE DEPARTMENT: ORGANIZATIONAL CHART 123

DEPARTMENT: POLICE DEPARTMENT 124

PROGRAM: ADMINISTRATIVE MANAGEMENT 421 127

PROGRAM: ORGANIZED CRIME VICE AND NARCOTICS (OCVAN) 422 129

PROGRAM: RECORDS INFORMATION SYSTEM UNIT 423 131

PROGRAM: TRAINING AND COMMUNITY RELATIONS UNIT (TCR) 424 133

PROGRAM: COMMUNICATIONS UNIT 425 135

PROGRAM: CRIME SCENE/EVIDENCE UNIT 426 137

PROGRAM: PATROL 428 139

PROGRAM: CRIMINAL INVESTIGATION 429 141

PROGRAM: PARKING CONTROL UNIT 430 143

PUBLIC WORKS MEMO 145

PUBLIC WORKS ORGANIZATIONAL CHART 151

DEPARTMENT: PUBLIC WORKS 152

PROGRAM: ADMINISTRATIVE MANAGEMENT 511 154

PROGRAM: STREET REPAIR & MAINTENANCE 521 156

PROGRAM: TRAFFIC CONTROL 523 158

PROGRAM: STREET LIGHTING 524 160

PROGRAM: STORM SEWER MAINTENANCE 531 161

PROGRAM: SANITARY SEWER MAINTENANCE 532 163

PROGRAM: SANITARY SEWER TREATMENT 533 165

PROGRAM: RESIDENTIAL COLLECTION 541 166

PROGRAM: COMMERCIAL COLLECTION 542 168

PROGRAM: REFUSE DISPOSAL 543 169

PROGRAM: YARD TRASH COLLECTION 544 170

PROGRAM: RECYCLING 545 172

PROGRAM: BEACH CLEANING 173

PROGRAM: PARKS 551 174

PROGRAM: FACILITY MAINTENANCE 554 176

PROGRAM: GENERAL ENGINEERING SERVICES 561 178

PROGRAM: RIGHT OF WAY INSPECTIONS 565 180

PROGRAM: EQUIPMENT OPERATION & MAINTENANCE 571 181

PROGRAM 321: LIBRARY SERVICES 183

OTHER PROGRAMS 183

PROGRAMS 611 TO 625: TRANSFERS 184

PROGRAM 710: EMERGENCY MANAGEMENT 185

PROGRAM 711: CONTINGENT APPROPRIATIONS 186

FUND 122: TOWN-WIDE UNDERGROUND UTILITIES 187

GENERAL OBLIGATION BONDS 189

REVENUE BONDS 189

Legal Debt Margin 190

Debt Service Payments 191

Debt Summary 191

FUND 205: 2016A AND 2013 REVENUE BONDS 195

FUND 206: 2016B WORTH AVENUE REVENUE BOND 196

FUND 307: PAY-AS-YOU-GO CAPITAL IMPROVEMENT FUND 197

COASTAL MANAGEMENT MEMO 201

COASTAL 10-YEAR PLAN 204

FUND 309: COASTAL MANAGEMENT FUND 207

FUND: WORTH AVENUE MAINTENANCE FUND 311 209

FUND 314: 2013 ACCELERATED CAPITAL FUND 211

MARINA MEMO 213

FUND 401: MARINA ENTERPRISE FUND 219

PAR 3 MEMO 223

FUND 402: PAR 3 ENTERPRISE FUND 231

RISK MANAGEMENT MEMO 237

FUND 501: SELF INSURANCE FUND (RISK MANAGEMENT) 239

HEALTH AND OPEB MEMO 241

FUND 502: SELF INSURANCE (HEALTH BENEFIT) 243

FUND 320: EQUIPMENT REPLACEMENT FUND 245

RETIREMENT FUND 249

UNFUNDED ACTUARIAL ACCRUED LIABILITY (UAAL) 252

UAAL AND EMPLOYER CONTRIBUTION FORECAST 253

DEMOGRAPHIC INFORMATION 255

SUMMARY OF DEFINED BENEFIT PLAN PROVISIONS 256

FUND: EMPLOYEES RETIREMENT (600) 260

HEALTH INSURANCE TRUST (OPEB) 263

SUMMARY OF PLAN PROVISIONS 263

FUND 610: HEALTH INSURANCE TRUST 265

RESOLUTION 49-2019… 267

RESOLUTION 50-2019… 269

RESOLUTION 51-2019… 277

RESOLUTION 52-2019… 289

RESOLUTION 53-2019… 291

RESOLUTION 54-2019… 293

RESOLUTION 55-2019… 315

RESOLUTION 56-2019… 341

BUDGET SUMMARY BY FUND TYPE‌

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General Fund Revenues and Expenditures

Town of Palm Beach

GENERAL FUND REVENUES AND EXPENDITURES‌

Town of Palm Beach, Florida General Fund Revenues and Expenditures

Budget Comparison Fiscal Years 2019 - 2020

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REVENUES BY TYPE‌

Ad Valorem Taxes

$55,978,900 66.4%

Use of Fund Balance 1,083,000

1.3%

Miscellaneous 434,267

0.5%

Interest 1,230,000

1.5%

Fines and Forfeitures 942,000

1.1%

Grants 32,700

0.0%

Charges for Services 6,185,699

7.3%

General Use Tax 6,459,000

7.7%

Licenses/Permits 10,900,800

12.9%

Intergovernmental 1,066,900

1.3%

2017

2018

2019

2019

2020

% of

% Total

Taxes