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TOWN OF PALM BEACH, FLORIDA

COMPREHENSIVE ANNUAL BUDGET FISCAL YEAR 2022

(OCTOBER 1, 2021 – SEPTEMBER 30, 2022)

Mayor and Town Council

Danielle H. Moore, Mayor Margaret A. Zeidman, Town Council President

Bobbie Lindsay, Town Council President Pro-Tem Julie Araskog, Town Council Member

Ted Cooney, Town Council Member Lew Crampton, Town Council Member


Town Manager

Kirk Blouin



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Prepared by the Finance Department Jane LeClainche, Finance Director (561)838-5400

www.townofpalmbeach.com


TOWN

ORGANIZ

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OF PALM BEACH

ATIONAL STRUCTURE

CITIZENS OF PALM BEACH

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MAYOR

Danielle H. Moore

ELECT‌

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Lew Crampton

Ted Cooney

Julie Araskog

PRESIDENT PRO‐TEM

Bobbi Lindsay

PRESIDENT

Margaret A. Zeidman

TOWN COUNCIL


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DIRECTOR OF FINANCE

Jane Le Clainche


POLICE CHIEF

Nicholas Caristo

DIRECTOR OF PLANNING, ZONING AND BUILDING

Wayne Bergman

DEPUTY TOWN MANAGER

Jay Boodheshwar


ADVISORY BOARD AND COMMISSIONS


TOWN MANAGER

Kirk Blouin


TOWN ATTORNEY

John C. Randolph


FIRE‐RESCUE CHIEF

Darrel Donatto


DIRECTOR OF PUBLIC WORKS

H. Paul Brazil

ASSISTANT TOWN MANAGER

Carolyn Stone

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APPOINTS


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FY2022

GUIDE FOR READERS

Guide for Readers Town of Palm Beach‌


The following information might be helpful to the reader in finding information in the budget document for programs, services and financial information. The Town of Palm Beach Budget compiles financial and service delivery data in a single source document for easy reference. This guide explains the budget format and will assist in locating information that may be of particular interest. The budget is intended to serve four purposes.


THE BUDGET AS A POLICY DOCUMENT

As a policy document, the Budget indicates what services the Town of Palm Beach will provide during the upcoming fiscal year, and the reasons for these services. The Budget provides goals and objectives for each organizational unit in the Town of Palm Beach as well as the performance measures upon which programs will be monitored for the forthcoming fiscal year. All Town of Palm Beach funds are described in detail in their respective sections.


THE BUDGET AS AN OPERATIONS GUIDE

As an operations guide, the budget indicates how departments and funds are organized to provide services that will be delivered to the community. The Departments’ budget sections provide a mission statement, goals and objectives, organization chart, authorized personnel, revenue and expenditure summaries with descriptions, and performance measures for each Town of Palm Beach Department.


THE BUDGET AS A FINANCIAL PLAN

As a financial plan, the budget outlines the cost of the Town of Palm Beach services and how they will be funded. The Revenues and Expenditures Section provides an overview of the Budget including major revenue and expenditure breakdowns and categories for the following Funds: General, Special Revenue Funds, Debt Service, Capital, Enterprise, Internal Service Activity and Trust & Agency. The introductory section includes a budget message, Town-wide goals, demographic information, assessed value and millage rate information, Town history, a discussion of the Town of Palm Beach accounting structure and financial policies, a description of the budget preparation process and the financial structure. The budget summary section details the approved budget as well as a comparison of financial activity over a multi-year period with an analysis of the Town reserves.


THE BUDGET AS A COMMUNICATIONS DEVICE

The Budget is designed to be user friendly with summary information in text, charts, tables and graphs. A glossary of financial budget terms is included for your reference. In addition to the reader’s guide, the table of contents provides a listing of sections in the order in which they appear in this document, and includes to hyperlinks to help navigate the document. You can also click the image of a yacht at the bottom of each page beginning on page 8 to navigate back to the Table of Contents. The statistical section includes miscellaneous information relevant to the Town of Palm Beach. Should you have a question about the Town of Palm Beach that this document does not answer, please feel free to call The Finance Department at (561) 838-5444. This Budget Document is available on the Town’s web site, www.townofpalmbeach.com.


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FY2022

A STEP BY STEP GUIDE

Guide for Readers Town of Palm Beach


Given its size and the variety of information it contains, the budget document can be an overwhelming undertaking to review. The purpose of this section is to provide the reader with a guide to the document’s contents: where and how to find the information and how to understand or use the information.

The budget document has been prepared in a summary format intended to be easily understood by the public. The following describes each of its major sections:


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INTRODUCTION

The budget message or transmittal letter is the best place to start. It is most important in understanding where we have been and where we are going in the upcoming year. The letter provides a broad perspective of services provided and discusses taxes and millage rates, changes in operations, significant differences in revenues and expenditures, and the focus and direction of the budget year.

The introduction section also includes general information about the Town, its budget philosophy and process, financial policies (which form the foundation of the Town’s budget development and financial management processes), and other general information.


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BUDGET SUMMARY, GENERAL FUND, REVENUES, EXPENDITURES, DEPARTMENTAL TABS AND OTHER

The Budget Summary, General Fund, Revenues, Expenditures including Departmental and Other tabs include various presentations of the general fund budget. The Budget Summary section includes summary budget information for all funds and an analysis of Town reserves. The General Fund section includes a financial trend analysis of Revenues and Expenditures. The Revenues tab includes a detailed five-year general fund revenue history, as well as narrative and charts regarding major general fund revenue history. The Expenditures tab includes an exhibit containing four years of expenditure history by program, as well as summary budget charts.

An overview of each department/program, the largest portion of the General Fund budget, is included in this section. Each department’s section may include the following: A revenue and expenditure summary, personnel complements, an organizational chart, mission statement, goals and objectives, performance measures and workload indicators.


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SPECIAL REVENUE, DEBT SERVICE, CAPITAL, ENTERPRISE, INTERNAL SERVICE AND TRUST & AGENCY FUNDS

These sections include budget summaries, program descriptions, trend analyses and income statement analyses for the Town’s governmental (other than general), enterprise, internal service and trust & agency funds.


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APPENDIX

The appendix includes property tax and millage rate schedules, donation reserve account detail, financial policies, historical staffing levels, and other exhibits that may be helpful to the reader.

We sincerely hope this “how-to” has aided in finding and understanding information contained in the Town’s budget. If any point is unclear, or if additional information is necessary, please call the Finance Department at (561)838-5444. Should the same requests repeatedly occur, we will make an effort to incorporate clarifications in next year’s budget document.


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GOVERNMENT FINANCE OFFICERS ASSOCIATION‌

Distinguished Budget Presentation Award



PRESENTED TO


Town of Palm Beach

Florida


For the Fiscal Year Beginning

October 01, 2020


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Executive Director


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FY2022

S

Table of Contents‌

Town of Palm Beach

TABLE OF CONTENT


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INTRODUCTION


*The Table of Contents includes hyperlinks to help navigate the document. Also, clicking on the image of the yacht on the bottom of each page (starting on page 8) will bring you back to this page.

Organization Structure 2

Guide for Readers 3

GFOA Distinguished Budget Presentation Award 5

Table of Contents 7

Budget Message 13

Strategic Planning and Key Results Measurement 29

Introductory Information

Map 35

Town Overview/Demographics 36

Town History 37

Taxable Value and Millage Rate 39

Financial Policies 44

Budget Preparation Process 49

Budget Calendar 53

Financial Structure 54

Long-Term Financial Plan Forecast 59

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BUDGET SUMMARY

Fund Budget Overview 71

Budget Summary by Fund Type, Revenues and Expenditures 73

Summary of Major Revenues by Fund Type 75

Summary of Expenditure Classifications by Fund Type 78

Reserve Analysis 81

Capital Expenditures 91

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GENERAL FUND

General Fund Revenues and Expenditures Budget Comparison 93

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REVENUES

General Fund Revenues 95

Major Revenue Sources 100

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EXPENDITURES

General Fund Expenditures 109

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LEGISLATIVE

Legislative (111) 116


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Table of Contents

Town of Palm Beach

GENERAL GOVERNMENT

FY2022

General Government (113) 118

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TOWN MANAGER

Town Manager’s Office Organizational Chart 120

Administrative Management (121) 121

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TOWN CLERK

Town Clerk (131) 124

Town Clerk Revenue and Expenditure Summary. 125

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ADVICE AND LITIGATION

Advice and Litigation (122) 128

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INFORMATION TECHNOLOGY

Information Technology Organizational Chart 130

Information Technology (125) 130

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HUMAN RESOURCES

Human Resources Organizational Chart 136

Human Resources (123) 139

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FINANCE

Finance Organizational Chart 148

Finance Department Revenue and Expenditure Summary 151

Financial Management (141) 153

Purchasing (144) 156

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PLANNING, ZONING AND BUILDING

Planning, Zoning and Building Organizational Chart 162

Planning, Zoning and Building Department Revenue and Expenditure Summary 165

Planning and Zoning (211) 167

Landmarks Preservation (214) 170

Fire Prevention (215) 172

Code Enforcement (216) 175

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RECREATION

Recreation Organizational Chart 178

Recreation Department Revenue and Expenditure Summary 180

Recreation Administration (311) 182

Tennis (312) 184

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Recreation Center (313) 187


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Table of Contents

Town of Palm Beach

FIRE-RESCUE

FY2022

Fire-Rescue Department Organizational Chart 192

Fire-Rescue Department Revenue and Expenditure Summary 196

Fire Administration (411) 198

Operations (417) 201

Training (418) 204

Ocean Rescue (419) 207

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POLICE

Police Department Organizational Chart 210

Police Department Revenue and Expenditure Summary 214

Administrative Management (421) 216

Organized Crime Vice and Narcotics – OCVAN (422) 220

Records Information System Unit (423) 223

Training and Community Relations Unit – TCR (424) 225

Communications Unit (425) 228

Crime Scene/Evidence Unit (426) 230

Patrol (428) 232

Criminal Investigation Unit (429) 236

Parking Control Unit (430) 239

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PUBLIC WORKS

Public Works Department Organizational Chart 242

Public Works Department Revenue and Expenditure Summary 246

Administrative Management (511) 248

Street Repair and Maintenance (521) 250

Traffic Control (523) 252

Street Lighting (524) 254

Storm Sewer Maintenance (531) 256

Sanitary Sewer Maintenance (532) 259

Sanitary Sewage Treatment (533) 261

Residential Collection (541). 262

Commercial Collection (542) 264

Refuse Disposal (543) 266

Yard Trash Collection (544) 267

Recycling (545) 269

Landscape Maintenance (551) 271

Facility Maintenance (554) 273

General Engineering Services (561) 275


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Table of Contents Town of Palm Beach

Right of Way Inspections (565) 279

Equipment Operation and Maintenance (571) 281

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OTHER

Library Services (321) 284

Transfers to Other Funds (611 to 625) 285

Emergency Management (710) 286

Contingent Appropriations (711) 287

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SPECIAL REVENUE FUND

Town-wide Underground Utilities Fund (Fund 122) 290

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DEBT SERVICE

Debt Administration 294

2016A and 2019 Revenue Bonds (Fund 205) 300

2016B Worth Avenue Revenue Bond (Fund 206) 302

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CAPITAL FUNDS

Capital Funds 304

Impact of Capital Investments on Operating Budget 305

Capital Projects by Project Type and Fund 306

Capital Improvement Fund (Fund 307)

Pay-as-you-go Capital Improvement Fund 307

Five Year Capital Improvement Pay-as-you-go/Facilities Program 309

Project Fact Sheets

Comprehensive Coastal Management Plan Bond Proceeds Construction Fund (Fund 309)

CCMP FY21 Accomplishments and FY22 Action Plan 323

FY2022

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Table of Contents Town of Palm Beach

Comprehensive Coastal Management Project Fund 331

Coastal Management Program Budget 334

Worth Avenue Assessment District (Fund 311)

Worth Avenue Maintenance 335

Accelerated Capital Fund (Fund 314)

2013 Accelerated Capital Fund 337

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MARINA ENTERPRISE FUND (FUND 401)

Marina Enterprise Fund Organization Chart. 340

Marina Revenue and Expense Summary 344

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PAR 3 ENTERPRISE FUND (FUND 402)

Par 3 Enterprise Fund Organization Chart. 350

Par 3 Revenue and Expense Summary 354

Par 3 Golf Course 5-year Capital Improvement Plan 360

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BUILDING ENTERPRISE FUND (FUND 405)

Building Enterprise Fund Organization Chart 362

Building Fund Revenue and Expense Summary 365

Permit Issuance (212) 367

Inspection and Compliance (213) 370

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INTERNAL SERVICE FUNDS

Self Insurance Fund – Risk Management (Fund 501) 373

Self Insurance Fund – Health Benefit (Fund 502) 377

Equipment Replacement Fund (Fund 320) 379

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TRUST AND AGENCY FUNDS

Retirement Fund (Fund 600) 383

Retirement Fund Revenue and Expense Summary 394

Health Insurance Trust (Fund 610) 397

Health Insurance Trust Revenue and Expense Summary 399

Retiree Sliding Scale Insurance Premium Rates 2022 401

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APPENDIX

Authorized Positions 404

Donation Reserve Account Summary 413

Financial Policies

Fund Balance 415

Budgetary Control 420

FY2022

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Table of Contents Town of Palm Beach

Designation of General Fund Balance - Liability Related to Compensated Absences Leave

Balances 421

Contingency Reserve – General Fund 422

Reserve for Encumbrances, Continuing Appropriations, and Prepaid Expenses 423

Revenue Shortfall Plan 424

Debt Management Policy 426

Contingency Reserve – Capital Fund 427

Contingency Reserve – Equipment Replacement Fund 428

Equipment Replacement Reserve. 429

Contingency Reserve – Enterprise Fund 430

Repair and Replacement Reserve – Golf Course Enterprise Fund 431

Equipment Replacement Reserve – Golf Course Enterprise Fund 432

Contingency Reserve – Risk Fund 433

Reserve for Catastrophic Exposures/Emergencies – Risk Fund 434

Contingency Reserve – Health Insurance Fund 435

Funding Policy for the Town of Palm Beach Retirement System 436

Building Enterprise Fund – Unrestricted Net Position. 437

Town Marina Enterprise Fund – Maintenance and Improvement Reserve 438

Town Marina Enterprise Fund – Depreciation Replacement Reserve 439

Town Marina Enterprise Fund – Unrestricted Net Position 440

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GLOSSARY

Glossary 441

FY2022

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Town of Palm Beach Executive Summary‌

BUDGET FOR FISCAL YEAR 2021-2022


Town of Palm Beach Finance Department



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Executive Summary Town of Palm Beach

FY2022


Town of Palm Beach, Florida


October 1, 2021


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


Members of the staff and I start the budget process each year by conducting a thorough review of Town operations and available resources, while looking for improved ways to meet the needs and expectations of the community.

The final FY2022 budget is the result of the fourth year of hard work to find efficiencies and apply lean government principles on a Town-wide basis. After the new budget is adopted, members of staff continue to closely examine each expenditure before they are made, to ensure the following; is the resource still needed, can the expense be deferred, can the operational needs be met in a more efficient and/or effective manner (reorganization, technology, etc.) and, is the Town procuring and purchasing its budget allotments in the most cost effective manner.

The Town Team found efficiencies where possible and have produced a $3 million surplus in FY20, and we expect to have another large surplus for FY21. It is because of the hard work over the past few years, and the current values of real estate that we were able to present a budget that provides partial funding for the reconstruction of the North Fire-Rescue Station and tax relief for the property owners.


GENERAL FUND



FY22 BUDGET PRESENTATION

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



The American Rescue Plan (ARP) will provide the Town funding for sewer and drainage projects. The Town was recently informed that we will receive $4,415,526 from this source. The updated 5-year Capital Improvement plan moved the rehabilitation of the North Fire-Rescue Station from FY2025 – 2026 to FY22. This project is expected to cost

$5,500,000. The Town Council approved additional funding of $1,500,000 from property taxes and $4,000,000 from Town reserves or possibly bank financing, depending on rates at the time, to fund this project.

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Executive Summary Town of Palm Beach

FY2022


COASTAL MANAGEMENT

The Coastal Management Fund (309) is used to fund the construction costs of the coastal projects. The details of the FY22 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. The plan includes resiliency projects such as the Mid-Town seawall funded at $2.5 million per year for the next five years and annual funding of $1,000,000 per year for the next ten years for seawall or bulkhead repair or replacement.


ENTERPRISE FUNDS (401, 402 , 405 )



TOWN MARINA


Town Marina was closed for construction through most of FY21. The marina is expected to be operational as of November 1, 2021. Staff has prepared a 10-year financial forecast for the marina. The Town Council approved an appropriation of $2,600,000 per year of the annual marina surplus for the next 5 years from the Marina Fund to fund the deficit in the Townwide Underground Project Fund.


In addition, the Town Council adopted 3 new financial policies for the Marina. The policies include a Dock Maintenance and Improvement Reserve, Marina Depreciation Reserve, and the Unrestricted Net Position Policy.


PAR 3 GOLF COURSE


Par 3 revenues are projected to increase over end of year estimates during FY22. The various FY22 fee adjustments include strategic increases to green fees and passes which will capitalize on player demand for our unique facility. The Par 3 Golf Course anticipates an operating gross profit of $683,500 prior to depreciation and other below the line expenses. The transfer to the reserves for the Golf Course and Clubhouse and the Equipment Replacement Fund total

$263,924. Additional deductions from the operating profit include transfers for debt service ($194,813), contingency ($92,950) and the general fund ($25,000).


FY20 ended the year with a small deficit due to the closures related to the pandemic. For FY21, the Par 3 should end the year with a healthy surplus. The LTFP forecast shows improvement to the net assets of the fund. We will closely monitor this fund to ensure that there is improvement in the reserves.


BUILDING ENTERPRISE FUND


The Building Enterprise Fund was created last year to account for all building permit revenue and expenses and allow for greater transparency as required by the State of Florida. During FY21, a cost allocation study was performed to confirm the appropriate permit fee multiplier to stay consistent with Florida Statutes and to provide the basis for implementing reduced permit fees for owners and contractors that choose to use private providers on their construction projects. FY21 revenues are expected to be higher than budget and will provide for a higher surplus than anticipated. Total revenues for FY22 are conservatively estimated to be $6,904,119 and total operating expenses are $6,536,343 which includes a transfer to the General Fund of $3,200,000, which is for the allocated costs that the General Fund provides to the building permit process. Building permit related revenues have increased by $642,114 due to the recent increase in building activity. Funding for software implementation, training and annual maintenance of $319,984 has been included in the budget for new building permit software to improve customer service and efficiency. In addition, funding for additional part time no benefit personnel has been added to monitor construction sites for violations. After depreciation and capital outlay expense of $343,148 and a 5% operating expense contingency of

$166,817 there is a projected net loss of $142,189, which will decrease the reserves of this fund.

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Executive Summary Town of Palm Beach

FY2022


INTERNAL SERVICE FUNDS (501, 502 , 320)

The transfer to the Risk Fund (501) has increased by $163,048 due to expected increases in the insurance market. The Health Insurance Fund (502) transfer from all funds has decreased due to past favorable claims experience.

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


TRUST FUNDS (600 & 610)



RETIREMENT (600)

The FY22 actuarially determined contribution to the Defined Benefit plan totals $11,746,005. The contribution decreased $46,487 due to the updated mortality tables used by FRS, offset by assumption changes, including the investment return which was lowered in FY20 from 7.1% to 6.8% and has decreased to 6.6% in FY21. In FY21 the Town used $126,945 in prepaid contributions to offset the Town’s contribution. The Town has $484,000 remaining in prepaid contributions that have been approved to be used to directly lower the UAAL and not use the funds to offset Town Contributions.

The Town contribution amounts by employee group are shown below versus the FY21 contribution. Legacy plan costs represent $8,838,582 (75.25%) of the total and the costs for the ongoing plan are $2,907,423 (24.75%).


Town DB and DC Retirement Contributions



Town Retirement Contributions


FY2021


FY2022


$ Change

%

Change

General Employee DB

$3,560,240

$3,636,738

$76,498

2.15%

Lifeguards DB

215,911

195,379

($20,532)

-9.51%

Police DB

3,653,689

3,521,362

($132,327)

-3.62%

Fire-Rescue DB

4,362,652

4,392,526

$29,874

0.68%

Total DB Contribution

$11,792,492

$11,746,005

($46.487)

-0.39%

Total DC Contribution

$626,921

$638,746

$11,825

1.89%

Total Town DB and DC Contribution

$12,419,413

$12,384,751

($34,662)

-0.28%


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

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Executive Summary Town of Palm Beach

FY2022


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


General Employees and Lifeguards have a DC component to their pension plan, 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 below:

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Executive Summary Town of Palm Beach

FY2022


$638,746

$626,841

$452,504

$450,747

$472,906

7,008

6,386

2,356

5,155

5,844

$631,738

$620,455

$450,148

$445,592

$467,062

Employer Defined Contribution Funding



DC Contributions

FY2018

Actual

FY2019

Actual

FY2020

Actual

FY2021

Budget

FY2022

Budget

General


Lifeguards

Total


HEALTH INSURANCE (OPEB) TRUST (610)

The actuarially determined transfer to the OPEB trust from the General Fund in the FY22 budget is $334,215. This amount is $95,643 less than FY21. The Investment Advisory Committee recommended the investment return assumption be lowered from 6% to 5%. The funded ratio in the September 30, 2020, actuarial report was 133.9% at the 5% rate.


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.


LONG-TERM FINANCIAL PLAN

The Long-Term Financial Plan (LTFP) has been updated with the FY22 final budget. Portions of the plan are included in the budget document. The entire document can be found on the Town’s website with the final budget document.


CONCLUSION

This concludes the executive summary portion of the FY22 final budget. Please see the documents that follow this summary for detailed information about the FY21 budget.


Respectfully Submitted,


Kirk Blouin Town Manager


cc: Jay Boodheshwar, Deputy Town Manager Carolyn Stone, Assistant Town Manager Department Directors


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FY2022

STRATEGIC PLANNING AND PERFORMANCE MEASUREMENT

Strategic Planning and Performance Measurement Town of Palm Beach‌


In 2003, the Town of Palm Beach developed and adopted a strategic plan. The development of the strategic plan involved input from elected officials, citizens, the business community, and staff. In conjunction with the Town’s strategic plan, staff developed an organizational vision statement, which included input from all employees. Both the strategic plan and the vision statement, in addition to annually adopted Town-wide goals, help us to form our department and program goals. Outlined in the following pages is a summary of our strategic plan, organizational vision, and departmental goals for FY22.


STRATEGIC PLANNING

In 2001, the Town Council formed a Strategic Planning Board comprised of then Mayor Lesly Smith and four other Town residents. The board held a series of meetings and community forums to receive input from citizens, the business community, staff and others. The Town Council formally approved the strategic plan in 2003, which is summarized below.


A LEGACY WORTH KEEPING

Palm Beach is a fully developed community, world renowned for its extraordinary beauty, quality of life, and small-town character. Our permanent and seasonal residents love our barrier island community and are determined to preserve our legacy. We do not seek to change Palm Beach, but rather to protect our community’s assets, correct any deficiencies, and to manage inevitable change so as to maintain our tradition of excellence.

As we envision our future ten years from now, we see Palm Beach remaining true to the inspired legacy of our founders, a Mediterranean-style mecca of stunning architecture and natural beauty, acclaimed shopping, restaurants and hotels, a cosmopolitan culture, and an involved citizenry committed to civic and philanthropic causes and excellence in Town Government.


QUALITY AND RESPONSIVE TOWN GOVERNMENT

Town government is supported by a respected Mayor and Town Council, a skilled and dedicated staff, and by the active volunteer participation of many citizens. Palm Beach provides residents with the highest level of safety and security through its vigilance and commitment to high quality training and state-of-the- art equipment. The Town has maintained its fiscal strengths with resourceful budgeting and prudent management.

In the future, we envision...


Continued high quality services and facilities provided in a responsive, resourceful manner. A structure of government guided by clear mandates and performance goals for Town administration and for appointed boards and commissions, continued technological innovation, and excellent internal and external communication.

Pro-active initiatives and continuous vigilance to anticipate and avert threats to public safety, enabling Palm Beachers to live secure in safe neighborhoods.


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FY2022

Strategic Planning and Performance Measurement Town of Palm Beach

Solid fiscal strength and strong alliances with state and federal partners. Actions will be taken and communicated to residents to instill confidence that optimum services are provided for taxes paid.


PUBLIC FACILITIES AND INFRASTRUCTURE

While completely developed, the Town of Palm Beach recognizes a number of redevelopment challenges and functional deficiencies among its current capital facilities. Traffic has increased and parking is at a premium. Beach erosion has become severe, threatening oceanfront property and diminishing a key scenic and recreational asset. Drainage deficiencies and occasional water shortages continue to pose a threat.

In the future we envision...


Beaches fully restored and maintained for the protection of oceanfront property, enjoyment of residents, and scenic enhancement.

Modernized, reliable infrastructure systems, including improved facilities for water distribution and storm drainage. Capital projects will be completed expeditiously and with an effort to limit the disruption they inevitably will cause to adjacent property owners.

Convenient network of roads and parking, less hampered by congestion and sufficient to meet local needs without encouraging additional traffic or visitation.


CHARACTER AND QUALITY OF LIFE

While Palm Beach is built out, growth continues in the form of redevelopment and changes in use raising questions and concerns about over-development, scale and our historic legacy. The Town is proud of its lush landscaped setting, its historic architecture, and its array of shopping and other amenities, but concerns are expressed about expanded tourism, visitation and traffic, straining our limited service capacity. The Town recognizes that among our greatest resources are our people and their involvement in civic groups, charities, cultural activities, and faith-based organizations.

In the future we envision...


A community that has guarded against over-development, encouraging redevelopment consistent in scale with existing neighborhoods, reflective of our heritage.

A town with a rich menu of cultural choices, enabling Palm Beach to continue to combine the intimacy and convenience of small town life with the cultural sophistication and variety of a city.

Palm Beach will remain a friendly community which embraces its diversifying population, nurtures young families and children, and welcomes new residents and visitors. Palm Beachers will continue their heritage of support to worthy causes and their involvement in civic affairs creating new opportunities for all to participate fully in the life of the community.


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FY2022

TOWN STAFF VISION

Strategic Planning and Performance Measurement Town of Palm Beach


In 2005, Town staff developed and implemented an organizational vision and values statement. A Visioning Committee of 20 employees representing each department and every level of authority developed the draft vision and values statement that was reviewed by all Town employees. The final vision and values statement is shown below:


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OUR VISION

The Town of Palm Beach delivers the highest quality service by continuously improving and always striving to be the standard by which others are measured.

Our Town Rich in history… Rich in service…

Always exceptional!


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OUR VALUES

The employees of the Town of Palm Beach commit to and are guided by the following values: Respect for everyone

Highest ethical standards Cooperation and teamwork Commitment to quality Spirit of innovation

Open, timely communication Personal responsibility and accountability

This is a commitment by the employees of the Town of Palm Beach. Our success as a team is dependent upon our actions being consistent with the vision & values we profess.


THE VISION/STRATEGIC PLAN/PERFORMANCE MEASUREMENT PROCESS

The Town-wide vision and strategic plan developed by the Strategic Planning Board and the organizational vision developed by Town staff complement each other. The Staff recognizes the Town’s rich history and commitment to excellence that has made the Town an exceptional place to live and work.

The strategic plan and organizational vision guide the decision making process as the elected officials and staff develop annual Town-wide, department and program goals, and the annual budget. We then use performance measures to track our progress in achieving the goals that have been set.

The process is depicted in a flowchart below and elements of the process are described in greater detail in this section. The department and program performance measurement methodology are described in greater detail in the department sections of this document.


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Strategic Planning and Performance Measurement Town of Palm Beach

FY2022


THE VISION/STRATEGIC PLAN/GOALS AND PERFORMANCE MEASUREMENT PROCESS



Vision



Strategic Plan


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FY2022

TOWN-WIDE BUDGET PRIORITIES FOR FY2022

Strategic Planning and Performance Measurement Town of Palm Beach


The Town Council’s annual budget priorities for FY2022 are outlined below.


In addition to the Town Council priorities, the Departments developed other major initiatives for the year. The Departmental goals will be reviewed on a continual basis throughout the fiscal year.

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Goal #1: Develop financial policies and plans to address future needs of the Town. This will include, but not limited to, policy for Marina reserves (should include minimum reserve balances int he Marina Fund, and potential uses for any excess balances), long-term plan to finance the Capital Improvement Program, including the rebuild/new construction of the North Fire Station, finance plan to address the projected budget shortfalls in the Underground Utility Construction Project.


Finance: Develop financial policies and plans to address future needs of the Town

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Goal #2: Complete and review water feasibility study. Evaluate water supply and distribution options, with an emphasis on quality and cost. Develop a plan for implementation and begin negotiations for a contract with a vendor.

Public Works: Complete water feasibility study containng data collection and review, water supply options, water distribution options and evaluation report. The Final report should have alternatives iwth total order to magnitude of cost shown and other non-quantitative factors such as constructability, regulatory, sustainability and risk.

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Goal #3: Conduct a complete review of the Town Code or identify and devise a plan to address the most pressing Town Code reform needs.

Planning, Zoning and Building: Develop a budget and process to includeanalysis of the existing code, create a steering committee, host a public engagement session to solicit community feedback, research impacts of federal, state and county regulations and prepare recommended code changes.

Planning, Zoning and Building: Work with the Town Council, residents and the Planning and Zoning Commission to address quality of life issues and other zoning matters that are requested by Town Council.

The following is a breakdown of the Town Council Priorities and a listing of the departmental objectives that address the Council’s agenda. The table below shows the linkage between the Council’s priority and the Department objectives that will be implemented during the year or have already been implemented. A detailed listing of all departmental objectives and performance measurements can be found in the Department sections of this document.









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Strategic Planning and Performance Measurement Town of Palm Beach

FY2022

Goal #4: Continue Planning, Zoning and Building process improvement iniative to further improve operational efficiency, customer services and policies/procedures.

Planning, Zoning and Building: Identify and implement a software program designed for use by Planning, Zoning and Building to meet these goals.

Planning, Zoning and Building: Reduce the number of permits and forms used throughout the permit process.

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Goal #5: Complete and publicly review the second phase of the Woods Hole Group resiliiency study. The first phase included dynamic modeling and anticipated storm events and the effects of sea level rise on the Town. The second phase will identify methods to mitigate these impacts and will prioritize solutions. After analysis, develop a multi-year implementation plan with input from the Mayor and Town Council to mitigate the potential impacts to the Town, which will impact both public and private property.


Public Works: Develop a multi-year implementation plan with input from the Mayor and Town Council to mitigate the potential impacts ot the Town, which will impact both public and private property.

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Goal #6: Complete the Town Marina project on time and on budget. Create and implement a detailed and strategic marketing plan for the Town Marina. Provide regular updates to the Mayor and Town Council and receive input on key decisions related totdesign elements, budget and operations.

Public Works: Work with the Town's Purchasing Manager to ensure the Town Marina is contructed on time and on budget.

Town Marina: Remain on budget and on schedule for a Fall 2021 renovation completion.


Town Marina: Maximize revenue with updated marketing plan focused on new clients

DEPARTMENT PERFORMANCE MEASURES

The Town departments have adopted goals and performance measures representing the most critical targets for their operations. The other department and program specific results are shown in the department section of the budget document.


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FY2022

LOCATION

Location‌

Town of Palm Beach


Palm Beach is located on a barrier island east of West Palm Beach, Florida in Palm Beach County. The land area of the Town is approximately 3.77 square miles with 12.1 miles of coastline on the Atlantic Ocean. The Town is also bound on the west by 15.9 miles of Intracoastal frontage (Lake Worth), on the north by the Palm Beach Inlet, and on the south by the Town of South Palm Beach.


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FY2022

TOWN OVERVIEW/DEMOGRAPHICS

Town Overview/Demographics Town of Palm Beach‌



Palm Beach at a Glance

Date of Incorporation

April 17, 1911

Form of Government

Council/Manager

Land Area

3.77 Square Miles

FY2021 General Fund Budget

$80.9 million

Taxable Property Valuation

$19.9 Billion


Town of Palm Beach Demographics


Population


Service Statistics

2019 (Univ of Florida Est)

8,321


Police Stations

1

2018 (Univ of Florida Est)

8,295


Fire-Rescue Stations

3

2017 (Univ of Florida Est)

8,291


Public Elementary School

1

2016 (Univ of Florida Est)

8,040


Public Library

1

2015 (Univ of Florida Est)

8,040


Recreation Facilities


2010 (Census)

8,161


Tennis Courts

14

2000

9,676


Par 3 Golf Course

1

1990

9,814


Marina (88 slips)

1

1980

9,432


Community Building

1

1980

9,086


Playfields

5

1960

6,055


Bicycle Paths

9.3 miles

1950

3,886


Picnic Tables

77




Outdoors Grills

28

Resident Statistics


Recreation Areas


Median Age

68.5 yrs.


Phipps Ocean Park

24 acres

Avg. Household Size

1.81


Special Use Parks


Median Home Value

$1,149,500


Public Park on Beach

3.0 acres




Municipal Beach

5.60 acres

Population by Age


Peruvian/So. County Rd

0.24 acres

Under 5 years

1.0%


Southern Blvd Causeway

9.60 acres

Under 18 years

6.1%


Nature Islands

39 acres

65 years and over

62.0%






Registered Voters

8,371

Racial Composition




Caucasian & Other Races

95.3%


Bond Ratings


Hispanic/Latino

4.1%



2013/2016

Revenue Bonds

Issuer’s Rating

African American

0.8%


Moody’s

Aa1

Aaa

Asian

1.7%


S&P

AAA

AAA


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FY2022

TOWN HISTORY

Town History‌

Town of Palm Beach



According to early settler accounts, Palm Beach received its name from a shipwreck named the “Providencia”. The ship washed ashore in January of 1878 with a load of coconuts bound from Havana to Barcelona. Early settlers lost no time claiming salvage and planting the coconuts, which were not native to South Florida in an effort to launch tropical South Florida on a commercial coconut industry.

In 1893 millionaire industrialist, Henry M. Flagler and his second wife honeymooned in St. Augustine. Impressed with the beauty and history of the area, he envisioned an “American Riviera”. Flagler left home at age 14 with an eighth-grade education. Later, with John D. Rockefeller and Samuel Adams, he founded Standard Oil, and the rest is history. Having invested large sums in several hotels in the St.

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Augustine area, Flagler extended his holdings southward. He bought and improved existing railways anticipating the tremendous potential

for South Florida. His railway was named the Florida East Coast Railway.

Flagler’s agents soon were buying acres of land on the island of Palm Beach. Many early homesteaders found themselves very wealthy, as orders had been given to buy “at any price”. Ground was broken May 1, 1893, and on February 11, 1894, the Royal Poinciana Hotel, the largest wood structure in the world, opened in Palm Beach and welcomed 17 guests. A month after the opening, the first train pulled from the station on Loftin Street (later used as an office and warehouse by the Town of Palm Beach) in West Palm Beach on the newly built bridge across Lake Worth to deliver vacationing residents, some in their own private railway cars, to the new hotel. Henry Flagler built his own house in 1902, Whitehall, as a wedding present for his third wife, Mary Lily Kenan. Whitehall is now the Henry Morrison Flagler Museum and is open to the public.

Flagler continued to develop the Royal Poinciana Hotel property and built a second hotel, the Palm Beach Inn, on the beachfront portion of the Royal Poinciana’s property. When the Palm Beach Inn burned in 1903 the first Breakers Hotel was built. Destroyed by a fire in 1925, it was rebuilt as the splendid hotel it is today. The Breakers is listed in the National Register of Historic Places.


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Town History

Town of Palm Beach

On April 17, 1911, a meeting of the registered and qualified voters of Palm Beach, Florida, was held at the Palm Beach Hotel for the purpose of incorporating the Town of Palm Beach. Thirty-four qualified voters voted to incorporate the Town.

In 1918, before the end of World War I, Addison Mizner, an established New York architect who was born in California and studied in Spain, accepted an invitation from Paris Singer to recuperate from a leg injury in Palm Beach. As Mizner’s health improved his boredom turned into creativity, and he transformed Singer’s bungalow into a Chinese villa. The conversion was a success, but Singer looked forward to a larger project. Having established two hospitals in France, Paris Singer decided to build a convalescent home in Palm Beach for service men returning from the war. The buildings were completed, but before the opening of the clubhouse in January 1919, the “Touchstone Convalescent Club” had been transformed into the exclusive Everglades Club on Worth Avenue where it still is today. Mizner’s era had begun and was to continue along the southeast Florida coast through the 1920's.

The Town of Palm Beach soon began long range plans to develop and protect this island paradise, and the beauty which Town residents now enjoy is due to the efforts of several generations of planning activity. In 1929, the Garden Club of Palm Beach joined the Town and formally sponsored the preparation of a Town Plan. The overall goal of the 1929 Plan stated the following:

“One attractive and well managed public bath and beach, the concentration of general traffic upon a limited number of streets, beautification without especial reference to main arteries of travel, and a system of leisurely and convenient byways free from automobiles, punctuated with gardens: this is a plan which will localize recreation seeking crowds, discourage trespassing, and provide safety and quiet for residents of Palm Beach.”

Also included in the plan was the following statement:


“There are many communities which can be said to be beautiful. The places in which charm is the additional attribute are very few. The element of charm is the thing, which lifts a community out of the ordinary and makes it distinctive. The attribute of charm may be produced by an intelligent development of physical advantages in an unusual way.”

Today’s Comprehensive Plan in Palm Beach builds on the early foundation as an effort to preserve the quality and beauty of Palm Beach.

The Town of Palm Beach has 8,371 registered voters in 2020 with approximately 8,321 full time residents. The population swells to approximately 25,000 during “season” which is from November to April. Residents and visitors enjoy the very best in dining, shopping, and luxurious surroundings. Worth Avenue shops attract visitors worldwide.

In 2011, the Town celebrated its Centennial with a season full of activities and events. A Centennial Commission was formed to engage with the community, residents and businesses alike, to identify ways to celebrate the 100th anniversary of the Town's incorporation on April 17, 2011.

FY2022


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FY2022

TAXABLE VALUE AND MILLAGE RATE

Taxable Value and Millage Rate Town of Palm Beach‌



The Town Council approved a millage rate of 2.8966 for FY22, a decrease from the FY21 millage rate of 2.9962. Taxable value increased 8.13% to $21,681,912,582 for FY22. Ad Valorem revenue of

$59,663,700 is included in the FY22 budget. Town adopted final millage rate is above rollback but below maximum millage rates. The increase in tax revenue if the rollback rate was adopted would have been

$817,958. The chart below identifies the millage rate options available to the Town and the Town’s adopted final millage rate.



Millage Rate

Tax Revenue

Rollback Millage Rate

2.8135

$57,951,958

Majority Vote Maximum Millage Rate

2.9906

$61,599,831

2/3 Vote Maximum Millage Rate

3.2897

$67,760,638

FY21 Millage Rate

2.9962

$61,715,179

Town Adopted Final Millage Rate

2.8966

$59,663,700


The majority maximum millage rate is the prior year rolled-back rate adjusted to the rolled back rate if the prior year majority vote rate had been levied. This newly calculated rolled-back rate is then adjusted by the percentage change in per capita Florida personal income to arrive at the current year majority vote rate. This year the percentage change in Florida personal income was 1.0443%. The 2/3 vote maximum rate is 110% of the majority maximum rate.

The Town’s taxable value since 2013 has increased 81.6% to all-time highs as shown in the chart below. In 2021 the taxable value increased by 8.13%. New construction for the year totaled $267,431.281 with 41 Certificates of Occupancy issued, both were historic highs.

The increase in the FY15 millage rate was to supplement the budget for funding of the coastal protection program. Since that time, the millage rate had declined due to increasing values. The tax revenue trend is shown on the chart on the following page.


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Taxable Value and Millage Rate

Town of Palm Beach

FY2022

The Town millage rate represents 17.85% of the total tax bill. The table below illustrates the difference between the FY21 vs. FY22 total tax bill by taxing district for a Palm Beach property owner with a taxable value of $1 million.


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FY21 FY22 FY22 Tax Per Change Per % of Total Taxing Authority Millage Rate Millage Rate $1 Million Value $1 million Value % Change Tax Bill


Palm Beach County School District


7.0100


6.8750


$6,875


-$135.00


-1.93%


42.37%

Palm Beach County

4.8124

4.8149

$4,815

$2.50

0.05%

29.68%

Palm Beach

2.9962

2.8966

$2,897

-$99.60

-3.32%

17.85%

Health Care District

0.7261

0.7261

$726

$0.00

0.00%

4.48%

Children Services

0.6497

0.6233

$623

-$26.40

-4.06%

3.84%

South Florida Water Mgmt

0.2295

0.2207

$221

-$8.80

-3.83%

1.36%

Everglades Construction

0.0380

0.0365

$37

-$1.50

-3.95%

0.22%

Florida Inland Navigation

0.0320

0.0320

$32

$0.00

0.00%

0.20%

Grand Total

16.4939

16.2251

$16,225

-$268.80

-1.63%

100.00%







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Taxable Value and Millage Rate Town of Palm Beach

Impact on owner of $1 million property

FY2022

The chart below shows the 10-year trend in millage rates for all taxing authorities.


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The Town’s total millage rate is the lowest municipal rate in Palm Beach County as shown below.


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FY2022

PROPERTY BREAKDOWN BY NUMBER OF PARCELS

Taxable Value and Millage Rate Town of Palm Beach



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The Town has a total of 9,416 total parcels. Residential units total 8,866 or 94% of all parcels. Condominiums and Cooperatives represent the greatest percentage of total parcels in the Town at 67.6% or 6,365 parcels. Single family residential parcels are the second largest group at 2,296 parcels or 24.4% of the total. Commercial and industrial parcels total 403 and the balance is made up of multi-family, government, institutional and miscellaneous parcels. There are 3,418 Properties with a Homestead exemption representing 36.3% of the total parcels in the Town.


PROPERTY BREAKDOWN BY TAXABLE VALUE

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The taxable value of parcels in the Town total

$21.5 billion. Residential parcels represent 91.6% of the total value of parcels at

$19,749,966,139 and single family residential represents 64.4% of the total value. Commercial and industrial properties represent 7.8% or $1,680,474,445 of the total value of parcels.


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Taxable Value and Millage Rate Town of Palm Beach

FY2022

HISTORICAL BUILDING PERMIT DETAIL

During FY20, the Town revised the permit process and consolidated many building permits for one project into a master permit. The permit application numbers declined because of the new “one permit” process. Total construction valuation for FY21 was $398,172,523 compared to $283,152,993 in FY20 and exceeding all prior year’s totals. We have estimated higher than average permit revenues for FY21 because activity is still strong.

The monthly trend for permit activity and permit valuation for the past five years is shown on the charts below.


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FY2022

FINANCIAL POLICIES

Financial Policies Town of Palm Beach‌


The Town of Palm Beach financial policies, compiled below, set forth the basic framework for the overall financial management of the Town. These policies assist the Town Council’s decision-making process and provide guidelines for evaluating both current activities and proposals for future programs. Copies of Town Council adopted policies are located in the appendix section of this document.


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GENERAL POLICIES


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REVENUE MANAGEMENT POLICIES


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FY2022

BUDGET PREPARATION PROCESS

Budget Preparation Process Town of Palm Beach‌



The accounting policies and reporting practices of the Town conform to generally accepted accounting principles as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of significant policies and practices.


FINANCIAL REPORTING ENTITY

For financial reporting purposes, management has defined the reporting entity in accordance with criteria set forth in generally accepted accounting principles. The basic criterion for including a potential component unit within the reporting entity is the governing body's ability to exercise oversight responsibility. The most significant manifestation of this ability is financial interdependency. Other manifestations of the ability to exercise oversight responsibility include, but are not limited to, the selection of governing authority, the designation of management, the ability to significantly influence operations, and accountability for fiscal matters. A second criterion used in evaluating potential component units is the scope of public service. Application of this criterion involves considering whether the activity benefits the government and/or its citizens, or whether the activity is conducted within the geographic boundaries of the government and is generally available to its citizens. A third criterion used to evaluate potential component units for inclusion or exclusion from the reporting entity is the existence of special financing relationships, regardless of whether the government is able to exercise oversight responsibilities. Based upon the application of these criteria, the following is a brief review of each potential component unit addressed in defining the Town's reporting entity.


Included within the reporting entity:

The Town of Palm Beach Employees' Retirement System

The Town and the Systems’ participants are obligated to fund the costs based upon actuarial valuations. The Employee’s Retirement Board recommends and the Town Council is authorized to establish benefit levels and to approve the actuarial assumptions used in the determination of contribution levels.


Excluded from the reporting entity:

East Central Regional Wastewater Treatment Facility ("Facility")

The Town participates in an interlocal agreement with Palm Beach County and the Cities of West Palm Beach, Riviera Beach and Lake Worth to provide wastewater treatment. The facility is governed by a Board of Directors comprised of one member from each participating entity. The Board of Directors has the authority to accept and disburse funds, approve an annual budget, transact business, enter into contracts and decide all other matters related to the Facility. The Town reimburses the Facility based upon usage and also provides funds for renewal and replacement costs. The Town does not exercise significant oversight responsibility nor can the Town significantly influence the Facility's operations and, therefore, the Facility has not been included as part of the reporting entity.


Budget Preparation Process Town of Palm Beach

BASIS OF ACCOUNTING

Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied.


All Governmental Funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized in the period in which they become susceptible to accrual that is when they become measurable and available to pay liabilities of the current period.


Property taxes, utility and franchise taxes, intergovernmental revenues and charges for services are susceptible to accrual when collected in the current year or within sixty days subsequent to September 30th, provided that amounts received pertained to billings through the fiscal year just ended. Further, property taxes are recognized as revenue in the fiscal year for which they are levied. Investment earnings are recorded as earned since they are measurable and available. Permits, fines, forfeitures and contributions are not susceptible to accrual because, generally, they are not measurable until received in cash. Revenues collected in advance of the year to which they apply are recorded as deferred revenues.


Expenditures under the modified accrual basis of accounting are generally recognized when the related fund liability is incurred and expected to be liquidated with available resources. Exceptions to this general rule include principal and interest on general long-term debt which are recognized when due.


All Proprietary Fund types and the Pension and Nonexpendable Trust Funds are accounted for using the accrual basis of accounting. Revenue is recognized when earned, and expenses are recognized when they are incurred.


The Agency Funds are custodial in nature and do not involve measurement of results of operations. They are accounted for under the modified accrual basis of accounting. Assets and liabilities are recognized on the modified accrual basis.

FY2022


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BUDGET BASIS

The budgets of general government type funds are prepared on a modified accrual basis. Briefly, this means that obligations of the Town are budgeted as expenses, but revenues are recognized only when they are actually received. Unencumbered appropriations lapse at fiscal yearend.


The enterprise funds, on the other hand, are budgeted on a full accrual basis. Not only are expenditures recognized when a commitment is made, but revenues are also recognized when they are obligated to the town.


The Comprehensive Annual Financial Report (CAFR) shows the status of the Town’s finances on the basis of “generally accepted accounting principles” (GAAP) and fund expenditures/revenues on both a GAAP basis and budget basis for comparison purposes.


Budget Preparation Process Town of Palm Beach

BUDGETS AND BUDGETARY REQUIREMENTS

The Town follows these procedures in establishing the budgetary data reflected in the financial statements:



NON-EXPENDABLE AND EXPENDABLE TRUST FUNDS

These consist of resources received from non-Town sources and held by the Town as trustee to be expended or invested in accordance with the conditions of the trust. In a non-expendable trust, the government typically is only permitted to spend the investment earnings and not the assets. The Town does not have non-expendable and expendable trust funds at the present time.


AGENCY FUNDS

Trust funds typically involve some degree of financial management. Agency funds are used when the government plays a more limited role by just collecting funds on behalf of a third party. The Town does not have an Agency Fund at the present time.


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FY2022

GENERAL FUND LONG TERM FINANCIAL PLAN FORECAST

Forecast Summary Town of Palm Beach‌


Financial forecasts are the foundation of a long term financial plan. These forecasts provide the Mayor, Town Council and staff with information they need to more effectively determine future levels of service and methods of funding. We prepared this forecast of General Fund revenues and expenditures to include the FY22 proposed budget and an 8-year forecast through FY30. The complete 2021 long-term financial plan can be found on the Budget Section of the Town’s website.

ASSUMPTIONS

The forecast for the first 2 - 4 years is based upon recent trends and specific expectations. The forecast for the remaining years is less tactical and more mathematical, and is based primarily upon estimates by actuaries and long-term inflation expectations.


The major assumptions that were used to prepare the forecast are as follows:



FY23

FY24

FY25

FY26

FY27

FY28

FY29

FY30

Ad Valorem Tax

Increase

3.46%

3.75%

4.23%

3.66%

2.59%

1.36%

2.43%

2.61%

General Inflation

2.50%

2.50%

2.50%

2.50%

2.50%

2.50%

2.50%

2.50%

Salaries & Wages

2.82%

4.28%

4.34%

4.28%

4.37%

4.36%

4.29%

4.30%

Health Insurance

6.00%

5.75%

5.60%

5.44%

5.29%

5.13%

4.98%

4.83%

Pension (ADEC)

4.17%

5.6%

5.29%

4.12%

-0.97%

-7.03%

-3.82%

-4.06%

Other Employee

Benefits

1.83%

2.85%

1.85%

2.86%

3.42%

3.70%

3.65%

3.43%

Property Insurance

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

Liability Insurance

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

W/C Insurance

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%


Revenue forecasts are based upon historical trends and recent activity. The forecast was prepared using property tax to balance the budget. The percentage increases for ad valorem taxes are shown in the table above. This will not be the ultimate result in future years. The forecast for all revenue categories are described in greater detail later in this section.


The assumption for inflation for FY23 and the next eight years is 2.5%, which is based upon the forecast in the June 2021, Livingston Survey issued by the Federal Reserve Bank of Philadelphia. The salary and wage assumption is based upon the most recent compensation and benefits study in FY20 and average annual increases for all employee groups and forecasted retirements from FY23 through FY30. The health insurance forecast assumption is based upon input from our health consultant’s actuary. The pension forecast assumptions were updated by the Town’s pension actuary to include the results of the compensation study results. The other employee benefit assumptions have been calculated based upon anticipated retirements and other inflation factors and does not include health insurance. Property, Liability and Workmen’s Compensation insurance assumptions are based upon information received from our brokers regarding potential increases.


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FY2022

2021 FORECAST

Forecast Summary Town of Palm Beach


The forecast charts shown on the following pages include actual results for 2017-2020 shown in dark blue, the FY21 budget, shown in medium blue and the proposed FY22 budget shown in violet, and then forecasts through FY30 shown in light blue. The forecast maintains service levels and funds the additional contribution of $5,420,000 for the retirement program.


GENERAL FUND REVENUE FORECAST

The forecast for revenues is conservative and should allow for minor fluctuations in various revenue sources. The forecast details for each major revenue category are included in this analysis. The forecast chart below contains the property tax increases based on the assumptions shown on the table at the beginning of the document.


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PROPERTY TAX REVENUE

As mentioned earlier, we used ad valorem property taxes as the plug to balance the budget for the forecast years of FY23 through FY30. Over the past 5 years, taxable value has increased by 32.1% an average of 6.42% per year. The taxable value increase for FY22 was 8.13%. Over the past five years through FY21, the Town portion of the property tax bill for a $1,000,000 homesteaded property has decreased by

$117. In FY20, the school district millage increased based on a voter approved tax increase, which caused the overall tax bill for a $1 million homestead property owner to increase by $1,123 in FY20. Prior to FY20, the total bill had decreased $1,131 since 2016. Through FY21, the total tax bill has increased by

$147 since 2016.


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Forecast Summary

Town of Palm Beach

FY2022

NON AD VALOREM TAXES

Non ad valorem taxes include local option gas taxes, franchise fees and utility service taxes. The forecast has increased because recent revenue collections have improved. The forecast and trend chart is shown below:


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LICENSE AND PERMIT REVENUE

License and permit revenue includes business licenses, building permit revenues and parking permits.


The chart on the following page shows record years for these revenues sources in FY16, FY18 and FY19. In FY20, revenues were lower due to the COVID-19 shutdown. For FY21 through 30, the building permit related revenues have been transferred to the Building Enterprise Fund. The forecast is for the remaining non-building permit revenues.



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Forecast Summary

Town of Palm Beach

FY2022

INTERGOVERNMENTAL REVENUE

Intergovernmental revenue includes revenue received from Federal, State, County and local government sources. Revenues from the State of Florida include State revenue sharing, local government sales tax and alcoholic beverage licenses. Local revenues include County occupational license revenue, and the 911 reimbursement from Palm Beach County. Federal and State grants are also included in this category.


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The forecast for intergovernmental revenues has increased for FY22 based on revenues received from the State of Florida for sales tax and revenue sharing returning to more normalized levels. FY18 contained grant funds from FEMA and the Federal Government. The updated forecast for all other revenues anticipates a small inflationary increase per year.



CHARGES FOR SERVICES

Charges for services include public safety fees, solid waste fees, parking meter collections and other small fees such as copy charges and lien searches. The updated forecast reflects the increase in special assignment overtime for two new large contracts. This revenue source offsets increased expenditures in the salary and wage budget in the police department. If the contracts were not renewed and the revenue was lost, the expenditures would also decline by approximately the same amount. This category also includes the revenue


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Forecast Summary Town of Palm Beach

for the Recreation Center that opened in FY20. The forecast for these revenue sources reflect small inflationary increases.

FY2022


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FINES AND FORFEITURES

Fine and Forfeiture revenue includes traffic violation fines and penalties, parking fines and penalties and code enforcement violation fines.


Revenues from these sources have been variable. Recent efforts to add contractual parking enforcement officers have increased revenues.


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INVESTMENT INCOME

Investment returns had started to increase due to rising interest rates until the Federal Reserve cut interest rates in response to the COVID-19 recession, so we have lowered our FY21 and FY22 budgets and maintain the low rates through FY23. The future forecast begins to increase the rates to prior levels near the end of the forecast period. The Investment Advisory Committee and our investment consultants are monitoring the situation closely and will adjust the duration of the portfolios as required.



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Forecast Summary

Town of Palm Beach

FY2022

MISCELLANEOUS AND TRANSFERS

Miscellaneous revenue includes rents and royalties, the sale of fixed assets and other revenue.


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FY2022

TOTAL GENERAL FUND EXPENDITURES

Forecast Summary Town of Palm Beach


The 2021 forecast contains the FY22 proposed budget and includes the annual additional funding of

$5,420,000 for the pension fund, and an increase in CIP funding due to the reconstruction of the North Fire- Rescue Station. In addition, the forecast reflects the expenditure increase assumptions outlined earlier in this section. The charts in this section include four years of actual data from 2017-2020 in dark blue, the FY21 budget in medium blue, the proposed FY22 budget in violet and the forecast through FY30 in light blue. The forecast reflects the transfer of the Building Permit related expenses to the new Building Enterprise Fund beginning in FY21.


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SALARY AND WAGES

The forecasted salary and wage increases are based upon the employee pay policies and replacements of retirees at lower salaries through the forecast period. The salary and wage assumption is based upon the compensation study results and the change to the merit system and new step program including COLA on October 1st of each year. In recent years expenditures have come in well below budget due to vacancies from retirements and turnover. We expect the FY21 actual costs to be below the budget amount. For FY22, a COLA increase of 3.2% is included in the budget. The chart on the following page shows the forecast and past trends.


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Forecast Summary

Town of Palm Beach

FY2022

Vacancies have kept these costs stable in recent years. The average increase throughout the forecast period is 4.15% for total salary and wages.



PENSION BENEFITS

The pension estimate is based upon the actuary’s forecast of the annual required contribution and estimates for the General Employee DC contributions. The forecast for annual contributions include the compensation study results and the benefit changes for police officers and firefighters made in FY19. The extraordinary contribution of $5,420,000 is included in each year of the forecast.


The forecast reflects the Town’s Retirement Board recommended a change in the investment assumption from 7.0% to 6.0% over a 5-year period, the change in the payroll growth assumption, the increase in the wage growth assumption and the new mortality tables. The actuary forecasts the costs will begin to decline over the end of the 8-year period if all assumptions are met. The FY19 extraordinary contribution includes additional funds paid into the system for the new amortization and the prepayment of the UAAL for the effects of the compensation study. If the assumptions are met and the extraordinary contribution is continued through FY30, the funded ratio of the plan is estimated to be 92.7%.


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Forecast Summary

Town of Palm Beach

FY2022

OTHER EMPLOYEE BENEFITS

Other Employee Benefits category includes all other benefits including health insurance. Health insurance costs have remained flat for seven years. The health insurance forecast reflects the forecast prepared by the plan’s actuary. Health increases range from 6% in FY23 and decrease to 4.83% in FY30. It is our expectation that the forecast for health increases is higher than what we will experience based on our past experience in managing the plan. Other employee benefits (including FICA, longevity, incentives, and allowances) are expected to increase at a much lower rate.


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Forecast Summary Town of Palm Beach

CONTRACTUAL

The contractual costs have increased due to increases in software maintenance agreements, sanitary sewer treatment costs, landscape maintenance and the addition of Recreation Department expenses. In recent years contractual costs have increased due to contracting out parking enforcement, lifeguards, and some recreation positions. Contractual expenditures are forecasted to increase by the rate of inflation.


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COMMODITIES

The commodity forecast is based upon the assumed rate of inflation. Commodity budgets include fuel, supplies, dues, software, some computer hardware and vehicle maintenance and uniforms. The reduction in expenses in recent years represent an overall town effort to reduce expenses wherever possible.

FY2022


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Forecast Summary Town of Palm Beach

EQUIPMENT REPLACEMENT/CAPITAL OUTLAY

This category includes depreciation on Town vehicles and equipment that is charged to the departments and transferred to the Equipment Replacement Fund. It also includes purchases of new equipment that is not replacement equipment. There were large capital purchases in FY17 in the Police and Fire-Rescue Departments that caused the spike in that year.


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TRANSFERS

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The Transfers category includes transfers to the Capital Improvement Program, Coastal Protection Fund, Debt Service Fund, Risk Insurance Fund and Retiree Health Insurance Trust. It also includes the annual contingency allocation.