TOWN OF PALM BEACH, FLORIDA

COMPREHENSIVE ANNUAL BUDGET FISCAL YEAR 2023

(OCTOBER 1, 2022 – SEPTEMBER 30, 2023)

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

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

www.townofpalmbeach.com

TOWN OF PALM B

ORGANIZATIONAL ST

CITIZENS OF PALM BE

EACH

RUCTURE

ACH

ELECT‌

MAYOR

Danielle H. Moore

Lew Crampton

Ted Cooney

Julie Araskog

PRESIDENT PRO‐TEM

Bobbi Lindsay

PRESIDENT

Margaret A. Zeidman

TOWN COUNCIL

DIRECTOR OF FINANCE

Jane Le Clainche

POLICE CHIEF

Nicholas Caristo

DIRECTOR OF PLANNING, ZONING AND BUILDING

Wayne Bergman

DEPUTY TOWN MANAGER ‐ FINANCE & ADMINISTRATION

Bob Miracle

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

DEPUTY TOWN MANAGER – BUSINESS ENTERPRISE & CULTURE

Carolyn Stone

APPOINTS

2

FY2023

S

Guide for Readers Town of Palm Beach‌

GUIDE FOR READER

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. 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.

A STEP BY STEP GUIDE

FY2023

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:

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.

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.

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.

APPENDIX

The appendix includes 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.

GOVERNMENT FINANCE OFFICERS ASSOCIATION‌

Distinguished Budget Presentation Award

PRESENTED TO

Town of Palm Beach

Florida

For the Fiscal Year Beginning

October 01, 2021

Executive Director

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Table of Contents‌

Town of Palm Beach

*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.

FY2023

TABLE OF CONTENTS

INTRODUCTION

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 33

Introductory Information

Map 41

Town Overview/Demographics 42

Town History 43

Taxable Value and Millage Rate 45

Financial Policies 50

Budget Preparation Process. 55

Budget Calendar. 59

Financial Structure 60

Long‐Term Financial Plan Forecast 65

BUDGET SUMMARY

Fund Budget Overview 77

Budget Summary by Fund Type, Revenues and Expenditures 79

Summary of Major Revenues by Fund Type 81

Summary of Expenditure Classifications by Fund Type 84

Reserve Analysis 87

Capital Expenditures 97

GENERAL FUND

General Fund Revenues and Expenditures Budget Comparison 99

REVENUES

General Fund Revenues 100

Major Revenue Sources 105

EXPENDITURES

General Fund Expenditures 114

LEGISLATIVE

Legislative (111) 120

GENERAL GOVERNMENT

General Government (113) 122

TOWN MANAGER

Administrative Management (121) 124

TOWN CLERK

Town Clerk (131) 128

Table of Contents

Town of Palm Beach

ADVICE AND LITIGATION

Advice and Litigation (122) 132

FY2023

INFORMATION TECHNOLOGY

Information Technology Organizational Chart 134

Information Technology (125) 134

PEOPLE & CULTURE

People & Culture Organizational Chart 140

People & Culture (123) 144

FINANCE

Finance Organizational Chart 152

Finance Department Revenue and Expenditure Summary 155

Financial Management (141) 157

Procurement and Contracts Management (144) 160

PLANNING AND ZONING

Planning and Zoning Organizational Chart 166

Planning and Zoning Department Revenue and Expenditure Summary 169

Planning and Zoning (211) 171

Landmarks Preservation (214) 174

Fire Prevention (215) 176

Code Enforcement (216) 178

RECREATION

Recreation Organizational Chart 182

Recreation Department Revenue and Expenditure Summary 184

Recreation Administration (311) 186

Tennis (312) 188

Recreation Center (313) 191

FIRE RESCUE

Fire‐Rescue Department Organizational Chart 196

Fire‐Rescue Department Revenue and Expenditure Summary 199

Fire Administration (411) 201

Operations (417) 203

Training (418) 206

Ocean Rescue (419) 209

POLICE

Police Department Organizational Chart 212

Police Department Revenue and Expenditure Summary 216

Administrative Management (421) 218

Organized Crime Vice and Narcotics – OCVAN (422) 221

Records Information System Unit (423) 224

Training and Community Relations Unit – TCR (424) 226

Communications Unit (425) 229

Crime Scene/Evidence Unit (426) 231

Patrol (428) 233

Table of Contents

Town of Palm Beach

Criminal Investigation Unit (429) 237

Parking Control Unit (430) 240

PUBLIC WORKS

Public Works Department Organizational Chart 244

Public Works Department Revenue and Expenditure Summary 248

Administrative Management (511) 250

Street Repair and Maintenance (521) 252

Traffic Control (523) 254

Street Lighting (524). 256

Storm Sewer Maintenance (531) 258

Sanitary Sewer Maintenance (532) 261

Sanitary Sewage Treatment (533) 264

Residential Collection (541) 265

Commercial Collection (542) 267

Refuse Disposal (543) 269

Yard Trash Collection (544) 270

Recycling (545) 272

Parks (551) 274

Facility Maintenance (554) 276

General Engineering Services (561) 278

Right of Way Inspections (565) 281

Equipment Operation and Maintenance (571) 283

OTHER

Library Services (321) 286

Transfers to Other Funds (611 to 625) 287

Contingent Appropriations (711) 288

SPECIAL REVENUE FUND

Town‐wide Underground Utilities Fund (Fund 122) 290

DEBT SERVICE FUNDS

Debt Administration 294

2016A and 2019 Revenue Bonds (Fund 205) 300

2016B Worth Avenue Revenue Bond (Fund 206) 301

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

• D‐3 Storm Drainage System 311

• D‐8 Storm Drainage System 312

• D‐12 Storm Drainage System 313

• A‐4 Sanitary Sewer Pump Station Improvements 314

• A‐6 Sanitary Sewer Pump Station Improvements 315

  FY2023

  

  Table of Contents Town of Palm Beach

• A‐39 Sanitary Sewer Pump Station Improvements 316

• A‐42 Sanitary Sewer Pump Station Improvements 317

• A‐43 Sanitary Sewer Pump Station Improvements 318

• E‐5 Sanitary Sewer Pump Station Improvements 319

• E‐6 Sanitary Sewer Pump Station Improvements 320

• Town Buildings – North Fire Station 321

• Town Buildings – Phipps Ocean Park Lifeguard Building 322

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

CCMP FY22 Accomplishments and FY23 Action Plan 323

Comprehensive Coastal Management Project Fund 331

Coastal Management Program Budget 335

Worth Avenue Assessment District (Fund 311)

Worth Avenue Maintenance 337

MARINA ENTERPRISE FUND (FUND 401)

Marina Enterprise Fund Organization Chart 340

Marina Revenue and Expense Summary 344

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 359

BUILDING ENTERPRISE FUND (FUND 405)

Building Enterprise Fund Organization Chart 362

Building Fund Revenue and Expense Summary 364

Permit Issuance (212) 366

Inspection and Compliance (213) 369

INTERNAL SERVICE FUNDS

Self Insurance Fund – Risk Management (Fund 501) 371

Self Insurance Fund – Health Benefit (Fund 502) 375

Equipment Replacement Fund (Fund 320) 377

TRUST AND AGENCY FUNDS

Retirement Fund (Fund 600) 381

Retirement Fund Revenue and Expense Summary 391

Health Insurance Trust (Fund 610) 395

Health Insurance Trust Revenue and Expense Summary 395

Retiree Sliding Scale Insurance Premium Rates 2020 397

APPENDIX

Authorized Positions 400

Donation Reserve Account Summary 407

Financial Policies

Fund Balance 409

Budgetary Control 414

Designation of General Fund Balance ‐ Liability Related to Compensated Absences Leave Balances 415

Contingency Reserve – General Fund 416

FY2023

Table of Contents

Town of Palm Beach

Reserve for Encumbrances, Continuing Appropriations, and Prepaid Expenses 417

Revenue Shortfall Plan 418

Debt Management Policy 420

Contingency Reserve – Capital Fund 421

Contingency Reserve – Equipment Replacement Fund 422

Equipment Replacement Reserve 423

Enterprise Funds – Contingency Reserve 424

Golf Course Enterprise Fund – Repair and Replacement Reserve 425

Golf Course Enterprise Fund – Equipment Replacement Reserve 426

Contingency Reserve – Risk Fund 427

Reserve for Catastrophic Exposures/Emergencies – Risk Fund 428

Contingency Reserve – Health Insurance Fund 429

Funding Policy for the Town of Palm Beach Retirement System 430

Building Enterprise Fund Unrestricted Net Position 431

Town Marina Enterprise Fund – Maintenance and Improvement Reserve 432

Town Marina Enterprise Fund – Depreciation Replacement Reserve 433

Town Marina Enterprise Fund Unrestricted Net Position 434

GLOSSARY

Glossary 435

FY2023

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TOWN OF PALM BEACH EXECUTIVE SUMMARY‌

Budget for Fiscal Year 2022-2023

13

Executive Summary Town of Palm Beach

Town of Palm Beach, Florida

FY2023

October 1, 2022

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

Each year the Directors and I start the budget process 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 FY2023 budget is the result of the fifth year of hard work to find efficiencies and apply lean government principles on a Town-wide basis. Once the new budget is adopted, members of staff continue to closely examine each expenditure before it is made, to ensure the following questions are answered: 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 produced a $2.3 million surplus in FY21. We expect to have another surplus for FY22. We are proposing a budget which contains additional staffing to meet operational and service needs of the community as outlined by the Town Council and members of Town staff. Inflation continues to pose challenges to controlling costs, particularly material and labor costs in the South Florida market. The increase in the current values of real estate has allowed us to produce a budget that contains a tax cut for homestead and some non-homesteaded properties. More detail on expenditures and revenues are contained later in the summary.

This year staff has been busy implementing new initiatives and working on many significant projects. These include:

• The IT Department is busy upgrading the Town to Office 365; implementing cybersecurity measures; maintaining and upgrading the IT infrastructure; and supporting the Town staff.

• The Human Resources Department is currently undergoing a major transformation and rebranding process. Over the past three months, it has begun the shift from a highly efficient and technically competent administrative hub to a formally integrated People and Culture business partner that projects the highest quality of standards and cost- efficiencies to the internal and external marketplace. As People and Culture seeks to establish a pandemic resilient and aspirational workplace, it will feature an employee life cycle model that attracts, onboards, develops, supports, rewards, advances and retains its employees throughout their journey with the Town. By optimizing a people-

  

  Executive Summary Town of Palm Beach

  centric and highly engaged culture, its goal is to establish the Town of Palm Beach as the #1 Municipal Employer.

• Finance has developed, produced, and released a new Annual Report detailing the fiscal year end 2021 financial information, accomplishments and future initiatives.

• The Purchasing Division has begun to write all contracts and/or agreements and filtering them through legal review. They now review KPI’s of vendor performance as a tool to renew contracts or defining a plan for improvement. They also serve as a repository for all contracts and agreements within a contract management system. The Division will now be titled Procurement and Contract Management Division.

• Consultants have been selected and are beginning the process of code reform.

• A permitting software system has been selected for the Planning Zoning and Building Department and the implementation will begin soon.

• Staff has been working with the Strategic Planning Committee to develop a new strategic plan. This plan will be released during the spring of 2023.

• The Town-wide undergrounding project is now in Phase 4 and Phase 5 with Phase 6 starting shortly.

• A facilities assessment has been performed and the Capital Projects budget has been updated to reflect the findings of this assessment.

• The Town is in the implementation phase of ongoing resiliency efforts.

• The Town is actively exploring water feasibility options for future water use.

• The number of construction site monitors have been increased to resolve the issues experienced at these sites.

• The number of police officers have been increased to promote high visibility in the community to increase interaction with business, schools, and religious institutions in Town.

• The North Fire-Rescue staff will be relocated to temporary trailers for the station reconstruction efforts.

• The Mandel Recreation Center and the Seaview and Phipps Tennis centers are having record years.

• Marina revenues will exceed expectations in the initial year of operations.

• Golf revenues continue to set records.

FY2023

GENERAL FUND

FY23 Budget Presentation FY23 General Fund Revenues Property Taxes

Executive Summary Town of Palm Beach

FY23 Final 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 FY23 was 17.38%. This means for every $100 paid in taxes only $17.38 stays in the Town.

Below are the taxing districts and the adopted millage rates for FY23 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 72.69% of all taxes paid in the Town followed by the Town of Palm Beach at 17.38% with the other taxing districts making up the balance of 9.93%.

Town of Palm Beach Tax Bill Components

FY2023

Taxing Authority

FY 2022

Millage Rate

FY 2023

Millage Rate

FY23 Taxes Per

$1 Million Value

$ Change Per

$1 million Value % Change

% of Total Tax Bill

The total taxes paid per million of taxable value in the Town in FY23 will be $15,495 a decrease of $730 from FY22. Of that amount, $2,693 stayed in the Town to pay for services and the remaining $12,802 went to other taxing districts. A breakdown by taxing district for a $1 million homesteaded property using the FY23 tax rates is shown below.

Executive Summary Town of Palm Beach

FY23 Millage Rate

The millage rate table below shows the FY23 rate versus the FY22 millage. The FY23 millage rate of 2.6932 represents a 7.02% reduction from FY22 and a $113 reduction in taxes per million for homesteaded properties and an estimated $66 increase for non-homestead properties based on the 10% cap, as defined by State law.

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 rolled-back millage rate currently is 2.4843. This millage would represent a 14.23% decrease from the FY22 millage and would provide the homestead property owner a $317 per million reduction in taxes. The millage rate for FY23 represents an 8.41% increase over the rolled-back rate.

Revenues

The FY22 revenue budget estimates were conservative. For FY22 to date, many of the revenue sources are exceeding budget expectations. The FY23 revenues represent a conservative increase over FY22. The revenue budget by type for the General Fund for FY23 compared to FY22 is shown on the table on the following page:

FY2023

Executive Summary Town of Palm Beach

Significant highlights for General Fund FY23 revenues include:

• The Property Appraiser's Final Taxable Value Certification showed existing property taxable values in the Town have risen 17.95% over the prior year. The total taxable value is $25,542,199,170.

• The amount included for property tax represents the taxes generated from a millage rate of 2.6932 that represents a $113 decrease per million for homestead property owners.

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

• The increase in Licenses and Permits is due to the high volume of current activity expected to continue into FY23.

• The Intergovernmental revenue increase is due to improvements in State sales tax receipts.

• Charges for services increased mostly due to increases for special assignment overtime, parking meter fees and usage.

• Fines and forfeiture revenue decreased based on current trends.

• Investment earnings have decreased based on the current interest rate environment.

• The transfers from the Enterprise Funds represent a transfer of $25,000 from the Par 3 Golf Course enterprise fund, a transfer of $620,465 from the Marina Fund which represents General Fund allocated costs of services such as Finance, Human Resources, Town Manager and a small portion of Public Works. The transfer from the Building Enterprise Fund of $5,519,456 represents allocated costs of General Fund services provided for the building permit process. This amount was originally estimated conservatively when the fund was established. The actual costs have been much higher than originally anticipated.

• Transfers from fund balance represent transfers for Contingency and the compensated absence payouts for the year. In addition, the estimates for the reconstruction of the

  FY2023

  

  Executive Summary Town of Palm Beach

  North Fire-Rescue station have been modified, and a transfer of $2 million is for additional funding for this project.

  
  

  General Fund Expenditures

  General Fund expenditures have increased by 9.03% from FY22. The details by expenditure category are shown in the table below.

  Expenditure Category	FY2022	FY2023	FY22 vs. FY23 Difference	% Change
  Salary and Wages	$27,950,544	$31,365,775	$ 3,415,231	12.22%
  Pension Benefits	11,646,771	11,437,661	$ (209,110)	-1.80%
  Other Employee Benefits	6,624,587	7,564,885	$ 940,298	14.19%
  Contractual	11,187,512	13,205,563	$ 2,018,051	18.04%
  Commodities	1,693,282	1,932,622	$ 239,340	14.13%
  Depreciation/Capital Outlay	2,279,381	2,509,665	$ 230,284	10.10%
  Subtotal Operating Expenditures	61,382,077	68,016,171	$ 6,634,094	10.81%
  Library	363,230	374,127	$ 10,898	3.00%
  Transfer to the Risk Insurance Fund	2,173,487	2,274,106	$ 100,619	4.63%
  Transfer to Capital Improvement Program	8,428,200	9,371,020	$ 942,820	11.19%
  Transfer to Underground Utility Fund	176,550	191,116	$ 14,566	8.25%
  Transfer to the Debt Service Fund	5,676,719	5,680,666	$ 3,947	0.07%
  Transfer to Coastal Management Fund	4,920,310	5,264,732	$ 344,422	7.00%
  Extraordinary Transfer to Retirement Fund	5,420,000	5,420,000	$ -	0.00%
  Contingency	600,000	600,000	$ -	0.00%
  Subtotal Transfers and Contingency	27,758,496	29,175,767	$ 1,417,272	5.11%
  Total General Fund	$ 89,140,573	$ 97,191,938	$ 8,051,366	9.03%
  FTE Totals	350.43	362.59	12.16	3.47%

  
  

  Highlights for General Fund expenditures are as follows:

  Total operating expenditures increased $6,634,094 or 10.81% from FY22. Total transfers and other expenses increased $1,417,272 or 5.11%. Details of the changes are as follows:

  
  

  Operating Expenditures:

• A total of $3,415,231 has been earmarked to pay for increased salary and wages, and the increase in FTEs allocated to the General Fund of 9.6 (see full description later in the document). The increase also includes merit and step increases and a cost-of-living increase (COLA). Previously, the Town Council approved during the Compensation study, lowering merit increases to 1.5% - 6%, from 3% - 7.5% in FY22 and providing for an annual COLA. Last year we adopted a policy using the Social Security COLA calculation as the method to determine our annual COLA rather than focusing on a one-month snapshot, which could result in abnormal spikes. We use the average of the CPI index for the Miami- Ft. Lauderdale-West Palm Beach area for the last three reporting periods. (This CPI index is reported every other month).

  FY2023

  

  Executive Summary Town of Palm Beach

  o Using this methodology results in an 8.9% COLA at a budget cost of $2,294,643. In order to reduce the pension impact of adding the full 8.9% to salaries. The Town Council decided to add 2% of the COLA to salaries and the balance to be paid out in a non-pensionable lump sum. (The 2% COLA would keep most of the salaries within the pension assumptions).

• We are also included market adjustments for Police and Fire-Rescue personnel to ensure they remain at the 75th percentile and a 3% market adjustment for General Employee ranges to maintain internal equity and market competitiveness as well as effective compensation administration practices. Additional information regarding compensation changes can be found later in this message under “Compensation Update”.

• The total annual required contribution for the defined benefit plan (DB) and defined contribution (DC) pension benefits decreased in the general fund by a total of $209,110 due to investment gains in FY21. The General Fund portion of the defined benefit costs decreased by $302,389 offset by the defined contribution cost increase of $90,527.

• Other employee benefit costs increased by $940,298 or 14.19%. Health insurance costs increased for the first time since 2013. Total Town funding for health insurance is expected to increase by $737,914 with $619,016 of the increase allocated to the General Fund. 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 FY23 are $12,393.

• FICA tax increased by $257,655 due to the increase in the salary budget. The Longevity/Bonus program increased by $42,937. Last year the Federal government adopted Juneteenth (June 19th) as a federal holiday. After a thorough canvassing of some 50 municipalities, it was determined that approximately half of the local municipalities, including Palm Beach County have established Juneteenth has an official holiday. The holiday has been added to the FY23 budget and we will begin to observe the holiday on June 19, 2023.

• Included in Other Employee Benefits is the Transfer to the OPEB trust. The transfer to the OPEB trust fund decreased by $2,998. In the most recent actuarial report, the Town’s funding level was 147.8% funded using a 5% return assumption.

• Over half of the increase in contractual costs ($2,018,051) is due to increases in sewage treatment and disposal costs of $1,027,162 as defined by the East Central Regional Water Reclamation Facility (ECR), the remaining increase includes the addition of cloud computing services of $150,000, IT support costs of $65,000, software maintenance

  $214,487, merchant service charges for parking meters increased $38,800. Upgraded traffic software and licensing $67,600, contracted garbage collection $112,700, consultant for landfill $40,000, landscape contracting increase of $124,153, increases in facilities maintenance $135,900 and traffic studies $42,000.

• The increase in commodities of $239,340 is related to additional software $41,900, higher fuel costs $125,010, uniforms $8,450, cleaning supplies $27,700 and other supply budgets throughout the budget $18,950.

• Depreciation/Capital outlay costs increased $230,284. Most of the increase ($175,000) is due to IT equipment that includes: A virtual environment technology refresh to replace

  FY2023

  

  Executive Summary Town of Palm Beach

  aging technology, consolidation of old servers, technology improvements to the Council Chambers and EOC and Public Works Conference room and funding of $92,137 for the shortage in the Equipment Replacement Fund for an ambulance and fire engine replacement. These increases are offset by a decrease in depreciation funding.

• The funding for the Four Arts Library will increase by $10,898. This funding is now tied to CPI with a cap of 3%.

  
  

  Transfers and Other:

• The transfer to the Risk Fund increased by $100,619 due to anticipated increases in the insurance market.

• The annual transfer to the Capital Improvement Fund increased by $942,820 or 11.2% over FY22 to improve funding levels for facility projects that have been added as the result of a facilities study that was completed this year. In addition, funding of $1,500,000 was added for interconnect traffic signals and $1,000,000 for crosswalk improvements. Costs for the North Fire Rescue Station are expected to be higher than had been budgeted in FY22, so we have included an additional $2,000,000 to the budget. This additional transfer will be from General Fund reserves.

• The transfer to the Underground Utility Fund represents funding to pay for the Project

  Manager’s salary and benefits.

• The transfer to the debt service fund increased by $3,947.

• Coastal funding has been increased by 7% or $344,422. The estimates for the Mid-Town seawall replacement have been updated and additional annual funding is included in the budget and future annual contributions will also be increased. Please see the Coastal Budget section for more information about the budget and forecasted expenditures and revenues.

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

• Contingency is funded at the same amount as last year. Absent extraordinary unforeseen circumstances, this amount should be enough to cover unexpected expenditures.

  
  

  Funding By Department

  Departmental Expenditures

  The three largest departments, Police, Fire-Rescue and Public Works, account for over 58.1% of the Town budget. The transfers mentioned above account for another 26.6% for a total of 84.7% of the total Town budget. All other general government and administrative departments make up the balance of 15.3%. The charts on the following page provide a graphic example of expenditures by each department and transfer.

  FY2023

  

  

  Executive Summary Town of Palm Beach

  FY2023

  
  

  
  

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

  

  Executive Summary Town of Palm Beach

  Fund Balance

  
  

  The General Fund Unassigned Fund Balance as of September 30, 2021, was $28,001,332. This amount was $10,408,316 above the policy-required minimum. The FY23 budget includes a transfer of $600,000 from fund balance to fund the contingency. We are proposing a $2,000,000 transfer from reserves to fund the additional estimated costs for the North Fire-Rescue Station. After these transfers, the remaining unassigned fund balance will be $25,401,332. Estimated compensated absence payouts totaling $829,500 will be paid from the reserve for compensated absences. Total excess reserves in all Town funds as of September 30, 2021, were $25,123,830.

  
  

  Compensation Update

  People & Culture staff conducted an annual market assessment to ensure the Town’s pay ranges remain competitive within the Palm Beach County market and at the 75th percentile for public safety. Twenty (20) percent of all general positions and all sworn and certified positions were studied. The analysis of public safety market pay ranges resulted in increases to the minimum and maximum for all positions on the Fire Rescue step plan in order to bring the minimum and maximum to the 75th percentile inclusive of a Cost of Living Adjustment (COLA). The Police step plan will be increased for the Police Officer and the Police Sergeant position to bring the minimum and maximum to the 75th percentile inclusive of a Cost of Living Adjustment (COLA). The Police positions not of the Police step plan (Police Management) were also analyzed and resulted in increases to the minimum and maximum for all positions to bring the minimum and maximum to the 75th percentile.

  The 20% of General employees that were studied this year remain competitive and within policy with thirteen exceptions. Thirteen positions were found to be below the 65th percentile of the market and have been re-graded so that the maximum is between the 65th and 75th percentile. To remain competitive for the rest of the General positions, we have increased the salary ranges by 3% for all other General positions (unless they are at or above the 75th percentile).

  Moving forward, due to the unstable market, People & Culture has determined a more proactive approach is required to ensure that all Town salaries remain market competitive in the coming years. Rather than undertaking a costly five-year comprehensive Town salary survey, we propose to raise the annual review of all general positions from 20% to 33% to ensure that all positions are consistently reviewed within a three-year period. It also proposes a more appropriate and market-typical salary administration approach to ensure that salary scales are adjusted upwards on an annual basis from 25% to 50% of the CPI, thereby preventing the current practice of pay crowding at the top of each scale and avoiding the need for larger adjustments during those years when increased fiscal restraint is required.

  Personnel Complement

  Total FTE includes full time employees and part time no benefits employees (PTNB). The total personnel complement (for all funds Town-wide) for FY23 is 362.59 full-time equivalent

  FY2023

  

  Executive Summary Town of Palm Beach

  personnel (FTE), which is a net increase of 12.16 FTE from the adopted FY22 budget. The increase of 12.16 FTEs in FY23 is made up of the following changes in full time and part time positions:

  FY2023

  
  

  Department	Roles	# FTEs	Comments
  IT	Applications Specialist	1	Enhanced IT systems and cyber security
  Planning, Zoning & Building	Administrative Support	1	Costs absorbed by increased revenues
  People & Culture	Specialist	.25	PT to Full Time
  People & Culture	Benefits Specialist	1	Outsourced in previous budget
  Recreation	Administration	1	Support Operations
  Police	Police Officers	4	Increased security
  Police	Parking Enforcement	2	Increased enforcement
  Police/ Planning, Zoning, Building	Construction Site Monitors	2.25	Shifted to full time FTEs for site monitoring. In addition to the 1.75 in FY22 for a total of 4
  Planning, Zoning & Building	Zoning Technician	1	Costs absorbed by increased revenues
  Recreation	Pro Shop	1	Costs absorbed by increased revenues
  Planning, Zoning & Building	Building Inspector	-1	Reorganization
  Planning, Zoning & Building	Combo Plan Reviewer	-1	Reorganization
  Recreation	Part Time FTE’s	-0.34	Change annually based on needs
  Total FTE additions		12.16

  
  

  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 (Marina, Par 3 Golf Course and Building Enterprise Fund), Internal Service Funds (Health, Risk, Equipment Replacement), and Trust Funds (Pension and OPEB Trust).

  Special Revenue Fund (122) Town wide Underground Utility Project

  The Town wide Underground Utility Project fund accounts for the project costs and associated assessments and borrowings for the project. During FY23, we expect to finish construction of Phase 4 North and Phase 3 South. During FY23 work will continue on Phase 5 North and South 6 North and South and begin Phases 7 North and South. The entire project is expected to be completed in 2026.

  Debt Service Funds (205, 206)

  The Debt Service Funds provide for the payment of principal and interest on the Town’s

  outstanding bonds.

  The 2013, 2016A and 2019 Series Revenue Bond debt service is funded from non-ad valorem revenues. A portion of the debt service payment is funded through the Par 3 Enterprise Fund for

  

  Executive Summary Town of Palm Beach

  the Town’s portion of the golf course and clubhouse renovation ($187,426), and a portion is funded through the Coastal Management Fund ($509,135). The non-ad valorem revenue transfer from the General Fund for FY23 is $5,680,666.

  The 2016B Series Revenue Bonds debt service appropriation of $723,513 is funded through non ad valorem assessments on the property owners within the Worth Avenue Assessment District.

  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 FY23 on these bonds will be $3,848,755 and is included in the Town wide Underground Utility project fund.

  In 2020, the Town issued non ad valorem debt totaling $31,000,000 through a bank loan for the Marina construction project at an interest rate of 2.25%. The debt service for FY23 will be

  $1,992,950 and paid through the Marina fund. This loan is structured to include a 1% prepayment premium during the first four years and no prepayment premium thereafter.

  The Town’s outstanding Revenue Bond debt as of September 30, 2022, is shown on the table below:

  FY2023

  
  

  Year Issued	Outstanding Principal Balance September 30, 2022	Purpose
  2016A	$36,870,000	First Phase of the ACIP and Refund Outstanding Debt
  2016B	$9,535,000	Worth Avenue Commercial District Project
  2013	$4,205,000	Remaining Balance on Second Phase of ACIP
  2018	$52,225,000	General Obligation Bonds for Town-wide Undergrounding Project
  2019	$47,860,000	Taxable Refunding Revenue Bonds for Second Phase of the ACIP
  2019	$4,285,000	Refunding of Remaining Balance of First Phase of ACIP Debt
  2020	29,690,000	Marina Loan
  2021	8,360,000	General Obligation Bonds for Town-wide Undergrounding Project
  Total	$193,030,000

  

  Executive Summary Town of Palm Beach

  As of September 30, 2022, the Town’s net bonded debt will amount to 15.1% of the legal limit of

  $1,277,109,958 (5% of preliminary FY23 taxable value of $25,542,199,170).

  Capital Improvement Funds (307, 309, 311)

  For FY23, the following items totaling $9,308,345 are included in the Capital Improvement Fund (307):

  • Pavement Management - $1,000,000

  • Interconnect Traffic Signals - $1,500,000

  • Crosswalk Improvements - $1,000,000

  • Drainage Improvements - $1,325,000

  • Sanitary Sewage System Improvements - $2,475,000

  • Town Facility Improvements - $3,408,345

  • Water main improvements (WPB) - $1,000,000 (Funded by West Palm Beach)

  • General Engineering Services - $100,000

The transfer from the General Fund to the Capital Improvement Fund is $7,371,020 an increase of $942,820 from FY22 due to the addition of the Town facility improvements that reflect the recommendations from a facilities study conducted in FY22. The study and allocation from the operating budget lend itself to improved financial planning and less reliance on transfers from reserves. In addition, a transfer from General Fund reserves of $2,000,000 to the Capital Improvement Fund is also included in the budget for the anticipated additional funding needed for the reconstruction of the North Fire-Rescue Station.

The American Rescue Plan (ARP) will provide the Town funding for sewer and drainage projects. We currently expect to receive a total of $4,415,526 from this source and have received both installments of $2,207,763.

Coastal Management

The Coastal Management Fund (309) is used to fund the construction costs of the coastal projects. The details of the FY23 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. The costs estimates have increased to $18.5 million for this project and $7 million per year for the next two years has been added to the program. Also included in this budget is annual funding of $1,000,000 per year for the next ten years for seawall or bulkhead repair or replacement. We are proposing an increase in the annual funding for the coastal program of

$344,422 or 7% to begin to offset the Mid-Town seawall costs. The additional funding from the FY23 budget should lead to less reliance on transfers from reserves.

FY2023

Executive Summary Town of Palm Beach

Enterprise Funds (401, 402, 405)

Town Marina

FY2023

Town Marina reopened for new vessels on November 1, 2021. FY22 has been a very successful year. The success is due in part to improvements in branding, marketing, and financial planning. For FY22, revenues exceed budget estimates by over $2.1 million. The FY23 revenue budget is projected to be 31% or $3,024,239 higher than FY22 budget. The expenditure budget has increased by 18.6% or $447,109 due to increases in the submerged land lease, which is based on revenues, increases in salaries and benefits, promotional advertising, electricity, and contractual services. The projected net income for FY23 is 113% higher than the forecast prepared last year.

Par 3 Golf Course

Par 3 revenues are projected to increase over end of year estimates during FY23. The FY23 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

$803,626 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 $236,538. Additional deductions from the operating profit include transfers for debt service ($187,426), contingency ($130,169) and the general fund transfer ($25,000).

Year end revenues for the Par 3 are above estimates at 134% of budget. The Par 3 will end the year with a surplus. The LTFP forecast shows improvement to the net assets of the fund.

Building Enterprise Fund

The Building Enterprise Fund was created in FY21 to account for all building permit revenue and expenses and allow for greater transparency as required by the State of Florida. During FY20, 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. FY22 revenues are higher than budget and will provide for a higher surplus than anticipated. Total revenues for FY23 are conservatively estimated to be $9,268,236 and total operating expenses are $8,268,236 which includes a transfer to the General Fund of $5,519,456, which is for the allocated costs that the General Fund provides to the building permit process. Building permit related revenues have increased by $1,227,797 due to the recent increase in building activity. After depreciation of $89,503 and a 5% operating expense contingency of

$187,439 there is a projected reduction in reserves of $276,942.

Executive Summary Town of Palm Beach

For the past two years, the budget included a $3,200,000 transfer to the General Fund for allocated costs. This amount was based on an estimate when the fund was established. After two years of operations, there is a better understanding of the true allocated costs. The FY23 amount represents the new allocation. At the end of FY22, a calculation was made based on the new allocation and a true-up amount was transferred to the General Fund as directed in the Building Fund Reserve Policy adopted by the Town Council last year.

Internal Service Funds (501, 502, 320)

The transfer to the Risk Fund (501) has increased by $100,619 due to expected increases in the insurance market.

The transfer from all funds to the Health Insurance Fund (502) has increased for the first time since FY13 due to recent higher than normal claims experience. The increase in Town funding is

$737,914 or 20%. During FY21 the fund had a deficit of $601,379. This was the first deficit since 2008. A deficit is also expected for FY22. These past 2 years could be an anomaly influenced or caused by the pandemic and individual catastrophic events. Due to the expected increase, we are proposing a 10% increase in employee contributions for their dependent health premiums. This is the first increase for employees since 2014.

The Town of Palm Beach is re-establishing a Town Clinic, located at Public Works, on Old Okeechobee Road in West Palm Beach. The former clinic, originally opened in 1973 and staffed by a Town employee nurse, administrative assistant and PT physician, was closed in 2016 when it was decided that similar services could be provided by outside contractors at a lower cost.

In the years following, the complexity and costs of managing multiple contractors and employee absenteeism resulted in a re-examination of the business model. The new model differs from the former Town Clinic in that it will be fully outsourced (including the registered nurse practitioner, administrative support and physician oversight) to a single full-service provider. Concentra, is the #1 national provider that specializes in occupational health management and effective and efficient coordination and oversight of workers compensation claims. With a focus on total employee health and return on investment to municipalities, the clinic will provide a level of service that will greatly increase overall employee health, reduce employee absenteeism, and the need for at least five departments to manage and administer multiple providers. This model also has the potential to reduce the costs of overall health insurance premiums through preventative health, early detection, group pharma purchases, and decreased claims for all Town employees. The clinic budget in the first year is estimated at $347K of which $40K are startup costs.

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

FY2023

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.

Trust Funds (600 & 610)

Retirement (600)

The FY23 actuarially determined contribution to the DB plan totals $11,457,243. The contribution decreased $288,762 due to the strong investment return for FY21. The return assumption will decrease from 6.6% in FY22 to 6.4% in FY23.

The budget also contains the $5,420,000 extraordinary contribution to the retirement plan. The funded ratio increased from 72.7% to 76.1% and the unfunded liability decreased from

$94,163,607 to $85,333,977. Assuming all assumptions are realized the total Town contributions to the retirement system, including the extra Town contributions of $5.42 million per year are expected to be in the range of $12.2 to $16.8 million over the next 8 years and are then projected to decline to around $4.9 to $5.5 million.

The Town contribution amounts by employee group are shown below versus the FY22 contribution. Legacy plan costs represent $8,275,061 (72.2%) of the total and the costs for the ongoing plan are $3,182,182 (27.8%).

FY2023

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

FY2023

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

For General Employees and Lifeguards, 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:

Employer Defined Contribution Funding

Executive Summary Town of Palm Beach

Health Insurance (OPEB) Trust (610)

FY2023

The actuarially determined transfer to the OPEB trust from the General Fund in the FY23 budget is $331,217. This amount is $2,998 less than FY22. The funded ratio in the September 30, 2021, actuarial report was 147.8% 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 FY23 adopted budget and is on

the Town’s website. Portions of the plan are included in the budget document.

Conclusion

This concludes the executive summary portion of the FY23 final budget. Please see the documents that follow this summary for detailed information about the FY23 budget.

Respectfully Submitted,

Kirk Blouin Town Manager

cc:

Bob Miracle, Deputy Town Manager – Finance and Administration Carolyn Stone, Assistant Town Manager

Department Directors

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Strategic Planning and Performance Measurement Town of Palm Beach‌

STRATEGIC PLANNING AND PERFORMANCE MEASUREMEN

In 2021, Mayor Danielle H. Moore and Councilmembers Araskog, Crampton, Cooney, Lindsay and Zeidman created the Strategic Planning Board to service in an advisory capacity in the development of the Five-Year Strategic Plan. The Board commenced the strategic planning process on January 20, 2022 with the goal of it being presented to the Town Council for adoption in Spring 2023 with incorporation into the planning of the Fiscal Year 2024 budget cycle.

The plan is targeted for a five-year lifecycle servicing as a roadmap through FY2028. The execution and monitoring of the plan will occur in the years following, including elements of strategy refinement and mid- cycle reviews.

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 FY23.

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...

FY2023

Strategic Planning and Performance Measurement Town of Palm Beach

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.

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.

FY2023

Strategic Planning and Performance Measurement Town of Palm Beach

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.

TOWN STAFF VISION

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:

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!

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.

FY2023

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Strategic Planning and Performance Measurement Town of Palm Beach

THE VISION/STRATEGIC PLAN/PERFORMANCE MEASUREMENT PROCES

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.

Strategic Planning and Performance Measurement Town of Palm Beach

THE VISION/STRATEGIC PLAN/GOALS AND PERFORMANCE MEASUREMENT PROCESS

FY2023

Vision

• Town-wide and Organization Vision

Strategic Plan

• Quality and Responsive Town Government

• Public Facilities and Infrastructure

• Character and Quality of Life

  
  

  
  

  Town-wide Goals

• Town-wide goals set by Town Council

  
  

  
  

  Budget

  • Annual FY23 Budget

    
    

    
    

    Department Goals

• Department and Program Goals

  
  

  
  

  Performance Measures

• Performance Measures

FY2023

3

Strategic Planning and Performance Measurement Town of Palm Beach

TOWN-WIDE BUDGET PRIORITIES FOR FY202

The Town Council’s annual budget priorities for FY2023 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.

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.

FINANCIAL STABILITY AND PLANNING

Priority #1: Continue to implement cost-saving measures and identify opportunities to increase non-tax related revenue, while improving operational efficiencies, without compromising the community's expectation for exceptional public service

Town Clerk: Enhance technological tools to optimize the delivery of exceptional service

Police Department: Maximize the use of technology to further reduce crime and improve efficiency of police service in order to provide the highest level of protection to achieve exceptional quality of life for the community

Police Department: Monitor the allocation of resources to ensure the public's safety, address traffic flow issues and provide timely communications

Marina Enterprise Fund : Maximize revenue at the Marina

Par 3 Fund: Continue to grow the auxiliary services revenue and improve customer relations

Self Insurance Fund - Risk: Identify exposures in order to determine the types of coverage available to the Town

Strategic Planning and Performance Measurement Town of Palm Beach

FY2023

Priority #2: Complete and review water feasibility study. Evaluate water supply and distribution otions with an emphasis on service needs, quality and cost. Develop an implementation plan and begin negotiations for a contract with the provider.

Public Works: Continued evaluation of potable water supply alternatives at Town Council's direction

Priority #3: Continue the review of the Town Zoning Code and develop a plan with solutions to address the most pressing Town Zoning Code Reform needs. Develop a budget and process to include analysis of the existing code, possibly create a steering committee, host multiple public engagement sessions, including charrettes, to solicity community feedback, research impacts and requirements of federal, state and county regulations and prepare recommended code changes, with the assistance of the Planning and Zoning Commission and outside consultants.

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 are requested by Town Council

Priority #4: Continue to proactively address construction site violations in an effort to ease parking and traffic related issues, noise complaints and other associated community concerns, through enhanced regulations and improved code and parking enforcement.

Public Works: Right-of-Way maintenance and enforcement to ensure all Town right-of-ways are managed to meet the Town's standards applicable to public rights-of-way and easemenets within the Town of Palm Beach

Building Fund: Monitor construction sites to reduce the impact of issues in the community

COMMUNITY STANDARDS, REGULATIONS AND QUALITY OF LIFE

Strategic Planning and Performance Measurement Town of Palm Beach

ENVIRONMENT AND RESILIENCY

FY2023

Priority #5: Continue to review the second phase of the Woods Hole Group resiliency study. The second phase identified methods to mitigate the impacts of sea level rise and prioritized solutions. A paramount issue is the amount of freeboard to be established for new construction, substantial improvements, substantial damage properties and seawall construction. 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.

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

Priority #6: Initiate a strategic crosswalk initiative. This will include an analysis of the current crosswalks on the public roadways and identify new and improved methods and technologies to enhance pedestrian safety. The plan will encompass a budget, funding plan, priority list and long-term implementation strategy.

CAPITAL IMPROVEMENT PROJECTS

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.

FY2023

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Location

Town of Palm Beach

LOCATIO‌‌

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.

Town Overview/Demographics Town of Palm Beach

FY2023

Palm Beach at a Glance

TOWN OVERVIEW/DEMOGRAPHICS

Town of Palm Beach Demographics

FY2023

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Town History

Town of Palm Beach

TOWN HISTOR‌

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.

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.

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.

FY2023

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Taxable Value and Millage Rate Town of Palm Beach

TAXABLE VALUE AND MILLAGE RAT‌

The Town Council approved a millage rate of 2.6932 for FY23, a decrease from the FY22 millage rate of 2.8966. Taxable value increased 17.95% to $25,542,199,170 for FY23. Ad Valorem revenue of

$65,419,700 is included in the FY23 budget. The 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 $755,083. The chart below identifies the millage rate options available to the Town and the Town’s adopted final millage rate.

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 1.0613%. The 2/3 vote maximum rate is 110% of the majority maximum rate.

The Town’s taxable value since 2014 has increased 105% to all-time highs as shown in the chart below. In 2022 the taxable value increased by 17.95%. New construction for the year totaled $319,673,089 with 49 Certificates of Occupancy issued, both were historic highs.

Taxable Value and Millage Rate Town of Palm Beach

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 below.

The Town millage rate represents 17.38% of the total tax bill. The table below illustrates the difference between the FY22 vs. FY23 total tax bill by taxing district for a Palm Beach property owner with a taxable value of $1 million.

FY2023

Impact on owner of $1 million property

Taxable Value and Millage Rate Town of Palm Beach

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

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

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Taxable Value and Millage Rate Town of Palm Beach

PROPERTY BREAKDOWN BY NUMBER OF PARCEL

The Town has a total of 9,410 total parcels. Residential units total 8,860 or 94% of all parcels. Condominiums and Cooperatives represent the greatest percentage of total parcels in the Town at 67.6% or 6,359 parcels. Single family residential parcels are the second largest group at 2,289 parcels or 24.3% of the total. Commercial and industrial parcels total 401 and the balance is made up of multi-family, government, institutional and miscellaneous parcels. There are 3,438 Properties with a Homestead exemption representing 36.5% of the total parcels in the Town.

PROPERTY BREAKDOWN BY TAXABLE VALUE

The taxable value of parcels in the Town total approximately $25.4 billion. Residential parcels represent 92.1% of the total value of parcels at

$23,382,069,468 and single family residential represents 65.2% of the total value. Condominium and Cooperative values total $5,308,392,939 and represent 20.9% of the total taxable value.

Commercial and industrial properties represent 7.4% or $1,870,635,976 of the total value of parcels.

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Taxable Value and Millage Rate Town of Palm Beach

HISTORICAL BUILDING PERMIT DETAI

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. The total number of permits issued for FY22 was 5,238 versus 5,213 in FY21. Total construction value for FY22 was $471,352,200 compared to $398,172,523 in FY21 and exceeded all prior year’s totals. We have estimated higher than average permit revenues for FY23 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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Financial Policies Town of Palm Beach

FINANCIAL POLICIE‌

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.

GENERAL POLICIES

• Annually prepare a budget, submit it to the Town Council for approval and publicly issue a budget document.

  
  

• Identify costs and funding sources before recommending approval of capital and operating budgets.

  
  

• Provide for sound financial planning, the best possible bond rating, funding of depreciation and adequate working capital in all funds.

  
  

• Take measures to protect against catastrophic losses through a combination of insurance, funded self-insurance, and cash reserves.

  
  

• Follow the Town of Palm Beach Charter when preparing the Town’s budget.

  
  

• Estimate and review the long-term costs associated with proposed new programs or services.

  
  

• Assign all program costs as accurately as practical (including interfund transfers when necessary) utilizing intergovernmental service funds where indicated.

  
  

• Annually review all existing programs to determine whether a recommendation to the Town Council to maintain, decrease, or increase service levels is appropriate.

  
  

• Review annually all administrative policies governing accounting procedures, billing, purchasing, asset use and control, and risk management.

  
  

  

  OPERATING BUDGET POLICIES

• Pay for all current year operating expenses with current year revenues and/or available fund balances.

  
  

• Provide for adequate funding of all pension plans, as determined by the Town’s actuary.

  
  

• Make all purchases in an impartial, economical, efficient, and competitive manner, in accordance with all Federal, State and municipal laws and coordinated through the Purchasing Division.

  
  

• The budget will be controlled at the program level within each department by the applicable department head. Budget amendment requests and transfers of funds between programs will originate from the applicable department director and the Finance Director and shall be subject to the approval of the Town Manager.

  
  

  

  Financial Policies Town of Palm Beach

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• The Town Manager may authorize transfers between departments if the action is deemed necessary to meet the obligations of the Town.

  
  

• Issue a Comprehensive Annual Budget Document after adoption.

  
  

  
  

  

  CAPITAL BUDGET POLICIES

• Evaluate the relative merit of each capital project according to the Town Council’s goals and

  priorities.

  
  

• Rely on internally generated funds and/or grants to finance its capital needs. Debt will be issued for a capital project only in the case of an emergency, or when inclusion of a project in the Town’s pay-as-you-go Capital program will preclude the construction of smaller necessary capital improvements.

  
  

• Thoroughly evaluate and update the Capital Improvement Program on an annual basis providing detailed information regarding operational impacts.

REVENUE MANAGEMENT POLICIES

• Levy taxes to provide the desired level of service.

  
  

• Annually review all revenue schedules, including taxes, rates, licenses, user fees, and other charges,

  to insure compliance with Town Council’s approved policies.

  
  

• Maintain a diversified revenue base to help mitigate the effects of short-term fluctuations in any one revenue source.

  
  

• Conservatively estimate annual revenues utilizing established industry standards along with historical trend information.

  
  

• Annually review user fees for the Recreation Programs and the Marina and Golf Course Enterprise Funds and set at a level that is competitive in the market and provides value for Town residents.

  
  

• Review new sources of revenue to fund operating and capital costs consistent with the Town

  Councils’ goals and priorities.

  
  

  
  

  

  INVESTMENT MANAGEMENT POLICIES

• Prepare a cash flow analysis of all funds on a regular basis. Disbursement, collection and deposit of all funds will be scheduled to insure cash availability.

  
  

• Deposit funds only in financial institutions which are insured by the Federal Deposit Insurance Corporation or are approved for full collateralization by the public deposit protection act or other state statutes.

• Pool cash from all legally permitted funds for investment purposes.

  

  
  

  Financial Policies Town of Palm Beach

• Maximize the investment rate of return. Adhere to lawful investment options. Safety of the principal shall be the dominant requirement, followed by sufficient liquidity to meet operating requirements, and then yield.

  
  

• Insure timely deposit of all collected revenues.

  
  

  
  

  

  DEBT MANAGEMENT POLICIES

• Periodically approve the issuance of Debt Obligations on behalf of the Town to finance the construction or acquisition of infrastructure and other assets for the purpose of meeting its governmental obligations to its residents.

  
  

• Approve the issuance of Debt Obligations to refund outstanding debt when market conditions indicate or for management considerations.

  
  

• Assure that such Debt Obligations are issued and administered in such a manner as to ensure and sustain the long-term financial integrity of the Town, to achieve the highest possible credit rating and to preserve and enhance the quality of life, safety and welfare of its citizens.

  
  

• Assure that such Debt Obligations shall not be issued or debt proceeds used to finance current operations of the Town except as provided herein.

  
  

• Issue Debt Obligations if necessary to minimize the impact of construction or acquisition of infrastructure and other assets on the budget of the Town.

  
  

• Consider long-term financing for the acquisition, maintenance, replacement, or expansion of physical assets (including land) only if they have an economic/useful life of at least five years.

  
  

• Not issue debt for periods exceeding the useful life or average useful lives of the project or projects to be financed.

  
  

• Normally rely on internally generated funds and/or grants to finance its capital needs. Debt will be issued for a capital project only in the case of an emergency, or when inclusion of a project in the Town’s pay-as-you-go capital program will preclude the construction of smaller necessary capital improvements.

  
  

• Keep outstanding debt within the limits prescribed by Section 7.01 of the Town Charter.

  
  

  
  

  

  ACCOUNTING, AUDITING AND REPORTING POLICIES

• Establish and maintain a high degree of accounting competency. Financial accounting and reporting will be done in accordance with methods prescribed by the Governmental Accounting Standards Board and the Government Finance Officers Association, or their equivalents.

  
  

• Present monthly and annual reports to the Town Council summarizing financial activity.

• Maintain financial systems to monitor expenditures, revenues and performance of all municipal programs on an ongoing basis.

  
  

• Provide full disclosure in annual financial statements and bond representations.

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  FY2023

  Financial Policies Town of Palm Beach

• Use an independent certified public accounting firm to perform an annual audit.

  
  

• Publicly issue a Comprehensive Annual Financial Report.

  
  

• Comply with all required reporting requirements related to bond issuance terms.

  
  

  
  

  

  RESERVE POLICIES

• Maintain a contingency reserve in the General Fund equal to 1% of the proposed General Fund budget to address unexpected needs that occur throughout the year, subject to the formal affirmative vote of the Town Council.

  
  

• Maintain a contingency reserve in the Capital Fund equal to 10% of the proposed Capital Fund budget to address unexpected needs that occur throughout the year, subject to the formal affirmative vote of the Town Council.

  
  

• Maintain an assigned fund balance in the General Fund equal to a minimum of 25% of current year General Fund budgeted expenditures.

  
  

• Maintain a contingency reserve for the Equipment Replacement Fund of $500,000 to address unexpected needs that occur throughout the year, subject to the formal affirmative vote of the Town Council.

  
  

• Maintain a contingency reserve in the Enterprise Funds equal to 5% of the proposed Town Marina and Golf Course Enterprise Fund’s operating expense budget to address unexpected needs that occur throughout the year, subject to the formal affirmative vote of the Town Council.

  
  

• Maintain a contingency reserve in the Self-Insurance Risk Fund of $500,000 to address unexpected needs that occur throughout the year, subject to the formal affirmative vote of the Town Council.

  
  

• Maintain a contingency reserve in the Self-Insurance Health Fund of $500,000 to address unanticipated expenditures and/or to meet unexpected increases in health insurance costs and claims exposure.

  
  

• Establish a reserve to designate fund balance in the amount equal to the Town’s unpaid obligations,

  unfinished projects and prepaid expenses that carry over from one fiscal year into the next.

  
  

• Maintain minimum unrestricted net position levels equal to one year of operating expenses plus one year of debt service.

  
  

• Maintain minimum unrestricted net position levels equal to or less than a four-year average of the

  Fund’s operating budget in the Building Enterprise Fund.

  
  

• Maintain a minimum reserve of $2,500,000 for the Risk Fund designated as a reserve for catastrophic exposures/emergencies.

  
  

• Maintain a reserve for funding the replacement costs of General Fund existing equipment, vehicles, and computers when they reach the end of their useful lives. The reserve will be maintained at a

  

  
  

  Financial Policies Town of Palm Beach

  rate of 100% of accumulated depreciation (calculated at replacement cost) of the existing equipment.

  
  

• Maintain a reserve for funding the replacement costs of Golf Course Enterprise Fund existing equipment, vehicles, and computers when they reach the end of their useful lives. The reserve will be maintained at a rate of 100% of accumulated depreciation (calculated at replacement cost) of the existing equipment.

  
  

• Maintain a reserve for funding a dock replacement fund. The reserve will be maintained at a rate of 100% of accumulated depreciation based on the cost of construction for the marina built in 2021.

  
  

• Maintain a repair and replacement reserve for funding the maintenance and improvement projects for the Golf Course.

  
  

• Maintain a reserve for funding the costs on non-routine maintenance and improvement projects of the Town Marina. The reserve fund is to be funded at a rate of 1% of annual revenues calculated at fiscal year-end.

  
  

• Maintain a commitment of fund balance in the General Fund for payment of the liability related to compensated absences. This commitment will be funded at a rate of 100% of the fiscal year end accrued balance.

  
  

  

  RETIREMENT FUNDING POLICY

• The Town of Palm Beach will budget and contribute an amount equal to the Actuarially Determined Employer Contribution (ADEC).

  
  

• In addition, the Town of Palm Beach will contribution additional funds over and above the ADEC during the first month of the fiscal year. These additional funds serve to reduce the Town’s Unfunded Actuarially Accrued Liability (UAAL) and will be reflected as receivable contributions in

  the actuarial valuation that is as of the September 30th immediately preceding the deposit date of the additional Funds.

  
  

• The amount of $5,420,000 of additional funding will be paid annually until fully funded, unless reduced due to a maximum allowed under this policy and subject to said funds being budgeted annually.

  
  

• The total Town contribution (including the ADEC) shall be capped at $16 million (indexed after 2017 at 2.75% per annum).

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Budget Preparation Process Town of Palm Beach

BUDGET PREPARATION PROCES‌

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.

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.

Budget Preparation Process Town of Palm Beach

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.

FY2023

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 Annual Comprehensive Financial Report (ACFR) 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.

BUDGETS AND BUDGETARY REQUIREMENTS

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

• Under the Laws of the State of Florida and the Town Code, prior to July 31, the Town Manager submits to the Mayor and Town Council a proposed Annual Budget and Financial Plan for the fiscal year, commencing the following October 1st. The Annual Budget and Financial Plan is prepared by fund, function and activity and includes proposed expenditures and the means of financing them.

• Two Public hearings are conducted to obtain taxpayer comments.

• Prior to October 1st, the budget is legally enacted by the Town Council through passage of a resolution.

  
  

  Budget Preparation Process Town of Palm Beach

• Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary control in the General Fund and Capital Projects Funds. On a Non-GAAP budgetary basis, encumbrances are recorded as expenditures of the current year. On a GAAP basis, encumbrances at year-end are reported as reservations of fund balance for subsequent-year expenditures.

• Budgets are adopted each fiscal year for the General, Debt Service, Capital Projects, Enterprise, Internal Service, and Trust Funds. Budgets are adopted on a basis consistent with generally accepted accounting principles except that budgetary comparisons for the General Fund and Capital Projects include encumbrances as expenditures.

• All annual unencumbered appropriations lapse at fiscal yearend.

• Changes or amendments to the budgeted amounts at the fund level must be approved by Ordinance by the Town Council; however, changes within a function or activity may be approved at the administrative level.

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  TRUTH IN MILLAGE (TRIM)

  The budget and property tax rate adoption process is governed by the State Statute known as TRIM (truth in millage). In Florida, properties are assessed by the County Property Appraiser and property taxes are collected by the County Tax Collector. Property owners are eligible to receive a homestead exemption of

  $50,000 on their principal place of residence. All property is assessed at 85% of market value.

  
  

  By State Law, the Town is required to hold two public hearings for adoption of a property tax rate and budget. The first public hearing is advertised by the Property Appraiser's mailing to each property owner a TRIM notice. In addition to notification of this first public hearing the TRIM notice contains the following information:

• The new assessed value and the assessed value for the prior year and any exemptions on the property;

• The prior year property taxes;

• The tax bill if the rolled-back rate is levied for the new year (the rolled-back rate is that property tax rate which would derive the same amount of revenue based on the new assessed values as was raised in the prior year at the old assessed values); and

• The property tax bill if the proposed budget is adopted.

The second public hearing is advertised by means of a newspaper advertisement which must be published not more than 5 days but not less than 2 days prior to the second public hearing. Accompanying this advertisement is a summary of the revenues and expenditures contained within the budget tentatively approved at the first public hearing.

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Budget Preparation Process Town of Palm Beach

Town Council sets Town-wide goals for FY23

Departments prepare budget requests for FY23

Town Manager and Finance Director review budget requests with each department

Proposed Budget Submitted to Town Council

First Public Hearing on tentative budget and proposed tax rate

Second and final Public Hearing to adopt tax rate and budget

Final budget approval and publication

BUDGET PROCES

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Budget Preparation Process Town of Palm Beach

BUDGET CALENDA‌

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Financial Structure Town of Palm Beach‌

DESCRIPTION OF FUNDS AND FUND TYPE

For accounting purposes, a state or local government is not treated as a single, integral entity. Rather, a

government is viewed instead as a collection of smaller, separate entities known as “funds”. The

Governmental Accounting Standards Board’s (GASB) Codification of Governmental Accounting and Financial Reporting Standards (Codification), Section 1300, defines a fund as:

A fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

All of the funds used by a government must be classified into one of seven “fund types.” Four of these fund types are used to account for a state or local government’s “governmental-type” activities and are known as “governmental funds”. Two of these fund types are used to account for a government’s

“business-type” activities and are known as “proprietary funds”. Finally, the seventh fund type is reserved for a government’s “fiduciary activities”.

GOVERNMENTAL FUNDS

Four fund types are used to account for governmental-type activities. These are the general fund, special revenue funds, debt service funds, and capital projects funds.

General Fund (Major)

The General Fund is used to account for most of the day-to-day operations of the Town, which are financed from property taxes, fees, licenses, permits, fines and forfeitures, intergovernmental and other general revenue. There can only be one general fund. Activities financed by the General Fund include the following:

• General Government

  Includes expenditures for Compensated Absences and other Town-wide items.

• Legislative

  Includes expenditures for the Mayor and Town Council.

• Town Manager

  The budget of the Town Manager includes expenditures for administrative expenses relating to the Town Manager’s Office, Advice and Litigation expenses for the Town Attorney and outside counsel, Information Technology and the Town Clerk’s Office.

  
  

  In FY17, the Town Clerk’s Office became a division of the Town Manager’s Office. The Town Clerk’s Office is responsible for the records of the Town as well as conducting elections held within the Town. The Department also processes permits for charitable solicitations, special events, commercial motion picture-making, going-out-of-business sales, and door-to-door solicitations.

• Human Resources

  The Human Resources Department is responsible for the recruitment, screening, and selection of employees to serve the Town. The Department is also responsible for employee benefits administration and compensation analysis. The Risk Manager is also under the supervision of the Human Resources Department.

• Finance

  
  

  Financial Structure Town of Palm Beach

  The Finance Department is responsible for the administration, development and monitoring of the operating and capital budgets, preparation of the comprehensive financial reports, investments, debt management, cash management, and the maintenance of accurate financial reporting systems to meet all of the Town needs. The Department also is responsible for the operation and management of the purchasing, payroll and accounts payable functions.

• Planning and Zoning

  The Planning and Zoning Department is responsible for zoning changes. The Department also assists residents, businesses, and the construction industry in code compliance. The Department strives to preserve the aesthetic, historical, and economic values of Palm Beach.

• Fire-Rescue

  The Fire-Rescue Department provides fire suppression, fire prevention education, rescue and emergency medical care and ocean rescue functions to the citizens and visitors to the Town. The Department conducts education programs on injury, heart attack and stroke prevention.

• Police

  The Police Department is responsible for the prevention of crime, preservation of peace, enforcement of laws and ordinances. This is accomplished through the patrol services, organized crime, vice and narcotics (OCVAN), crime scene/evidence, parking control enforcement and communications.

• Public Works

  The Public Works Department is responsible for the repair, maintenance, and cleaning of streets within the Town, the maintenance of storm sewers and sanitary sewers, the collection and disposal of residential and commercial garbage and yard trash, beach cleaning, the maintenance of the Town parks and buildings, coastal management, and providing the general engineering services for the Town.

• Other

  Under this classification are expenditures relating to the Four Arts Library and contingent appropriations.

• Transfers to other Funds

  This classification includes transfers to the capital, coastal, underground utility project, risk insurance, OPEB Trust, debt service funds and the extraordinary retirement contribution.

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  SPECIAL REVENUE FUNDS

  Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources which, by law, are designated to finance particular functions or activities of government and which therefore cannot be diverted to other uses. The Town has the following special revenue funds for which an annual budget is not adopted:

  • (101) State Forfeiture Fund (Nonmajor) - Accounts for State confiscated property through the Police Department per Florida State Statutes Section 932.

  • (102) Federal Forfeiture Fund (Nonmajor) - Accounts for federally confiscated property through the Police Department. An annual report is submitted to the United States Department of Justice by November 30th of each year.

• (103) Donations Fund (Nonmajor) - The Town of Palm Beach receives substantial donations each year from its residents. Most donations are earmarked for specific departments and/or purposes.

• (110) Grant Fund (Nonmajor) – Accounts for grants received by the Town.

  
  

  Financial Structure Town of Palm Beach

• (120) Underground Utility Assessment Fund (Nonmajor) – Accounts for assessment projects relating to undergrounding utilities in various assessment areas in the Town.

• (121) Special Assessment Maintenance Fund (Nonmajor) – Accounts for the non-capitalized expenses related to the assessment districts.

  
  

  The Town has the following special revenue fund for which an annual budget is adopted:

• (122) Town-wide Undergrounding of Utilities Project Fund (Major) – Accounts for undergrounding utilities town-wide for all areas not previously completed.

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  DEBT SERVICE FUNDS (NONMAJOR)

  The Debt Service Funds are used to account for the payment of interest and principal on general and special obligation debts other than those payable from special assessments and debt issued for and serviced by a governmental enterprise. The sources of revenues in these funds are transfer of non-ad valorem revenue from the General Fund and transfers of assessment revenue from the Worth Avenue Assessment Area Improvement Fund.

  
  

• (205) Revenue Bond Series 2010A, 2013, 2016A and General Obligation Bond Series 2018 – This fund accounts for the debt service for the accelerated capital improvement program and the Town-wide Underground Utility Project.

• (206) Revenue Bond Series 2010B and 2016B – This fund accounts for the debt service for the Worth Avenue Special Assessment District Construction Project.

  
  

  
  

  CAPITAL PROJECTS FUNDS

  The Capital Projects Funds account for all resources used for the acquisition and/or construction of capital infrastructure by the Town except those financed by Enterprise and Internal Service Funds. The sources of revenue in these funds are revenue bonds, transfers from other funds and grants.

  
  

• (307) Capital Improvement Fund (Nonmajor) - This fund accounts for various construction projects undertaken by the Town. Any unexpended amounts at fiscal year- end, are rolled over to the new fiscal year. A five year Capital plan is presented during the budget process, of which only the first year is adopted by the Town Council. This fund is financed on a pay-as-you go basis from the General Fund.

• (309) Comprehensive Coastal Management Plan (CCMP) Construction Fund (Major) - This fund was created during Fiscal Year 2000 to account for the Beach Restoration Project construction costs financed with proceeds from the 2000 Revenue Bond.

• (311) Worth Avenue Assessment Area Improvement Fund (Nonmajor) - This fund was created during Fiscal Year 2010 to account for pre-construction and ongoing maintenance costs for Worth Avenue Improvements.

  
  

  Financial Structure Town of Palm Beach

  PROPRIETARY FUNDS

  Two fund types are used to account for a government’s business-type activities (activities that receive a significant portion of their funding through user fees). These are the enterprise funds and the internal service funds.

  FY2023

  
  

  

  ENTERPRISE FUNDS

  Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises; where the intent of the government’s board is that the costs of providing goods and services to the general public on a continuing basis are financed or recovered primarily through user charges; or where the government’s board has decided that periodic determination of net income is appropriate for accountability purposes.

  
  

• (401) Marina Enterprise Fund - This fund was created in FY2019 after the Recreation Enterprise Fund was dissolved and accounts for the Marina services at the Town Docks. The fund also includes capital projects and for the enterprise fund.

• (402) Par 3 Enterprise Fund – This fund was created in FY2019 after the Recreation Enterprise Fund was dissolved and accounts for the revenues and expenses of the Par 3 Golf Course. The fund also includes capital projects and equipment replacement reserves for the enterprise fund.

• (405) Building Enterprise Fund – This fund was created in FY2021. The fund includes the issuance of permits for building, mechanical, plumbing, electrical, gas, energy and coastal construction.

  
  

  INTERNAL SERVICE FUNDS

  Internal Service Funds are used to account for the financing of goods or services provided by one department or agency of a government to other department or agencies on a cost reimbursement basis. Accounting for Internal Service Funds as a proprietary fund type is designed to accumulate the total cost (including depreciation) of providing a particular service. Costs for services are reimbursed by the departments or agencies to which the services are provided.

  
  

• (501) Risk Management Self Insurance Fund - This fund was established to account for the Town’s Property, Liability and Worker’s Compensation Insurance costs. Monthly funding transfers are made from the General Fund to the Risk Fund.

• (502) Health Insurance Self Insurance Fund - This fund was established to account for the Town’s health insurance costs which include medical, dental, life, long-term disability accidental death/dismemberment and supplemental life insurance. Monthly funding transfers are made from the General Fund to the Health Fund.

• (320) Equipment Replacement Fund - This reserve was established to fund the replacement cost of existing equipment, vehicles and computers when they reach the end of their useful lives. The reserve has significantly reduced the budgetary fluctuations due to purchases of equipment and established the fixed asset inventory and depreciation schedule required by GASB 34.

  
  

  Financial Structure Town of Palm Beach

  FIDUCIARY FUNDS

  These funds are used when a government holds or manages financial resources in an agent or fiduciary

  capacity. This single type is subdivided into four “sub-fund types” to account for various types of fiduciary obligations. These are the pension trust fund, nonexpendable trust fund, expendable trust fund, and agency funds.

  FY2023

  
  

  

  TRUST FUNDS

  Trust funds are used when governments manage pension and OPEB trust plans. The sources of revenues in these funds are transfers from other funds, interest earnings and employee contributions.

  
  

• (600) Employees Retirement Fund - This fund accounts for the Town’s defined benefit retirement

  program for General, Lifeguard, Police Officers and Firefighter employees.

• (610) Other Post-Employment Benefits (OPEB) Trust Fund - This fund was established by Ordinance 9-06 to fund the portion of health care benefits paid by the Town for retirees.

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.

FY2023

T

Forecast Summary Town of Palm Beach

GENERAL FUND LONG-TERM FINANCIAL PLAN FORECAS‌

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 FY23 proposed budget and a 9-year forecast through FY32. The complete 2022 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:

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 is described in greater detail later in this section.

The assumption for inflation for FY24 is 3% and the balance of the forecast is 2.5% which is based upon the forecast in the June 2022, 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 and actuarial estimates for General, Police and Firefighters. 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. 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 Worker’s Compensation insurance assumptions are based upon information received from our brokers regarding potential increases.

Forecast Summary Town of Palm Beach

FY2023

2022 FORECAST

The forecast charts shown on the following pages include actual results for 2019-2021 shown in dark blue, the FY22 budget, shown in medium blue and the proposed FY23 budget shown in violet, and then forecasts through FY32 shown in light blue. The forecast maintains service levels and funds the additional contribution of $5,420,000 for the retirement program through FY31 and no contribution in FY32 when the actuarial estimates show the plan at 100% funded.

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.

PROPERTY TAX REVENUE

As mentioned earlier, we used ad valorem property taxes as the plug to balance the budget for the forecast years of FY24 through FY32. Over the past 5 years, taxable value has increased by 38.6% an average of 8.44% per year. The taxable value increase for FY23 was 18.07%. Over the past five years from FY17 through FY22, the Town portion of the property tax bill for a $1,000,000 homesteaded property has decreased by $200. The total tax bill during the same 5-year period, including all taxing districts has increased $205 for a homestead property.

NON AD VALOREM TAXES

Forecast Summary Town of Palm Beach

FY2023

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:

LICENSE AND PERMIT REVENUE

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

The chart on the following page shows a record year for these revenue sources in 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.

INTERGOVERNMENTAL REVENUE

Forecast Summary Town of Palm Beach

FY2023

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.

The forecast for intergovernmental revenues has decreased slightly for FY24 based on revenues received from the State of Florida for sales tax and revenue sharing returning to more normalized levels. FY20 and FY21 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

Forecast Summary Town of Palm Beach

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

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.

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 FY22 and FY23 budgets and maintain the low investment income through FY24. The future forecast begins to increase investment income to lower than trend levels through 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.

FY2023

MISCELLANEOUS AND TRANSFERS

Forecast Summary Town of Palm Beach

FY2023

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

TOTAL GENERAL FUND EXPENDITURES

The 2022 forecast contains the FY23 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 and enhancements to crosswalks and traffic signals. In addition, the forecast reflects the expenditure increase assumptions outlined earlier in this section. The charts in this section include three years of actual data from 2019-2021 in dark blue, the FY22 budget in medium blue, the proposed FY23 budget in violet and the forecast through FY32 in light blue. The forecast reflects the transfer of the Building Permit related expenses to the new Building Enterprise Fund beginning in FY21.

SALARY AND WAGES

Forecast Summary Town of Palm Beach

FY2023

The forecasted salary and wage increases are based upon the employee pay policies and the actuarial assumptions for General, Police and Firefighters. 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 FY22 actual costs to be below the budget amount. For FY23, a COLA increase of 8.9% is included in the budget. The chart on the following page shows the forecast and past trends.

Vacancies have kept these costs stable in recent years. The average increase throughout the forecast period is 5.61% for total salary and wages.

FY2023

PENSION BENEFITS

Forecast Summary Town of Palm Beach

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 includes 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 except FY32 when, based on the actuarial estimates, the plan is at 100% funded.

The forecast reflects the Town’s Retirement Board recommended 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 decline over the 9-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 FY31, the funded ratio of the plan is estimated to be 99.1% in FY31 and 101% in FY32.

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 5.75% in FY24 and decrease to 4.54% in FY32. It is our expectation that the forecast for health increases is higher than what we will experience based on our experience in managing the plan. Other employee benefits (including FICA, longevity, incentives, and allowances) are expected to increase at a much lower rate.

CONTRACTUAL

Forecast Summary Town of Palm Beach

FY2023

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.

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.

EQUIPMENT REPLACEMENT/CAPITAL OUTLAY

Forecast Summary Town of Palm Beach

FY2023

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.

TRANSFERS

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.

Forecast Summary Town of Palm Beach

FY2023

• The spike in FY22 includes the transfer to the Capital Improvement Fund of $5,500,000 for the reconstruction of the North Fire-Rescue Station. A portion of the transfer ($1,500,000) is from an increase in taxes and the balance of $4 million is from General Fund reserves. The forecast assumes a 17.4% decrease in FY24 due to the one time transfer for the North Fire-Rescue Station, and a 5% increase through FY32. The increases are in anticipation of the need for increased funding in the Capital Improvement fund going forward for the pay-as-you-go program for capital improvement projects.

• The Town Council approved a 10-year $84 million Coastal Protection program in 2013. The first year funding in FY15 was approved at $4,777,000. The transfer increased to $8,015,220 in FY16 due to increased beach renourishment project costs. In FY21 the budget was reduced to the original

  $4,777,000 because of grant awards from FEMA, Federal and State agencies. The budget for FY23 includes a 7% increase and the forecast assumes a 10% increase per year in funding.

• The Debt Service Transfer for FY21 was reduced due to the refunding of the balance of the 2010A bonds and the 2013 bonds. The forecast includes the debt service on both the 2016 and 2019 bonds which are paid mostly from General Fund revenues.

• Risk insurance premium increases have been estimated as follows: Property Insurance 8% per year, Liability Insurance 2% per year, and Worker’s Compensation 3% per year throughout the forecast period.

• Retiree Health Insurance is based upon a forecast for Town Contributions prepared by the Town’s actuary. Due to the over funded status of this trust the transfer has been reduced to $331,217 in FY23. The actuary calculated the amounts in the forecast to keep the plan 100% funded if the investment return assumption is set at 5%.

• The General Fund contingency appropriation has been estimated to be 1% of the forecasted operating expenditures as required by Town policy. The General Fund contingency is funded through a transfer from fund balance rather than through operating revenues.

• The Town’s contribution to the Four Arts Library is forecasted to increase by CPI capped at 3% per

  year.

  
  

  

  
  

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  Fund Budget Overview Town of Palm Beach‌

  

  Trust Funds

  $26,509,567

  Internal Service Funds

  $15,984,672

  Enterprise Funds

  $24,078,095

  Capital Project Funds

  $67,580,840

  Debt Service Funds

  $7,285,739

  Underground Utility Fund

  $34,001,121

  General Fund

  $97,191,938

  FY2023 Operating Expenditures

  $272,631,972

  
  

  Worth Avenue Assessment

  $377,439

  Equipment Replacement Fund

  $2,915,079

  
  

  Building Fund

  $10,233,227

  
  

  Health Insurance Trust (OPEB)

  $2,722,638

  
  

  Health Insurance Fund

  $7,339,521

  
  

  Par 3 Fund

  $4,319,001

  
  

  Coastal Protection Fund

  $34,508,593

  
  

  2016B Revenue Bonds

  $723,513

  
  

  CIP PayGo Fund

  $32,694,808

  2016A and 2013 Revenue Bonds

  $6,562,226

  
  

  Employee Retirement Fund

  $23,786,929

  
  

  Risk Insurance Fund

  $5,730,072

  
  

  Marina Fund

  $9,525,867

  BREAKDOWN OF TOTAL OPERATING EXPENDITURES – ALL FUNDS

  FY2023

  
  

  
  

  

  
  

  Fund Budget Overview Town of Palm Beach

  

  Trust Funds

  $39,638,460

  Internal Service

  Funds

  $10,101,887

  Enterprise

  Funds

  $25,942,485

  Capital Project

  Funds

  $20,255,603

  Debt Service

  Funds

  $7,100,740

  Underground

  Utility Fund

  $15,966,016

  General Fund

  $93,762,438

  FY2023 Operating

  Revenues

  $212,767,629

  
  

  Worth Avenue Assessment

  $377,439

  Equipment Replacement Fund

  $2,320,297

  
  

  Building Fund

  $9,956,285

  
  

  Par 3 Fund

  $3,407,000

  Coastal Protection Fund

  $5,951,332

  Health Insurance Trust (OPEB)

  $3,431,217

  
  

  Health Insurance Fund

  $5,407,484

  2016B Revenue

  Bonds

  $723,513

  
  

  CIP PayGo Fund

  $13,926,832

  Employee Retirement Fund

  $36,207,243

  
  

  Risk Insurance Fund

  $2,374,106

  
  

  Marina Fund

  $12,579,200

  2016A and 2013 Revenue Bonds

  $6,377,227

  BREAKDOWN OF TOTAL OPERATING REVENUES – ALL FUNDS

  FY2023

  
  

  
  

  
  

  

  FY2023

  E

  Budget Summary by Fund Type Town of Palm Beach

  BUDGET SUMMARY BY FUND TYP‌

  
  

  
  

  FY 23 Budget Summary by Fund Type, Revenues and Expenditures General Special Debt Capital Enterprise Internal Trust & Totals Revenue Service Projects Service Agency
  Revenues
  Ad Valorem Taxes	65,419,700	-	-	-	-	-	-	65,419,700
  Non Ad Valorem Taxes	6,672,100	3,850,000	723,013	371,939	-	-	-	11,617,052
  Licenses and Permits	5,054,400	-	-	-	9,906,285	-	-	14,960,685
  Intergovernmental	1,137,500	-	-	1,500,000	-	-	-	2,637,500
  Charges for Services	7,823,200	-	-	-	15,909,700	7,452,781	-	31,185,681
  Fines and Forfeitures	943,200	-	-	-	40,000	-	-	983,200
  Contributions/Grants	43,500	8,500,000	-	2,212,763	-	-	14,307,243	25,063,506
  Gain/Loss on Investments	-	-	-	-	-	75,000	3,250,000	3,325,000
  Interest Earnings	213,217	100,000	500	847,100	50,000	300,000	16,325,000	17,835,817
  Miscellaneous	290,700	224,900	-	-	36,500	-	5,000	557,100
  Interfund Transfers	6,164,921	3,291,116	6,377,227	15,323,801	-	2,274,106	5,751,217	39,182,388
  Subtotal	93,762,438	15,966,016	7,100,740	20,255,603	25,942,485	10,101,887	39,638,460	212,767,629
  Appropriations from Fund Balance	3,429,500	18,035,105	184,999	47,325,237	1,188,943	5,882,785	-	76,046,569
  Total Revenues	97,191,938	34,001,121	7,285,739	67,580,840	27,131,428	15,984,672	39,638,460	$288,814,198
  Expenditures
  Salaries and Wages	31,365,775	143,804	-	139,302	2,751,508	225,693	185,316	34,811,398
  Employee Benefits	18,671,329	47,312	-	54,512	1,475,987	6,917,299	2,575,384	29,741,823
  Contractual	13,205,563	29,961,000	7,500	40,081,684	4,591,855	2,421,566	23,747,463	114,016,631
  Commodities	1,932,622	250	-	6,200	692,497	5,035	1,404	2,638,008
  Depreciation/Capital Outlay	2,509,665	-	-	25,054,672	2,469,309	2,415,079	-	32,448,725
  Debt Service	-	3,848,755	7,278,239	-	1,992,950	-	-	13,119,944
  Interfund Transfers	28,532,857	-	-	1,009,135	9,640,396	-	-	39,182,388
  Other	974,127	-	-	1,235,335	463,593	4,000,000	-	6,673,055
  Subtotal	97,191,938	34,001,121	7,285,739	67,580,840	24,078,095	15,984,672	26,509,567	272,631,972
  Transfer to Fund Balance/Retained Earnings	-	-	-	-	3,053,333	-	13,128,893	16,182,226
  Total Expenditures	97,191,938	34,001,121	7,285,739	67,580,840	27,131,428	15,984,672	39,638,460	288,814,198
  Financial Ratios
  	General	Special Revenue	Debt Service	Capital Projects	Enterprise	Internal Service	Trust & Agency	Total
  Ad Valorem Taxes as percentage of total fund budget	67.31%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	22.65%
  Ad Valorem Taxes per capita (9,245 population)	$7,076	$0	$0	$0	$0	$0	$0	$7,076
  Total expenditures per capita (9,245 population)	$10,513	$3,678	$788	$7,310	$2,935	$1,729	$4,288	$31,240
  Personnel as a percentage of the total budget	32.27%	0.42%	0.00%	0.21%	10.14%	1.41%	0.47%	12.05%
  Capital expenditures as percentage of total fund budget	2.58%	0.00%	0.00%	37.07%	9.10%	15.11%	0.00%	11.24%
  Capital expenditures per capita (9,245 population)	$271	$0	$0	$2,710	$267	$261	$0	$3,510

  Earnings

  6.2%

  11.2%

  Oth…

  Transfer to Fund

  PersonnelBalance/Retained

  Debt Service

  4.7%

  Interfund Transfers

  12.8%

  Employee Benefits

  10.1%

  4.4%

  0.8% Capital Outlay

  Commodities

  Contractual

  47.4%

  FY23 Budget by Expenditure Classification

  All Funds

  

  Sales and Use Taxes

  4.5%

  Intergovernmental Revenue

  Li1c.e7n%ses and Permits 3.8%

  Charges for Services 9.9%

  Fines and Forfeitures

  0.4%

  GaiCno/Lnotrsisbount…

  Investments

  1.6%

  0.3%

  Interfund Transfers

  11.9%

  Special Assessments 0.0%

  Miscellaneous

  Interest Earnings 7.3%

  21.5%

  Appropriations from

  Fund Balance 31.7%

  FY23 Budget by Revenue Type

  All Funds

  Ad Valorem Taxes

  FY2023

  Budget Summary by Fund Type Town of Palm Beach

  

  
  

  
  

  

  FY2023

  E

  Summary of Major Revenues by Fund Type Town of Palm Beach

  SUMMARY OF MAJOR REVENUES BY FUND TYP‌

  
  

  Description	FY2020 Actual	FY2021 Actual	FY2022 Budget	FY2022 Projected	FY2023 Budget	FY22 Budget to FY22 FY2021 Budget % % Variance of Total
  General Fund
  Ad Valorem Taxes	$56,817,697	$58,016,220	$59,663,700	$59,663,700	$65,419,700	9.65%	67.31%
  Sales and Use Taxes	6,367,325	6,452,853	6,710,500	6,625,377	6,672,100	-0.57%	6.86%
  Licenses and Permits	12,001,116	4,766,940	4,464,233	5,306,243	5,054,400	13.22%	5.20%
  Intergovernmental Revenue	1,948,606	2,033,204	1,121,700	1,231,191	1,181,000	5.29%	1.22%
  Charges for Services	5,648,637	7,172,386	6,172,500	7,728,132	7,823,200	26.74%	8.05%
  Fines and Forfeitures	780,976	918,509	1,025,500	958,833	943,200	-8.03%	0.97%
  Interest Earnings	696,608	109,289	359,811	(599,008)	213,217	-40.74%	0.22%
  Miscellaneous	479,154	499,518	454,500	401,371	290,700	-36.04%	0.30%
  Interfund Transfers	25,000	3,225,000	3,736,665	3,736,665	6,164,921	64.98%	6.34%
  Subtotal	84,765,119	83,193,918	83,709,109	85,052,504	93,762,438	12.01%	96.47%
  Appropriations from Fund Balance	0	0	5,431,464	0	3,429,500	-36.86%	3.53%
  Total General Fund	$84,765,119	$83,193,918	$89,140,573	$85,052,504	$97,191,938	9.03%	100.00%
  Special Revenue Funds
  Interest Earnings	810,606	89,953	255,009	75,000	100,000	-60.79%	0.29%
  Special Assessments	4,530,945	10,852,747	3,850,000	3,850,000	3,850,000	0.00%	11.32%
  Intergovernmental Revenue	0	0	0	0	8,500,000	100.00%	25.00%
  Miscellaneous Revenue	234,594	220,557	239,309	230,000	224,900	-6.02%	0.66%
  Donations	0	0	0	0	0	0.00%	0.00%
  Bond Proceeds	0	9,198,896	0	0	0	0.00%	0.00%
  Interfund Transfers	644,450	665,000	3,276,550	3,276,550	3,291,116	0.44%	9.68%
  Subtotal	6,220,594	21,027,153	7,620,868	7,431,550	15,966,016	109.50%	46.96%
  Appropriations from Fund Balance	0	0	45,387,986	23,233,899	18,035,105	-60.26%	53.04%
  Total Special Revenue Funds	$6,220,594	$21,027,153	$53,008,854	$30,665,449	$34,001,121	-35.86%	100.00%
  Debt Service Funds
  Interest Earnings	2,663	1,080	500	300	500	0.00%	0.01%
  Special Assessments	711,068	723,958	724,113	730,000	723,013	-0.15%	9.92%
  Bond Proceeds	53,499,266	0	0	0	0	0.00%	0.00%
  Interfund Transfers	6,727,833	6,399,142	6,376,777	6,376,677	6,377,227	0.01%	87.53%
  Subtotal	60,940,830	7,124,181	7,101,390	7,106,977	7,100,740	-0.01%	97.46%
  Appropriations from Fund Balance	0	0	185,000	185,000	184,999	0.00%	2.54%
  Total Debt Service Funds	$60,940,830	$7,124,181	$7,286,390	$7,291,977	$7,285,739	-0.01%	100.00%
  Capital Projects Funds
  Interest Earnings	1,516,789	(19,849)	875,391	0	847,100	-3.23%	1.25%
  Sales and Use Taxes	572,891	0	500,000	0	0	-100.00%	0.00%
  Donations	3,339,646	1,704,021	0	736,500	0	0.00%	0.00%
  Grants/Interlocal Revenue	1,085,655	10,111,913	3,212,763	8,841,717	3,712,763	15.56%	5.49%
  Special Assessment Revenue	270,316	269,096	429,727	0	371,939	-13.45%	0.55%
  Miscellaneous	0	0	0	0	0	0.00%	0.00%
  Interfund Transfers	9,940,211	8,562,108	14,212,737	13,348,510	15,323,801	7.82%	22.67%
  Subtotal	16,725,508	20,627,289	19,230,618	22,926,727	20,255,603	5.33%	29.97%
  Appropriations from Fund Balance	0	0	31,447,681	0	47,325,237	50.49%	70.03%
  Total Capital Projects Funds	$16,725,508	$20,627,289	$50,678,299	$22,926,727	$67,580,840	33.35%	100.00%

  
  

  

  FY2023

  Summary of Major Revenues by Fund Type Town of Palm Beach

  
  

  Description	FY2020 Actual	FY2020 Actual	FY2022 Budget	FY2021 Projected	FY2022 Budget	FY22 Budget to FY22 FY21 Budget % % Variance of Total
  Enterprise Funds
  Charges for Services	$5,219,169	$3,658,661	$12,254,326	$14,725,890	$15,909,700	29.83%	58.64%
  Licenses and Permits	$0	$10,693,279	$6,884,200	$8,866,091	$9,906,285	43.90%	36.51%
  Interest Earnings	267,615	37,657	24,935	10,000	50,000	100.52%	0.18%
  Fines and Forfeitures	0	47,951	15,000	54,603	40,000	0.00%	0.15%
  Grants/Interlocal/Donations	2,468,506	1,918,494	0	0	0	0.00%	0.00%
  Interfund Transfers	0	31,475	0	0	0	0.00%	0.00%
  Gain/(Loss) on Investments	0	(1,026,721)	0	0	0	0.00%	0.00%
  Miscellaneous	11,916	3,329	11,419	7,530	36,500	219.64%	0.13%
  Subtotal	7,967,206	15,364,125	19,189,880	23,664,114	25,942,485	35.19%	95.62%
  Appropriations from Retained Erngs.	0	0	690,850	0	1,188,943	72.10%	4.38%
  Total Enterprise Funds	$7,967,206	$15,364,125	$19,880,730	$23,664,114	$27,131,428	36.47%	100.00%
  Internal Service Funds
  Interest Earnings	$1,054,765	$ (9,112)	$315,000	$ (950,000)	$300,000	-4.76%	1.88%
  Gain/Loss on Investments	9,169	92,044	75,000	75,000	75,000	0.00%	0.47%
  Donations	0	0	0	100,000	0	0.00%	0.00%
  Miscellaneous	782,362	247,358	0	81,500	0	0.00%	0.00%
  Interfund Transfers	0	292,711	0			0.00%	0.00%
  Charges for Services	8,914,794	8,798,205	8,966,344	8,966,344	9,726,887	8.48%	60.85%
  Subtotal	10,761,090	9,421,206	9,356,344	8,272,844	10,101,887	7.97%	63.20%
  Appropriations from Retained Erngs.	0	0	4,791,802	2,188,573	5,882,785	22.77%	36.80%
  Total Internal Service Funds	$10,761,090	$9,421,206	$14,148,146	$10,461,417	$15,984,672	12.98%	100.00%
  Trust & Agency Funds
  Interest Earnings	1,477,906	42,373,666	18,500,000	3,675,000	16,425,000	-11.22%	41.44%
  Gain/Loss on Investments	14,486,276	15,347,218	4,300,000	-3,375,000	3,150,000	-26.74%	7.95%
  Miscellaneous	358,202	793,849	5,000	350,000	5,000	0.00%	0.01%
  Contributions	13,690,852	14,523,225	15,192,345	15,178,656	14,638,460	-3.65%	36.93%
  Interfund Transfers	5,420,000	5,420,000	5,420,000	5,420,000	5,420,000	0.00%	13.67%
  Subtotal	35,433,236	78,457,959	43,417,345	21,248,656	39,638,460	-8.70%	100.00%
  Appropriations from Fund Balance	0	0	0	1,510,082	0	0.00%	0.00%
  Total Trust & Agency Funds	$35,433,236	$78,457,959	$43,417,345	$22,758,738	$39,638,460	-8.70%	100.00%
  All Funds
  Ad Valorem Taxes	$56,817,697	$58,016,220	$59,663,700