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07-21-2022 VC BWS-MMINUTES OF THE BUDGET WORKSHOP SESSION VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA C JULY 219 2022 Present: Deborah Searcy, Mayor Susan Bickel, President Pro Tem Darryl C. Aubrey, Sc.D., Councilmember Mark Mullinix, Councilmember Andrew D. Lukasik, Village Manager Leonard G. Rubin, Village Attorney Jessica Green, Village Clerk Absent: David B. Norris, Vice Mayor ROLL CAT,T, Mayor Searcy called the meeting to order at 7:00 p.m. All members of Council were present except Vice Mayor Norris. All members of staff were present. All Department Directors were present. Mr. Lukasik explained he would be providing a cursory overview, and staff would provide a more detailed workshop in the future. He noted there was still opportunity to make decisions and tailor the budget to the Village's needs. FY 2023 BUDGET HIGHLIGHTS Cv-nernl Fund • Millage rate: 7.05 (no increase over FY 2022) o General Fund Budget increased $2.6 million or 9.8% to $29.2 million o Ad Valorem Revenue increased $2.2 million or 12.75% to $19.8 million • General Fund CIP Transfer: $679,800 • Country Club Transfer: $482,550 • Contingency: $75,000 Stormwater Utility Fund • Stormwater Utility Fund non -ad valorem assessment totals approximately $500,000. o $7.78 per month or $93.36 per year for each Equivalent Residential Unit (ERU). ■ Each ERU equals up to 5,550 square feet. ■ Most single-family residents will pay $90.11 per year Country Club • Country Club Budget is balanced with: o $382,550 transfer from General Fund for Pool and Tennis Operations o $74,000 transfer from General Fund for Clubhouse renewal and replacement fund o $26,000 transfer for Administrative/Grounds o $100,000 contribution from Golf for Clubhouse renewal and replacement fund o $590,000 from Golf to support overall Clubhouse operations, recommend be applied toward Golf's Clubhouse debt Village Council Budget Workshop Session held July 21, 2022 Page 2 of 7 Mr. Lukasik reviewed high-level budgetary notes from each area, noting Council may want to review the recommendation to apply the Golf contribution to Clubhouse operations toward Golf's Clubhouse debt and make a policy determination. FY 2023 PRELIMINARY BUDGET SUMMARY — GENERAL FUND • Millage rate: 7.05 • Personnel: $18,162,562 • Operating: $7,921,901 • Debt Service: $1,894,097 • Capital Outlay: $20,000 • General Fund CIP Transfer: $679,800 • Contingency/Reserve: $75,000 • Transfer to Club: $482,550 • Total Budget: $29,235,910 • Personnel: o General Fund: Full -Time 142, Part -Time 53 o Country Club: Full -Time 12, Part -Time 57 o Total: Full -Time 154, Part -Time 110 Mr. Lukasik explained the budget provided for capital improvements, replacement of essential equipment and vehicles, employee salary and benefit cost increases, and maintains and/or enhances the Village's level of service. PERSONNEL COST HIGHLIGHTS Mr. Lukasik discussed the FY 2023 personnel costs as proposed, including: • Total Personnel Costs - $20,553,094 (an increase of $1,752,380 or 9.32% over FY 2022) o Payroll - $14,819,576 (72.10%) o Health Insurance - $2,3 65,18 8 (11.51%) o Pension - $1,840,230 (8.95%) o Payroll Taxes - $1,111,517 (5.41%) o Workers Comp Insurance $348,430 (1.70%) o Life & LTD Insurance - $68,153 (0.33%) • 154 Full -Time Positions (an increase of four over FY 2022) • 110 Part -Time Positions (an increase of one over FY 2022) Mr. Lukasik explained the approach taken to budgeting personnel was not as conservative as in past years, with additional consideration toward cost savings of open positions. Brief discussion ensued regarding the assumptions. Mr. Lukasik reviewed the personnel highlights, including: • One new Police Officer • Replacing a part-time Human Resources Specialist with a full-time Human Resources Specialist — Talent Management • Replacing a part-time Administrative Assistant in Fire Rescue with a full-time Administrative Coordinator • Replacing a part-time Administrative Assistant with a part-time Recreation Assistant Village Council Budget Workshop Session held July 21, 2022 Page 3 of 7 PERSONNEL COST HIGHLIGHTS continued • Adding an additional part-time Park Ranger • Full-time Shop Attendant replacing part-time attendants in Golf • Full-time Head Pool Lifeguard replacing part-time lifeguards Mr. Lukasik explained Police Chief Jenkins had recommended no less than two (2) new Police Officers, with a preference of four (4), to maintain current level of service, including traffic saturation and concierge services residents were accustomed to. Councilmember Mullinix discussed resident concerns with safety and stated he thought it was important to find room in the budget to accommodate the Chief's requests. Salary range adjustment o PBA/IAFF step plan increases (as negotiated): ■ Base wage increase: 4% ■ Step increase: 3.5% o FPE (in negotiation): ■ Merit increase: 4% (estimate) o Non-union: ■ Pay study implementation: 8% increase ■ Merit increase: 4% (estimate — proposed to increase max to 6%) ■ No merit increases for part-time Tennis Instructors recommended • Health insurance: 0 13% increase o No change to carrier/coverage o No change to Village's contribution to Health Savings Accounts ($1,500/$3,000) • Workers' Compensation: 10% increase • Pension Contribution o ICMA:15% o Police and Fire Pension: 12% o General Employee Pension: 15% Mr. Lukasik provided a brief history on the payment of Tennis Instructors and explained challenges with keeping the program financially sustainable. He noted the Village is near the top end on payment of its pros as compared to other programs in the area. Mr. Lukasik explained a change in the way part-time employees are contemplated in the budget in order to match operations. Discussion ensued regarding wage increases, associated analysis, and the status of the market. DEBT SERVICE Mr. Lukasik reviewed the budgeted Debt Service, including: • Vehicle Lease - $600,000 (General Fund) • Clubhouse Loans - $1,294,097 (General Fund) ( • Initial Golf Course Loan - $398,159 (Country Club) `�- 2018 Golf Course Restoration - $35,530 (Country Club) o Total - $2,327,786 o General Fund Total - $1,894,097 o Country Club Total - $433,689 Village Council Budget Workshop Session held July 21, 2022 Page 4 of 7 FY 2023 BUDGET HIGHLIGHTS — COUNTRY CLUB • Golf o Assume same volume of activity (47,500 rounds) o Capital investments include pond stabilization and wash plant ($450,000) • Pool and Tennis o Part-time employees budgeting based upon coverage/hours needed, not positions o Full-time Head Life Guard in lieu of some part-time hours o Tennis Instructors — recommend policy change to exempt from merit pay process • Renewal and Replacement Funding o Golf. $100,000 o General Fund: $74,000 o Food and Beverage: $0 FY 2023 PRELIMINARY BUDGET SUMMARY — COUNTRY CLUB Category FY 2023 FY 2022 Budget % Increase/ $ Increase/ Bum ecrease ecrease Golf Fees $3,300,000 $2,510,000 31% $790,000 Golf Shop revenues $668,000 $462500 44% $205,000 Driving Range revenues $477,600 $375,000 27% $10200 Pool revenues $15300 $11700 31% $36,000 GF Transfer revenues $482550 $378550 27% $104,000 Total Revenue $7,3149880 $690969069 20% $192189811 Personnel Costs $2,390532 $2,043420 17% $347,112 Capital Outlay $508,000 $20000 154% $30800 Reserves $17400 $100,000 74% $7400 Total Expenses $793149880 $690969069 20% $192189811 Mr. Lukasik continued with a breakdown of Country Club revenues and expenses budgeted, reviewing expenses by both function and department. Mr. Lukasik reviewed highlights of the Golf operations budget as follows: • Operating and Repair and Maintenance Increases o Fertilization — Brightview contract increasing by $100,000 o Shop Merchandise — increasing $125,000 o Concrete Repairs — increasing $35,000 • Add a Shop Attendant • Golf Revenue to balance Pool and Tennis budgets, recommend accounting for this transfer to offset Clubhouse debt liability to General Fund • Increase in Capital Funding from $200,000 to $450,000 Discussion ensued regarding Golf fees and providing direction to the Golf Advisory Board as to what Council wanted the fees to cover, how competitive the fees should be, past Council direction associated with the fees, and the revenue from members versus non-members. Councilmember Mullinix commented on the mark-up in the Golf shop, asserting it should be reviewed as a profit center. Village Council Budget Workshop Session held July 21, 2022 Page 5 of 7 FY 2023 PRELIMINARY BUDGET SUMMARY — COUNTRY CLUB continued Mayor Searcy noted the pool should also be selling merchandise such as towels and goggles. Mr. Lukasik reviewed highlights of the Country Club Administrative, Pool, and Tennis operations budget as follows: • Reclass Administrative Coordinator to Executive Assistant due to level of responsibility • Reclass full-time Accounting Clerk to full-time Accountant • Increase landscape expense to $250,000 • Umbrellas and Chairs: $20,000 • Lighting for employee parking path: $25,000 • Tennis ice machine: $8,000 • Inflatable slide or audio system: $20,000 Mr. Lukasik reviewed provided a preliminary summary of the Country Club budget by profit center and discussed proposed Golf Membership Fees and Golf Walk -In Rates, followed by a review of proposed Pool and Tennis Fees. Discussion ensued regarding the proposal to increase pool fees and making the fees an even number with tax. FY 2023 BUDGET HIGHLIGHTS — GENERAL FUND Mr. Lukasik discussed highlights of the General Fund, as follows: • Overall increase in the operating budget is $2.6 million, or 9.8% • Ad Valorem revenues based on a 7.05% Millage Rate o Nearly $2.2 million in additional Ad Valorem revenue (12.75% increase) o License and Permits, and Intergovernmental Revenues are budgeted to increase by more than 10% • Debt increased due to additional vehicle leases • Transfer to Capital Improvement Fund (CIP) increased 3% • Transfer to Country Club increased to $482,550 overall, but decreased for Renewal and Replacement to $74,000 Mr. Lukasik explained that overall, there was a slight increase in staffing levels, however personnel expenses were budgeted to increase by 9% due to salary adjustments and benefit cost escalation. Mr. Lukasik explained additional highlights by department as follows: Public Works • Continue with leadership positions restructured slightly: Field Operations Manager and Facilities Manager • Continue with the part-time Facilities Maintenance position • Reclass a Street Maintenance Worker position to Street Foreman • Increasing landscape maintenance costs by 10% to $962,000 • Miscellaneous increases in SWA fees, diesel, and dumpster replacement Village Council Budget Workshop Session held July 21, 2022 FY 2023 BUDGET HIGHLIGHTS — GENERAL FUND continued Internal Services Page 6 of 7 • Reclass full-time Accountant to full-time Senior Accountant (Finance) • Reclass full-time Accounting Clerk to full-time Accounting Analyst (Finance) • Convert part-time Human Resources Specialist to a full-time position (HR) • Administrative Assistant to Help Desk (IT) • Part-time Functional Manager (existing) funded to assist with Business Development and Facilities projects (VM Office) Parks and Recreation • Master Plan for Osbourne and Community Center: $60,000 • Athletic Field Maintenance: $200,000 • Building and Grounds Maintenance: increase from $60,000 to $220,000 • Fencing at Community Center • Playground Maintenance (equipment outside scope) • Park Staffing — supervisor with two (2) assistants all day • Replace part-time Administrative Assistant with a part-time Recreation Assistant • Add a part-time Recreation Assistant Community Development • Convert a part-time Administrative Assistant to a part-time Permit Tech • Convert a Building Inspector position to a Senior Building Inspector Mr. Lukasik stated the budget did not include funding the need for an additional Code Officer to serve as supervisor. He noted the department was functioning as well as it could without that additional person in place. Police • Add one (1) Police Officer with equipment for new officer and vehicle FY 2023 PRELIMINARY BUDGET SUMMARY — GENERAL FUND Category FY 2023 Budget FY 2022 Budget % Increase/ $ Increase/ (Decrease) Decrcasc Ad -Valorem Taxes $19,860,848 $17,615,577 12.75% $2,245,271 Total Revenue $2992359910 $2696289407 9.79% $296079503 Public Safety $11,963,978 $10,517,083 13.76% $1,44605 Leisure Services $2039594 $29351,797 23.04% $541,797 Transfers Out $1,1629350 $1,038,550 11.92% $12300 Total Expenses $2992359910 $2696289407 9.79% $296079503 Mr. Lukasik continued with a breakdown of General Fund revenues and expenditures budgeted, reviewing expenses by both function and department. Discussion ensued regarding whether the Village should focus on diversification of revenue to become less reliant on ad -valorem taxes. Village Council Budget Workshop Session held July 21, 2022 Page 7 of 7 STRATEGIC PRIORITIES AND PROJECTS Mr. Lukasik shared a color -coded list of the Village's Strategic Priorities and Projects, noting those planned and in process, and discussing the 2023 Capital Outlay by source and the cash flow summary for the Capital Improvement Plan through 2027. He noted the list included priorities identified by each of the Councilmembers. FY 2023 TAXABLE VALUE AND MILLAGE SELECTION • Millage Rate: $7.05 mils (no increase over FY 2022) • Gross Taxable Value: $2,965,4121,110 ($341,967,249 or 13.04% increase over FY 2022) • Budgeted Ad Valorem: $19,860,848 ($2,245,271 or 12.53% increase over FY 2022) Mr. Lukasik outlined the Village's taxable value growth in comparison to nearby communities. He explained the Village Manager's proposed Millage Rate was 7.05 mills, setting the maximum millage rate allowed for the Village. He discussed alternate options and noted the adoption was tentative and Council could reduce the rate for the final adopted budget and discussion ensued on the process for adoption. Mayor Searcy shared that residents had asked her to discuss grant assistance opportunities, rent increase restrictions, and renovation programs as part of the budget review. Discussion ensued. Mr. Lukasik noted direction was needed as to how to move forward with employee health coverage. Discussion ensued. Eric Gehring with Gehring Group provided detail on the Village's healthcare plan and provided brief feedback on the plans offered by other communities. NEXT BUDGET WORKSHOP The next Budget Workshop Session will be held Wednesday, August 10, 2022. ADJOURNMENT With no further business to come before the Council, the meeting was adjourned at 8:57 p.m. Jes 'ca Green, MMC, Village Clerk