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HomeMy WebLinkAboutMinutes_Workshop_07/15/1997U i Tf rvP ~ GP sA r 7 ~ \\ f ~ 0 A 4v ~qch co ~ VILLAGE OF TEQUESTA Post Office Bow 3273 3>? Tequesta llri~~e "1'equesei, Fknida 33'i69-U2%3 (~61) ~?~-62(X1 rax: (761) ~~~-6203 VILLAGE OF TEQUESTA VILLAGE COUNCIL WORKSHOP MEETING MINUTES JULY 15, 1997 n U I. CALL TO ORDER AND ROLL CALL The Tequesta Village Council held a special meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Tuesday, July 15, 1997. The meeting was called to order at 5:33 P.M. by Mayor Elizabeth A. Schauer. A roll call was taken by Betty Laur, Recording Secretary. Councilmembers present were: Mayor Elizabeth A. Schauer, Vice Mayor Carl C. Hansen, Alexander W. Cameron, and Joseph N. Capretta. Also in attendance were: Village Clerk Joann Manganiello and Department Heads. Councilmember Ron T. Mackail was absent from the meeting. II. APPROVAL OF AGENDA Vice Mayor Hansen made a motion to approve the Agenda as submitted. Councilmember Cameron seconded the motion. The vote on the motion was: Elizabeth A. Schauer - for Carl C. Hansen - for Alexander W. Cameron - for Joseph N. Capretta - for The motion was therefore passed and adopted and the Agenda was approved as submitted. Xec1'der! Paper • VILLAGE COUNCIL WORKSHOP MEETING MINUTES July 15, 1997 Page 2 ------------------------------------------ III. COMMUNICATIONS FROM CITIZENS (NON-AGENDA ITEMS) There were no communications from citizens. IV. REVIEW OF PROPOSED FY 1997-1998 BUDGETS A) Water Enterprise Fund B) Refuse & Recycling Fund C) Stormwater Utility Enterprise Fund Village Clerk Manganiello reviewed Water Enterprise Fund section of the Annual Budget and Financial Report for Fiscal Year 1998. Total operating expenses were down 4.10. Total operating expenditures for FY 1998 were expected to be $2,394,486. 1985 Series B Bond Indenture of Mortgage was paid off during 1996, making the Fund • debt free. The Water Department Capital Improvement Program had been updated to reflect the necessary projects to meet Tequesta's water resource acquisition needs. This plan entailED initiation of the construction of Tequesta's Reverse Osmosis (RO) facility, including effluent disposal, water treatment facility, and an additional well with associated piping. Proposed expenditures were $4,928,800 for all projects and capital equipment for FY 98. Revenue bonds were proposed to fund the reverse osmosis improvements, with the final decision on this to be made in September or October of 1997. This budget assumed the plant option cost of $7,460,000 as per Village Council direction. Anew Plant Operator Trainee was proposed to be hired to begin increasing manpower necessary to properly run the combined water plant operations upon initiation of the RO plant. The Village Clerk explained that the Finance and Administration Committee would meet on July 22 to discuss the RO facilities with the consulting engineers. Village Clerk Manganiello reviewed the Water Enterprise Fund Operations and Debt Service Fund Analysis as presented in the budget document, which included estimated revenues for FY 98 of $3,157,900, and estimated . operating expenditures for FY 98 of $2,394,486, or a decrease of 4.10. Revenues in excess of operating • VILLAGE COUNCIL oPORRSHOP FETING MINUTES July 15, 1997 Page 3 expenses were $763,414, with estimated debt service for FY 98 of $545,234, based on borrowing $7,460,000. Since that number had been established, recalculation of the amount needed to be borrowed for the RO plant had been done. Based on the new figure of $7,255,000 to be borrowed, with financing over 30 years at 5-1/20 interest, the debt service was estimated to be lowered to $485,000. Debt service ratio to operating revenue had been estimated at 1.40, but would increase due to the recalculated debt service--a benefit to the Village. Water Department Enterprise Fund Revenues were reviewed next. Fund total for FY 98 was $3,775,900. Vice Mayor Hansen questioned actual interest income in the amount of $212,437 for FY 96, to which Finance Director Kascavelis responded that was an inflated number which included income from surplus funds plus additional income on investments to refinance bonds. Finance Director • Kascavelis explained that this income had not been used in the operating budget. The Finance Director also explained that the proposed interest income estimated at $75,000 for FY 98 was interest income on funds available plus those anticipated to be available next year. Discussion ensued regarding earnings on defeased bonds. Councilmember Capretta questioned how much profit the Water Department would be making if no RO plant were built, to which Finance Director Kascavelis responded, $3 to $4 million. The amount budgeted for capital expenditures was reviewed. Finance Director Kascavelis explained that under IRS rules, borrowed funds must be used within two to three years. Water Department Director Tom Hall explained that the only water company projects coming up would be infrastructure, which would be financed by cash. Councilmember Capretta discussed the Jupiter water company's borrowing of huge amounts, which ended up running the town; and commented that anything the Village expected to do within the next three years should be included in the bond issue, since that would be the lowest interest rate available. Finance Director Kascavelis cautioned that the Village must be able to show revenues in excess of the debt service requirements for the bond issue--otherwise, water rates • would have to be increased. Councilmember Capretta commented that the Village should not have to worry about • VILLAGE COUNCIL gPORRSHOP MEETING MINUTES July 15, 1997 Page 4 any increase in water rates since the Water Department was almost debt free. Mr. Kascavelis explained that a due diligence study had been done by a consultant who was recommending an increase, which would be discussed at the meeting on July 22. Village Clerk Manganiello reviewed the Pumping and Storage of Water Utility Services, representing the costs of acquiring raw water, treating raw water to become potable, and storage of the treated water. Typical recurring expenses included well maintenance expenses, treatment chemicals, laboratory analysis costs and upkeep of storage tanks. Personnel costs were those required by Florida Administrative Code for Class B plant staffing. Six employees were proposed for FY 98 in anticipation of hiring a new RO plant trainee. Total anticipated funding for FY 98 was $1,358,777. • The Village Clerk explained that Distribution of Water Utility Services included all costs associated with the provision and maintenance of the distribution network of pipes, mains, valves, hydrants and meters from the various water storage facilities to the customer's meter, and that the total budgeted for this activity for FY 98 was $328,148. The amount for Personnel Services was down from the prior year due to a reduction in health insurance rates and employees who had topped out in salaries. Village Clerk Manganiello next reviewed Administration of Water Utility Services, which provides for administration and general supervision of all Water Department operations including planning, organizing, developing, staffing, controlling, recording, budgeting, and training. Also included were all costs of providing utility billing services, data processing and customer service. Total operating expenses anticipated for these activities for FY 98 were $2,394,486, a 4.1o reduction from the prior year. Councilmember Capretta discussed the cost of water sources, including groundwater, water from Jupiter, and RO water. Vice Mayor Hansen reported that he learned during a visit to the Jupiter Water Plant • that the amounts they used from shallow wells and from RO varied, but that they tried to utilize as much surface • VILLAGE COUNCIL ~PORRSHOP FETING MINUTES July 15, 1997 Page 5 water as possible, and that the amount of RO water varied from 12% to 20o. Water Department Director Hall verified that Tequesta would use the same concept, and commented that Jupiter's RO capacity was 9 million gallons per day while they only pumped approximately 2 million gallons per day from that source. Village Clerk Manganiello reviewed the Debt Service for Water Utility Services, which represented the debt service payments for the Series `97 Water Revenue Bonds issued in the amount of $7,460,000, for which principal and interest totaled $545,234. Ms. Manganiello explained that as previously mentioned, the recalculated bond amount was $7,255,000, which would cause a reduction in the annual debt service figure. Capital Outlay Expenditures were reviewed. The total capital outlay proposed for FY 98 was $4,928,800. Councilmember Capretta commented that the Village was going to build a • $7-1/2 million RO plant but was only installing one operating unit, and that if the Village got out of the Jupiter contract or ran out of water from shallow wells that additional units could be added, which put the Village in a good position for the next ten years or so. Water Department Manager Hall commented that more and more water quality requirements were being imposed on the Village and that those would be handled at the new RO facility. Mr. Hall explained that without the RO plant, the Village would have to build a $3 or $4 million facility just to take care of water quality measures. Village Clerk Manganiello reviewed the Non-Operating Expenditures for Water Services, for which the total proposed for FY 98 was $3,164,720. Discussion ensued regarding the recent newspaper article about forcing people to use reclaimed water and a similar situation which had occurred in Cape Coral, Florida. Discussion of inter-fund transfers followed. It was pointed out that the Water Department would participate in the cost of a new Village Hall. This concluded the review of the Water Enterprise Fund Budget for FY 98. The Village Clerk reviewed the Refuse and Recycling • Enterprise Fund, stating that the cost of solid waste collection services would rise 2.Oo effective October 1, VILLAGE COUNCIL WORKSHOP MEETING MIN[JTES July 15, 1997 Page 6 1997, per the franchise agreement with Nichols Sanitation. These costs were shown as a non-ad valorem assessment on the property tax bill. The new rates would be $146.28 for single family homes and $113.16 for multi- family homes. A 4o discount could be realized by the property owner if paid before December 1st. The service included the cost of collection of refuse, recycling, and yard waste. Commercial properties were billed direct by Nichols with fees dependent on size of dumpsters, frequency of pick-up, and other factors. Solid waste disposal fees were assessed separately for all properties by the Solid Waste Authority of Palm Beach County, which also appeared on the tax bill. Village Clerk Manganiello reviewed the Fund Analysis for the Refuse and Recycling Enterprise Fund for which the estimated fund balance at 9/30/98 was $9,739. In response to Councilmember Capretta's question regarding how long the present contract had to run, Ms. Manganiello responded that • expiration was September 30, 1999. Councilmember Capretta commented that the Village needed to make sure they got cash from every franchise agreement signed. Proposed FY 98 Total Revenue for the Garbage Solid Waste Disposal Fund was $337,750, and Total Operating Expenses were $333,180. Village Clerk Manganiello reviewed the Stormwater Enterprise Fund, which was created to account for the expenditures and revenues of the Stormwater Utility. The Utility became operational on October 1, 1996, to provide a means for addressing required mandates concerning water quality {NPDES) associated with stormwater runoff and flood control. The proposed annual assessment was $5.63 per equivalent residential unit, a loo increase as recommended by the Stormwater Utility Board. The total expenditure budget was $239,255, with revenues of $220,300. Revenues did not reflect a $39,300 General Fund subsidy requested by the Village Council which would be provided by a FY 1997 Budget revision. The major capital projects proposed were the Tequesta Drive Drainage Diversion Project ($54,000) and the Tequesta Stormwater Utility Drainage Study to determine system- wide levels of service ($15,000). The Tequesta Drive • Project was anticipated to receive a $121,717 Community Development Block Grant. Village Clerk Manganiello • VILLAGE COUNCIL WORKSHOP MEETING bIINUTES July 15, 1997 Page 7 reviewed the Fund Analysis for Fiscal Year 1998 Stormwater Utility Enterprise Fund, which showed an estimated fund balance as of 9/30/98 of $20,465. Village Clerk Manganiello explained that the Public Works Stormwater Drainage/Flood Control Fund was established to account for non-ad valorem assessment revenues and expenditures for Stormwater drainage system maintenance, drainage improvements, and to provide required governmental mandates concerning water quality (NPDES) associated with Stormwater run-off and flood control. The employee number of one for this department was actually half of the services of two separate employees. Total revenue for FY 98 was $220,300, while total expenditures were $239,255. The Village's Proposed 10- Year Capital Improvement Program was briefly discussed. Vice Mayor Hansen commented that at the last Village • Council meeting the possibility of budgeting funds for annexation had been discussed. Village Clerk Manganiello explained that $4,000 had been budgeted for elections in the Village Clerk's budget, which was $2,000 more than usual in anticipation of a possible annexation referendum. Also, $1,000 had been budgeted in the prior year, which had been carried forward to cover any preliminary annexation work. Finance Director Kascavelis commented that Vice Mayor Hansen had requested information regarding the impact that a 2-1/2o millage increase would have on the Village residents. Mr. Kascavelis reported that for a $140,000 home, the current tax bill was $743.97, which would be increased by $18.59. Taxes on a home valued at $125,000 would increase $16.17. Village Clerk Manganiello advised that a Public Hearing on the budget would be held in September, 1997. V . ADJOURNMENT • Councilmember Cameron moved that the meeting be adjourned. • VILLAGE COUNCIL WORKSHOP MEETING MINUTES July 15, 1997 Page 8 Vice Mayor Hansen seconded the motion. was: Elizabeth A. Schauer - for Carl C. Hansen - for Alexander W. Cameron - for Joseph N. Capretta - for The vote on the motion The motion was therefore passed and adopted and the meeting was adjourned at 6:34 P.M. Respectfully submitted, • Betty Laur Recording Secretary ATTEST: J ann Manganiel o Village Clerk DATE APPROVED: G~.~ ~~, 1997