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Here’s The Scoop …The April 27, 2011 Lauderdale-By-The-Sea Commission Meeting … Looking At A Mid-Year Budget “Holistically” … #2 …

April 29, 2011 by Barbara

“THE BOTTOM LINE IS THAT THE BUDGET’S PRETTY MUCH RIGHT ON TARGET WHEN YOU LOOK AT IT HOLISTICALLY” ..TM Connie Hoffmann 4/27/11

‘The word “holistic” is identified as meaning looking at something as a whole, rather than in separate parts’

Dear Readers …the mid-year budget report was made with a power-point presentation by soon to be former Acting Finance Director Doug Haag …(more about this in the TM monthly report  in the next post )…  The Commissioners and the residents were not privy to the report prior to this presentation due to the report being finished the afternoon of this meeting according to TM Hoffmann…This writer was surprised VM Dodd did not take issue with that and cannot fathom why after being given a choice of the regular presentation Haag said would take 30 minutes to present chose the 10 minute abbreviated version only to approve it without having the time to look through it thoroughly… It should have been accepted and the approval should have been tabled until they had the time to see whether they approved it or not… The motion to approve was made by the VM and seconded by Comm.Clottey…It passed 5-0 … Mr Haag after reiterating what the Town Manager said about not finishing until that afternoon and offering up the choice of versions …was advised by the TM to do the condensed version and if anyone had any questions it would be expanded on..which occurred … Mr Haag started with the General Fund Summary and said everything seems to be on track …He spoke of the revenues for communications tax being $30,000 lower than it should be and it would be looked into…He stated revenues for building permits being $19,000 down as well while miscellaneous revenues are up $5,000 due to lien search fees and insurance refunds…The General Fund expenditures “should be $100,000 below budget barring anything unforeseen issues between now and Sept. 30th”..The Power-point stated “Which will more than offset the projected revenue shortfall … The Parking Transfer Fund is running pretty tight according to Haag and he said they would talk transfer from Parking Fund to the General Fund later or could stop and address it..The TM spoke about the ad valorem and the record number of appeals on properties …They just now received 2009 figures from the property appraiser which amounted to $84,000 deducted from our ad valorem taxes this year and late last year and they are now doing the 2010 appeals which will amount to more deductions to come for what we can collect…She went on  state the Town is allowed to only budget to 95% on potential revenues and that is what keeps us from experiencing a problem when those appeals are granted… Mr. Haag stated that General Fund revenues were just about the same this year as last at the mid-year point 73% this yr vs 75% last year… The total General Fund budget is about $10.1 million … He asked for any questions on the General Fund and received no response from the Commission…

The Police Forfeiture Fund had some good news in picking up an additional $9,600 and has a budgeted amount of $37,000 of which the Chief  will be requesting $28,900 per New Business agenda item 17a  for 2 security cameras and a traffic citation writing machine …He added in summary the LETF has a $200,000 balance right now…

The Sewer Fund Mr Haag stated “This gets a little bit more complicated. It’s been a big discussion for several months”…He went on to say “where we stand  at this point …at the mid point of the year is at the break even point”…He said it was due to the $81,400 credit issued from Pompano Beach to the Town for the SRClub mistakes (SRClub was charged from the time it was finished with construction as a commercial property rather than a residential one…statute of limitations only allowed the Town to recoup 4 yrs. or billing errors and the Comm. previously voted to retain that credit due to the Town paying over and beyond what the actual charges should have been to SRC for many years due to a behind the doors decision made by a select few that came to light with this new administration/commission..prev. posts)… He continued on to say from a revenue standpoint we are just now starting to see the impact of the rate increase passed and collections that began with the March 2011 billing..monitoring that increase will continue going forward…He also stated we no longer have revenues from SRC as part of the revenue stream ..(VM Dodd spoke about this later on…I believe Mr Haag’s point was that interest we may have received for however long the Town held onto the SRC monies after Fort Lauderdale dispersed them to the Town before the Town turned them plus whatever additional monies were added to pay the Pompano Beach bill)… He went on to say on the expenditure side that $81,400 credit was reflected as an expenditure because it was credited to our Master Sewer acct. with Pompano Beach….He added that the Commission made the decision that SRC would now be billed directly from Pompano Beach …(should have begun this month) …He said the increase in the Master Sewer rate came in as projected and added that the TM and Asst. TM were “pretty prophetic” in what they planned for 15% as the fixed charge came in at 13% /volume charge 14%… He said the “Good news” was “all things taken into consideration in terms of the eventual impact of rate increase revenues still should exceed budget”…He said that should meet the Commissioners goal to build or rebuild some of those reserves for future capital repairs and /or replacement…The Town Manager chimed in to say the reason the revenue will exceed budget is due to last summers decision to budget a small amount to come in from the rate increase as well as the Commissions decision to do the rate increase “in one fell swoop” …She said we will see more revenue and that will build up the reserve to do repairs and replacement ..No dollar amount was shown or asked about as well as no discussion on where we are as far as knowing the full extent of  what will be required and when .. (such as full replacement of sewers and/or relining existing sewers…something that this writer thinks was lost due to the Master Plan revision morphing into a full-out redevelopment of the Town…far more than preserving and enhancing) …

The Fire Fund Mr Haag said was also tracking close to what it had the previous year  with 86.2% this yr vs 87% last year in revenues… The expenditures are below budget because they have not made any transfers yet for vehicle /equipment reserve (power-point said they are budgeted at $47,000) but 50% of it will be done in April (this meeting was held on April 27th) with the remainder in late summer which is typical…At this point Haag stated they did not anticipate any problems …

The Parking Fund … Mr Haag said “Near and dear to all of us” ..(Hmmm… all of whom?) … He said there was “alot going on here”… This fund’s current year and last year were “very, very close”.. “The one glaring exception is on the parking fines due to a delay in the payment process” with the California vendor…He said they were trying to schedule a conference call with them to find out why there have been so many delays in getting the monies in… The TM quickly added that we know thew amount they owe us and we’ll be fine with that amount of revenue coming in… Haag concurred and went on to talk of the number of changes made including reprogramming the business district meters to be $1.25 and hr. from $1  which will generate $25,000 this year …He said we actually budgeted $67,000 and that will come from a combination of revenue streams …the business district meter rate increases…and tonight’s agenda item to increase other rates bringing in an additional $22,000 in revenues as well as the pay stations now being used which have brought other towns 20-30% revenue increases …We have conservatively estimated a 10% increase from them for the balance of the fiscal year to bring in $23,000 in revenues…He said expenditures would be a little bit under at this point but overall revenues should be very close or maybe a little bit over budget… maybe even $10,000 over … Next up was the Parking Fund Transfer portion of the equation not discussed during the General Fund Summary …On this point Mr. Haag said it was up to the Commission to decide whether to make the full transfer into the General Fund from the Parking Fund …Not doing so would build up the parking reserves and to some extent this would be an option barring any issues arising in the General Fund this summer that would necessitate that transfer going through as it has in the past… The TM said the full amount budgeted for the transfer was $200,000 and if they could keep expenses below what was budgeted in the General Fund that money could be used for improvements such as more pay stations and parking lot configurations that they think need to be done to make them more efficient…

The Mayor acknowledged Comm. Sasser who asked Mr. Haag to go back to bullet points concerning the reprogramming and the adopted increases on the agenda and confirm they were both for a combined revenue for this fiscal year..Haag confirmed they were  and the TM added they were as well explaining that some meters in town were never reprogrammed for the rate increase which were included in the bullets he was referring to… Comm. Sasser asked about a parking lot loan and if he was correct we had one and if it was shown and where it was in the expenditures of the Parking Fund …Haag said he was correct …we do have a parking lot loan and it is shown in expenditures…He stated we pay it quarterly and the last payment to SunTrust Bank was made March 30th 2011 for approx. $47,000 in principal and interest…Comm. Sasser wanted to know how much we own on the loan and the TM stated she had just looked into this due to it coming up before…She said not to hold her to it but it was approx. $1.4 million …Haag thought $1.5 million … The TM added it did have a pre-penalty attached (another Colon pre-penalty loan debacle) …of $102,000 adding that we would cover that with the interest savings over a 2 year period but she said “the issue of whether that’s a smart thing to do right now or not I think is a different discussion and we can have that tonight”… Comm. Sasser said he would like to have it… The Mayor tried to cut him off (seems to be a bad habit of hers these days)…Comm. Sasser said he would yield in a minute and asked what bank the loan was with the TM responded SunTrust…Hearing that Comm. Sasser asked if we had other accounts in SunTrust to which Mr. Haag responded we do…Comm.Sasser said we could then renegotiate or try to renegotiate with them (shades of the last Comm. and no negotiations made by the former TM with SunTrust on the last loan we repaid) … assuming direction to repay the loan is made … Comm. Sasser stated he would ask…The Town Manager said if that decision was made to pay off the loan they could certainly ask… Comm. Sasser said we have the money to pay it off so the discussion should take place … The TM asked if the discussion should be at the Roundtable or now and Comm. Sasser said either and it was up to the Mayor… The Mayor cut in without Comm. Sasser yielding and before the Vice Mayor who was next spoke …She asked as a point of information if this was a proprietary fund and if that was correct were the payments of this loan coming from the revenues in the parking fund …Before an answer was given the Mayor added they were not “anything from ad valorem taxes comes from or goes to. The parking fund subsidizes the paybacks of that loan is that correct Mr. Haag?’…Mr. Haag first responded correct but quickly added “it’s not a subsidy because it’s a valid parking fund expense so it’s paid from parking revenues.”… The Mayor said “It’s all the payments, the revenues from the parking fund go pay off the parking loan and the interest.”…Haag again said correct..Mayor Minnet said “There isn’t any other taxpayer”…Haag interjected “There is no taxpayer subsidy per say.”..Town Manager Hoffmann injected “It’s not taxpayer money, it’s parking revenue.”… The Mayor said “So if we decide to pay that off do we have the money within the parking fund to pay off that loan?”…The TM was emphatic in her reply “No!”… The Mayor reiterated “No, so where would we get the  money to pay off the loan. We do have it but how would we, would we have to borrow that? How would we do that?”… Mr. Haag said we could borrow it and said there were a couple of different options … he said “Obviously there’s funds available.”…He said the General Fund or possibly the Capital Fund…The TM said it would be “inappropriate fro m the Capital fund though”…The Mayor said “That’s my question. Can we borrow from that capital or General Fund to pay off a proprietary fund such as the parking fund?”..Mr Haag responded “If the Commission so desired it would be possible to borrow from the General Fund.”…The Mayor “But currently the parking fund is able to pay the interest and the money generated and show a positive cash flow, correct?”… Mr Haag again responded correct and added that up to this point the fund was able to transfer additional funds into the General Fund…The Mayor replied “Great! Ok.”… Comm. Sasser asked if he still had the floor… The Mayor did apologize thinking he had yielded…or so she said… Comm. Sasser stated while he understood we are paying for it out of the parking fund we are moving funds out of the parking fund into the General Fund for use in the General Fund…He asked for verification from Mr. Haag… and seeing he had it he continued on to state if we paid off the loan an no longer had that debt service in the parking fund then we would have more funds available to move to the General Fund if we wanted to …Mr. Haag agreed that was a fair assessment and said “In fact that money could then go to repay the loan, the payoff  amount that was subsidized through the General Fund.”… Comm. Sasser finished up by saying “So we would have more money in the General Fund if we wanted to have it.” and then he yielded … Mr Haag  did throw into the mix that in today’s market it is very, very, very difficult for municipalities to borrow money in any way, shape or form and it was something to be considered in terms of a business analysis and if somewhere down the line we wanted to borrow it could be problematic…(This writer would like some research done on municipalities with no debt and surplus cash reserves before taking this one to the bank and not paying off the last debt we have…pun intended) … Vice Mayor Dodd took his bite at the apple to discuss the LETF portion and inform all that according to state statutes 15% of the total LETF must be used in any given year and if we have $200,000 we are under the required use…He told the Chief of the BSO to add onto his request for the year… It was at this point he told Mr. Haag of the problem he had with the SRC analogy of being a revenue stream benefit to the Town due to more going out than coming in after all was said and done… Comm. Vincent tried to ask a question and was cut off by the Mayor for not pushing his button…It was Comm. Clottey’s turn and she asked Mr Haag how many years were left on the parking loan…He was not sure and apologized for not doing his homework on the loan issue…The TM said she thought it was 2020 and the paperwork was on her desk and could be brought in during the break …(it never came …or if it did it was not brought forth)… Comm. Clottey asked if the Town paid the full $200,000 would that trigger the pre-penalty…The TM interjected that what Comm. Clottey was asking about was an extra payment…Mr. Haag said it was standard language and would most likely still produce the penalty payment…The TM asked for them to look at it before giving an opinion…The Mayor chimed in to say it was time to back off and give the staff time to get the answers …Mr. Haag concurred …The Mayor went on to say staff was not sure of these questions..(it appeared to this writer they were sure of the Mayor’s but not Comm.s Sasser and Clottey)… Comm. Vincent said that “Comm. Clottey asked the question with the terms left on it. I’m assuming 8 years, that was a guess with 2020. Considering it’s self funding I’m all for continued pay down of this. Like you said earlier Doug (Haag) with the inability to borrow money these days , not that the town of Lauderdale by the Sea would have any issues. We’re  pretty strong. I think we could probably bargain a good deal but at this point again I think I would rather have cash in the bank. My opinion on that and let the fund let the revenues from the parking fund self fund this for the time being and with that I yield.”… The Mayor asked if there were any more questions for M.r Haag or could he proceed with the presentation?… The Town Manager said he was actually done… and then made the statement “The bottom line is that the budget’s pretty much right on target when you look at it holistically.”… Mr. Haag again stated the hard copy detailed report would be in the Commissioner’s in box the next day …The TM said the next time they would receive a report like this would be the first of July as they prepare for the new budget… The Mayor ended the Finance Report discussion by saying that due to the questions asked the parking fund loan should be on the next Roundtable per Comm. Sasser’s request…

BC- Before that meeting the Commission should ask for figures… What the cost is of the interest and what is the difference between it and the abysmal rate we are getting by putting that same $1.5 million into a couple of CDs as stated in the TM Report to be posted next…(An avid reader pointed this out to this writer)… Also of course is the questions Comm. Sasser so rightly and aptly put forth …

Also of note…If the Acting Finance Director is correct in his statement of no monies for municipalities anytime soon in any way shape or form …again I ask why have we gone so far off the reservation with the Master Plan Redevelopment of this Town?… These statements made further add fuel to the fire as far as I as a taxpayer am concerned that the referendum items for the redevelopment big ticket items must be on the March 2012 ballot for voters to decide on whether to have bonds which would definitely be required after we burn through the 8-9 million that seems destined to be spent sooner rather than later from the looks of it…

more to come…

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