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TOWN OF PALM BEACH, FLORIDA


COMPREHENSIVE ANNUAL BUDGET FISCAL YEAR 2018

(October 1, 2017 - September 30, 2018)

Mayor and Town Council Gail L. Coniglio, Mayor

Richard M. Kleid, Town Council President Danielle H. Moore, Town Council President Pro-Tem

Julie Araskog, Town Council Member Bobbie Lindsay, Town Council Member Margaret Zeidman, Town Council Member


Town Manager Thomas G. Bradford

Prepared by the Finance Department Jane Struder, Finance Director

(561) 838-5400

www.townofpalmbeach.com

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TOWN OF PALM BEACH

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ORGANIZATIONAL STRUCTURE


CITIZENS OF PALM BEACH

CITIZENS OF PALM BEACH

ELECT


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MAYOR

Gail L. Coniglio


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TOWN COUNCIL



PRESIDENT

Richard M. Kleid

PRESIDENT PRO-TEM

Danielle H. Moore

Julie Araskog

Bobbie Lindsay

Margaret A. Zeidman

PRESIDENT

Richard M. Kleid

PRESIDENT PRO-TEM

Danielle H. Moore

Julie Araskog

Bobbie Lindsay

Margaret A. Zeidman


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APPOINTS


TOWN ATTORNEY

John C. Randolph


TOWN MANAGER

Thomas G. Bradford

ADVISORY BOARD AND COMMISSIONS



DEPUTY TOWN MANAGER

Jay Boodheshwar


DIRECTOR OF RECREATION

Beth Zickar



DIRECTOR OF PUBLIC SAFETY

Kirk W. Blouin


DIRECTOR OF HUMAN RESOURCES

Danielle Olson


DIRECTOR OF PUBLIC WORKS

H. Paul Brazil


DIRECTOR OF PLANNING, ZONING AND BUILDING

John Page


DIRECTOR OF

ii FINANCE

Jane Struder

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 which 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, 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.


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A STEP BY STEP GUIDE


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 general 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.


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


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


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GOVERNMENT FINANCE OFFICERS ASSOCIATION

Distinguished Budget Presentation Award

PRESENTED TO


Town of Palm Beach

Florida

For the Fisca l Year Beginning


October 1, 2016



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Executiv e Director


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Introduction

Budget Message 1

Strategic Planning and Key Results Measurement 18

Introductory Information

Map 27

Town Overview/Demographics 28

Assessed Valuation and Millage Rate 29

Town History 33

Financial Policies 35

Budget Preparation Process 40

Budget Calendar 45

Financial Structure 46

Long Term Financial Plan Forecast 51

Budget Summary

Fund Budget Overview 65

Budget Summary by Fund Type, Revenues and Expenditures 66

Summary of Major Revenues by Fund Type 68

Summary of Expenditure Classifications by Fund Type 70

Reserve Analysis 73

Capital Expenditures 79

General Fund

General Fund Revenues and Expenditures Budget Comparison 81

Revenues

General Fund Revenues 83

Major Revenue Sources 87

Expenditures

General Fund Expenditures 97

Legislative

Legislative (111) 102

General Government

General Government (113) 104

Town Manager

Town Manager’s Office Organization Chart 106

Administrative Management (121) 108

Town Clerk

Records Management (131) 112

Advice and Litigation

Advice and Litigation (122). 116

Information Technology

Information Technology (125) 118

Human Resources

Human Resources Organization Chart 124

Human Resources (123) 127

Finance

Finance Organization Chart 134

Finance Department Revenue and Expenditure Summary 136

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Financial Management (141) 138

Purchasing (144) 142

Planning, Zoning and Building

Planning, Zoning and Building Organization Chart 146

Planning, Zoning and Building Department Revenue and Expenditure Summary 148

Planning and Zoning (211) 150

Permit Issuance (212) 154

Inspection and Compliance (213) 157

Landmarks Preservation (214) 159

Fire Prevention (215) 161

Code Enforcement (216) 163

Fire-Rescue

Fire-Rescue Department Organization Chart 168

Fire-Rescue Department Revenue and Expenditure Summary 171

Fire Administration (411) 173

Operations (417) 176

Training (418) 180

Ocean Rescue (419) 182

Police

Police Department Organization Chart 186

Police Department Revenue and Expenditure Summary 189

Administrative Management (421) 191

Organized Crime Vice and Narcotics – OCVAN (422) 195

Records Information System Unit (423) 197

Training and Community Relations Unit – TCR (424) 199

Communications Unit (425) 203

Crime Scene/Evidence Unit (426) 205

Patrol (428) 207

Criminal Investigation Unit (429) 212

Parking Control Unit (430) 214

Public Works

Public Works Department Organization Chart 218

Public Works Department Revenue and Expenditure Summary 223

Administrative Management (511) 225

Street Repair and Maintenance (521) 227

Traffic Control (523) 229

Street Lighting (524) 231

Storm Sewer Maintenance (531) 233

Sanitary Sewer Maintenance (532) 236

Sanitary Sewage Treatment (533) 239

Residential Collection (541) 240

Commercial Collection (542) 242

Refuse Disposal (543) 244

Yard Trash Collection (544) 245

Recycling (545) 247

Beach Cleaning (546) 249

Landscape Maintenance (551) 251

Facility Maintenance (554) 253

Meter Maintenance and Collection (558) 256

General Engineering Services (561) 257

Right of Way Inspections (565) 260

Equipment Operation and Maintenance (571) 262

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Other

Library Services (321) 266

Transfers to Other Funds (611 to 625) 267

Emergency Management (710) 268

Contingent Appropriations (711) 269

Special Revenue Fund

Town-wide Underground Utilities Fund 271

Debt Service

Debt Administration 275

2016A and 2013 Revenue Bonds (Fund 205) 280

2016B Worth Avenue Revenue Bond (Fund 206) 281

Capital Funds

Capital Funds 283

Impact of Capital Investments on Operating Budget 284

Capital Projects by Project Type and Fund 285

Capital Improvement Fund (Fund 307)

Five Year Capital Improvement Pay-as-you-go/Facilities Program 287

Pay-as-you-go Capital Improvement Fund 288

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

CCMP FY16 Accomplishments and FY17 Action Plan 291

Comprehensive Coastal Management Project Fund 305

Coastal Management Program Budget 308

Worth Avenue Assessment District (Fund 311)

Worth Avenue Maintenance 309

Accelerated Capital Fund (Fund 314)

2013 Accelerated Capital Projects Fund. 311

Accelerated Capital Improvement Program Budget Report 312

Project Fact Sheets

Recreation Enterprise Fund (Fund 403)

Recreation Enterprise Fund Organization Chart 346

Recreation Enterprise Fund Revenue and Expenditure Summary 349

Marina 351

Golf Course 356

Tennis 363

Recreation Center 368

Administration 373

Capital Program 374

Five Year Capital Improvement Plan 375

Depreciation Program 376

Equipment Replacement 377

Internal Service Funds

Self Insurance – Risk

Self Insurance Fund – Risk Management (Fund 501) 379

Self Insurance – Health

Self Insurance Fund – Health Benefit (Fund 502) 383

Equipment Replacement Fund

Equipment Replacement Fund (Fund 320) 385

Trust and Agency Funds

Retirement Fund 391

Employees Retirement System (Fund 600)

Employees Retirement Fund 399

Health Insurance Trust (Fund 610)

Health Insurance Trust 401

Retiree Sliding Scale Insurance Premium Rates 2017 405

Appendix

Authorized Positions 409

Donation Reserve Account Summary 414

Financial Policies

Fund Balance 415

Budgetary Control 421

Designation of General Fund Balance - Liability Related to Compensated Absences Leave Balances 422

Contingency Reserve – General Fund 423

Reserve for Encumbrances, Continuing Appropriations, and Prepaid Expenses 424

Revenue Shortfall Plan 425

Debt Management Policy 427

Contingency Reserve – Capital Fund 428

Contingency Reserve – Equipment Replacement Fund 429

Equipment Replacement Reserve 430

Contingency Reserve – Recreation Enterprise Fund – Capital Fund 431

Contingency Reserve – Recreation Enterprise Fund 432

Dock Replacement Reserve – Recreation Enterprise Fund 433

Equipment Replacement Reserve – Recreation Enterprise Fund 434

Recreation Enterprise Fund – Maintenance and Improvement Reserves 435

Recreation Enterprise Fund Reserve 436

Contingency Reserve – Risk Fund 437

Reserve for Catastrophic Exposures/Emergencies – Risk Fund 438

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Index

Contingency Reserve – Health Insurance Fund 439

Funding Policy for the Town of Palm Beach Retirement System 440

Index… 441

Glossary

Glossary 447


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TOWN OF PALM BEACH BUDGET MESSAGE


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Budget for Fiscal Year 2017-2018


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OCTOBER 1, 2017


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October 1, 2017

Budget Message

Town of Palm Beach, Florida


Honorable Mayor and Town Council

And Citizens of the Town of Palm Beach


I am pleased to submit this budget message, pursuant to the Town Charter, and to enable you to focus on the highlights of the proposed FY2018 budget.


The total proposed FY2018 town-wide budget including all funds is $249,285,005. The total proposed General Fund operating budget is $80,489,229.


The town-wide budget organized by fund type is as follows:


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FY18 Town-wide Goals

Budget Message


On April 13, 2017, the Town Council adopted Town manager goals for 2017 and 2018. These goals have been integrated into the FY18 budget. The approved goals are as follows:


  1. Develop a proposed General Fund budget for FY18 that does not reduce service levels and is less than the Long Term Financial Plan (LTFP) General Fund assumptions for FY18. The FY18 budget excluding the extraordinary transfer to the pension fund is $176,337 less than the LTPF.

  2. In conjunction with the Underground Utilities Task Force, develop a recommended financing plan and the associated initial assessment for the Underground Utility Project. Hire the Underground Utilities Coordinator after the Town Council approves the project to facilitate better project area communications and monitoring of project milestones, budget and expenditures in conjunction with Public Works assigned staff project engineer. An underground utilities coordinator has been hired and project is underway. The financing plan has been delayed by a lawsuit.

  3. Develop and recommend a plan to improve enforcement of rules pertaining to construction related parking and related job site traffic impacts. Develop and implement a computer/software based traffic management tool to be used by staff to facilitate up-to-date data in the determination of ROW permit issuance to avoid conflicts in north/south roadway corridors, to facilitate the approval process, and notification to the public of pending road closures and detours. Develop a matrix, listing “large” public and private construction projects, identifying traffic impacts on residents for each project and delineating if the project is anticipated to impact an arterial roadway. Based upon final matrix content ascertain feasibility of modifying schedule of Town controlled projects to minimize traffic impacts. Review data and ascertain need for construction moratorium on Fridays when POTUS comes to Town for large projects defined as any project generating more than 10 trips per day. The FY18 budget includes an additional .5 FTE to bring up a vacant right of way inspector from part time to full time for a total of 2 full time inspectors.

  4. Compete Master Plan for the Town Docks, with budget, projected revenues and expenses compared to existing budget, drawings, schedule for replacing docks with state-of-art facility, with no marina amenities, and identify grant funding sources and grant program funding amounts. Consider hiring marina expert to oversee process. Consultant has been hired to complete the master plan as well as a marina expert to oversee the process.

  5. If the new Recreation Center is approved, develop a financing plan for the Town’s share of the cost. The Recreation Center construction has been delayed due to a lawsuit.



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Budget Message

FY18 Budget Presentation

Staff prepared the FY18 budget using Zero Line Item Budgeting. This method of budgeting did not start with last year’s budget. Rather, departments were given a blank budget request form for each line item, instead of last year’s budget or actual expenditures as the starting point – hence, the label of zero – line item is applied. Departments then rebuild their budgets from the ground up, justifying each line item. Where possible, departments were asked to provide the drivers of cost. However, not providing sufficient detail for an expenditure can be an invitation for increased scrutiny of the request.


Department requests and justifications were sent to the Finance Department and Town Manager's Office (Administration) who review them in a series of meetings with staff using the justifications, rather than what was spent last year, as the point of comparison. The budget program requests are often accompanied by a program description to gauge purpose and intended output for the program. The Administration considers the requests, further discusses them with departments as necessary, and then develops a final recommended budget. You or the public never see the process and the forms used. This year we shared these forms with the Town Council at the July 11th Special Town Council meeting so you could see the level of detail this work entails. The information can be found on our website in the preliminary budget document.


General Fund


Budget Highlights

The millage rate has been reduced by 2.05% resulting in a $4 increase per million of value for homestead property owners.

A Communication Specialist position has been included in the FY18 budget. Costs have been split between the General Fund, the Coastal Protection Fund and the Underground Utility Fund.

The open part-time Right of Way Inspector position has been increased to a full time position. Offsetting revenue provided by an increase in building permit fees.

Merit pay increases are included for all employees that are not at the top of their ranges and we have included an adjustment to the pay ranges of 2.5% these increases total

$543,696.

Health insurance costs have increased by 4.54% for the first time in 5 years. This will result in an increase to premiums that will be shared between the Town and our employees. The increase for the fund totaled $242,549.

Estimated costs for POTUS and dignitary protection in FY18 of $226,980 have been included in the General Government section of the budget. We are using this program for these expenses in order to highlight them and track them separately from the Police Department expenditures.

An extraordinary transfer to the Retirement Fund from the Town unassigned fund balance of $4,700,000 is included. Additional funds over and above the ARC for both FY17 and FY18 have been transferred and an additional $300,000 was transferred from the FY17 budget for a total transfer to the Retirement Fund UAAL of $5,420,000.


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Revenues

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. Appearing on the following page is a millage rate table to help facilitate a discussion of where we are and what is proposed. The proposed FY18 millage rate of 3.2037 provides a $4 tax increase per million of value to homesteaded property owners, is a decrease of 2.05% from FY17.

Millage Rate Consideration

The State of Florida requires the Town to calculate a rolled-back millage rate. The rolled- back rate is defined as that 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 adopted millage is 3.29% over the rolled back rate of 3.1018.


FY17 Millage Rate

FY18 Final Adopted

Millage Rate

3.2706

3.2037

Tax Revenue

$49,374,406

$51,470,033

Millage % Increase/Decrease from FY17

n/a

-2.05%

Homestead Value Increased by 2.1%

$1,000,000

$1,021,000

Town Taxes

$3,107

$3,111

Increase/(Decrease) over FY17

n/a

$4


There are a number of revenue types in the General Fund. These are categorized in the table on the following page:


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Revenue


FY2017


FY2018

FY17 vs. FY18

Difference

%

Change

Ad Valorem Taxes

$ 49,494,500

$ 51,470,500

$ 1,976,000

3.99%

Non Ad Valorem Taxes

5,903,000

6,150,000

247,000

4.18%

Licenses & Permits

9,503,500

9,947,975

444,475

4.68%

Intergovernmental

1,178,500

1,185,450

6,950

0.59%

Charges for Services

3,816,550

3,943,650

127,100

3.33%

Fines and Forfeitures

1,255,646

1,138,800

(116,846)

-9.31%

Investment Earnings

704,339

581,858

(122,481)

-17.39%

Miscellaneous

345,112

420,000

74,888

21.70%

Interfund Transfers

685,000

585,000

(100,000)

-14.60%

Transfers from unassigned fund balance for Extraordinary Transfer to Retirement Fund


2,500,000


3,500,000


1,000,000


40.00%

Transfers from unassigned fund balance for

Contingency and Compensated Absences


1,466,230


1,565,996


99,766


6.80%

Total Revenues

$ 76,852,377

$ 80,489,229

$ 3,636,852

4.73%


Significant highlights for General Fund revenues include:


Expenditures

The General Fund expenditure breakdown by category is shown in the table below:



Expenditure Category


FY2017


FY2018


FY17 vs. FY18

Difference


%

Change

Salary and Wages

$ 24,737,579

$ 26,001,862

$ 1,264,283

5.11%

Pension Benefits

8,774,323

9,527,616

753,293

8.59%

Other Employee Benefits

8,135,225

7,844,571

(290,654)

-3.57%

Contractual

9,432,209

9,617,449

185,240

1.96%

Commodities

1,810,844

1,949,093

138,249

7.63%

Depreciation/Capital Outlay

2,694,682

2,459,607

(235,075)

-8.72%

Library

325,250

335,008

9,758

3.00%

Other/Transfers

18,442,265

17,995,007

(447,258)

-2.43%

Subtotal Operating Expenditures

74,352,377

75,730,213

1,377,836

1.85%

Extraordinary Transfer to Retirement Fund (*)

2,500,000

4,759,016

2,259,016

90.36%

Total Expenditures

$ 76,852,377

$ 80,489,229

$ 3,636,852

4.73%

*The true total for FY18 is $5,059,016, and the remaining balance is included in the pension benefit amounts for FY17 and FY18.

For all departments of the Town, the overall increase in operating expenditures is 1.85% over FY17, after the extraordinary transfer to the Retirement fund the total expenditure budget increased 4.73% over FY17. Highlights of the General Fund expenditures changes are as follows:

The salary and wage increase is due to the following reasons:


The transfer to the Capital Improvement Fund has decreased by $172,176.


Bonds funds in the ACIP II fund will be used to fund the remaining capital projects outlined in the ACIP II budget section of this document.


Coastal Management

The Coastal Management Fund (309) is used in part to fund the construction costs of the coastal projects. The details of the FY18 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 transfer to the Coastal Management Fund increased $145,300.

Recreation Enterprise Fund

The Recreation Enterprise Fund (REF) comprises all municipal recreation activities and facilities in the Town, including the Par 3 Golf Course, Seaview Park and Phipps Ocean Park Tennis Centers, the Recreation Center, and the Town Docks. The preparation of the budget was guided by the department mission of providing outstanding recreation programs, facilities and services which enrich and enhance the lives of its Palm Beach residents and visitors.

The 2018 spending plan is 2.27% lower than the FY2017 adopted budget, while revenue estimates are projected to increase by 7.85%. Continuous cost control measures will be incorporated into the operational efficiencies of each division, throughout the fiscal year, to ensure fiscally responsible decisions are made in an attempt to minimize expenses and improve upon established cost recovery goals.

Revenue

Tennis revenue projections are slightly higher for FY18. The restructuring of the tennis instruction contract and the assumption by the Town of the Pro Shop merchandise operation resulted in an increase in revenue. Fiscal year 2017 saw a significant growth in tennis instruction and pro shop net revenue. Growth in revenue from these sources are expected to continue to show modest increases for fiscal year 2018.


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Budget Message

Restructuring of the 12 Play Pass is anticipated to increase the tennis revenue stream. The previous 12 Play Pass was comprised of buy 10 daily pays and receive two free. The approved pass structure change to buy 12 daily plays, receive 1 free will produce an increase in revenue for daily play passes of 20% for each 12 Play Pass sold. In addition, revenue growth created as a result of the increase to the Maintenance and Improvement Fee is expected to show an increase of over 70%. Creative programming opportunities will also be explored in an effort to continue to grow participation.

Recreation Center revenue projections reflect the assumption of the current center remaining operational during the fiscal year. A change in this direction will result in a modification of the revenue estimations for fiscal year 2018. The revenue focus for the Recreation Center will remain on the implementation of new programs, revitalization of existing programs and the development of marketing strategies to raise awareness of program offerings. Projections for fiscal year 2018 anticipate a 2.48% increase in revenue.

Town Dock revenues are expected to increase in fiscal year 2018. This increase can be attributed to the creation of a separate reserve within the Recreation Enterprise Fund to fund the costs of non-routine maintenance and improvement (M&I) projects at the Town Docks. These funds could initially be used to supplement the Dock Replacement Reserve. Upon the completion of the dock replacement project, these funds could be utilized to support capital improvement projects and unanticipated maintenance projects necessary to keep the facility in exceptional condition. In addition, the elimination of seasonal leases, the establishment of a Utility Fee and the rise in the dockage rates are all factors in the projected revenue growth.

Golf Course revenue projections are expected to increase during FY18. The Golf Instructor contract was restructured in fiscal year 2017. This resulted in an increase in revenue of 9% from fiscal year 2016. It is anticipated that this revenue stream will continue to show positive growth. Fee changes for fiscal year 2018 include: the creation of a non-resident riding cart fee, which is $2.50 over the resident rate, the elimination of the guest/hotel rate for greens fees, increases to the non-resident (regular) rate for single, double and junior annual passes and an adjustment to the rental fee of pull carts to $7.00, regardless of season or 18/9 hole play. It is anticipated that these fee adjustments would generate revenue growth of over 15%.

Improvements being made at the Clubhouse, which include the installation of improved weather screening, are expected to heighten patronage at the on- site restaurant. This increase in restaurant patrons will positively impact revenue paid to the Town through the Food and Beverage Agreement. Additional creative revenue generating programs are currently being investigated for implementation during fiscal year 2018, this includes the launch of a new website, which would include an on-line store and the ability for residents to book tee times 30 days in advance.



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Expenditures

Budget Message


Increases in expenditures comes from increasing commodity prices, personnel costs and the desire to consistently improve operations and infrastructure. The staff take a thoughtful approach to all expenditures to ensure that these decisions are made in a fiscally responsible manner. The operating plan for fiscal year 2018 represents an overall decrease of 2.27% from the fiscal year 2017 budget.

The Administration Section proposed budget for fiscal year 2018 exhibits an increase in expenses due to the rise in personnel costs. This can be attributed to increases in salaries and wages and employee benefits. In addition, the cost for software maintenance is reflected in the Recreation/Administration budget for the first time this year. Previous years this cost had been absorbed within the budget of Information Technology. The Tennis Programs and Facilities expense budget will see a minimal budgetary decrease of .374%. The retirement of a long time tennis employee during fiscal year 2017, caused a reduction in our expenditures, within salaries and wages. The Recreation Center budget is projected to remain static for fiscal year 2018. Expenditures are being proposed utilizing the assumption of a 12 month operation for the current facility. The forward movement of the proposed new Recreation Center would result in a modification of this budget to reflect the reduction in operating costs. Budgeted funds within the Special Recreation Contracts account are directly related to the revenues credited to the youth and adult program fees. Increases to registration in programs will result in increased expenditures and conversely a decrease in registrations result in a reduction in expenditures. This is due to the structure of instructor program agreements, in which payment is based upon a percentage of revenue generated. Expenses in the Marina budget show a decrease in operating expenses. This is due to a reduction in anticipated expenses in Other Contracted Services from fiscal year 2017. During the budget development process for fiscal year 2017, it had been anticipated that alternate arrangements would need to be made for security services. Staff was able to positively resolve issues with the current firm, facilitating the continuation of the existing agreement. The estimation for electric service was budgeted at a level that was higher than necessary in fiscal year 2017. This account has been corrected, assisting in the reduction of the overall budget for fiscal year 2018. The Par 3 expenditure reduction can be attributed to the removal of expenses previously budgeted through the maintenance & improvement fund to the capital improvement program in fiscal year 2018.

Details regarding each of the programs of the REF can be found in the Recreation Enterprise Fund section of this document.

Internal Service Funds (501, 502, 320)

The transfer to the Risk Fund (501) has decreased by $9,562 (-.52%) from FY17 to FY18. The decrease is related to reductions in the fixed costs for liability and property insurance.



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Budget Message

The Health Insurance Fund (502) experienced an increase of 4.54%, or $242,549 which will be funded through an increase in employee contribution and reserves of the Health Fund.

The Equipment Replacement Fund (320) contains the accumulated depreciation of all fixed assets over the established thresholds of $2,500 for capital equipment and $1,500 for computer equipment. The annual depreciation transfer for FY18 is $2,276,600. This amount represents a decrease of $21,533. In FY18, the total expenditures for equipment purchases will be $2,980,896. 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 FY18 actuarially determined contribution to the DB plan is $9,320,235.

As mentioned earlier, an extraordinary transfer of $5,420,000 was approved by the Town Council to the Retirement Fund. A new policy was adopted that would require annual appropriations of the annual required contribution plus $5,420,000 to be capped at $16 million. The extraordinary contribution is made up of $4,759,016 from the General Fund budget including $3.5 million from reserves, excess contributions above the ARC totaling

$360,984 and $300,000 from the FY17 budget DC savings and forfeiture revenue.

The Town annual contribution comparison for FY17 vs. FY18 is shown in the table below:

Town Retirement Contribution


Town Retirement Contributions

FY2017

FY2018

Change

% Change

General Employees DB

$2,414,960

$2,997,898

$582,938

24.14%

Lifeguards DB

163,443

188,431

24,988

15.29%

Police DB

2,832,558

2,870,523

37,965

1.34%

Fire-Rescue DB

2,676,124

3,263,383

587,259

21.94%

Total DB Contribution

$8,087,085

$9,320,235

1,233,150

15.25%

DC Contributions

1,029,957

$634,828

(395,129)

-38.36%

Total Town DB And DC Contribution

$9,117,042

$9,955,063

$838,021

9.19%


Based on recent pension changes, the Town no longer provides a DC plan for public safety employees. For General Employees and Lifeguards, the new plan was modified and now 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 chart below:



15

Budget Message

Employer Defined Contribution Funding


FY2014

Actual

FY2015

Actual

FY2016

Actual

FY2017

Budget

FY2018

Budget

General

$699,122

$756,792

$817,696

$923,990

$626,050

Lifeguards

10,943

12,410

14,850

13,357

8,778

Police

265,191

294,148

287,545

0

0

Fire-Rescue

174,650

154,893

153,963

92,610

0

Total

$1,149,906

$1,218,243

$1,274,054

$1,029,957

$634,828

Health Insurance (OPEB) Trust (610)

The actuarially determined transfer to the OPEB trust from the General Fund in the FY17 budget is $960,000. This amount is $379,000 (28.3%) less than FY16. The trust was established to account for and fund the liability for the Town’s share of retiree health benefits. The contributions are funded like pension benefits, taking into account the accrued cost for current employee benefits as well as the costs of retired employee benefits. 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.

Inventory of Assets

The estimated inventory of parts, supplies, fuel and materials on hand as of October 1, 2017, was $349,706 and the total fixed asset inventory (which includes machinery, equipment, and vehicles with a value over $2,500 and computer equipment with a value over $1,500) was

$22,119,264.

Financial Policies

The Town has 20 formally adopted financial policies. The establishment of specific reserve policies is an important part of prudent financial management and the practice is strongly recommended by the Government Finance Officers Association (GFOA) and the National Advisory Committee on State and Local Budgeting (NACSLB).


16

Budget Message

For FY18, The Town Council adopted a funding policy for the Town of Palm Beach Retirement System to ensure that additional funds will be appropriated in future budgets to reduce the Town’s Unfunded Actuarially Accrued Liability.

Copies of the Town’s financial policies can be found in the back of this document in the appendix.

Final Thoughts


I wish to acknowledge the efforts of Jane Struder, Director of Finance, Cheryl Somers, Assistant Director of Finance, Amy Wood, Accounting Supervisor, and Jay Boodheshwar, Deputy Town Manager for their efforts in compiling this document which was generated with the valuable input of each Department Director and their respective staffs.

Respectfully Submitted,


TBradford

Thomas G. Bradford Town Manager

cc: Department Directors

Jay Boodheshwar, Deputy Town Manager


17


Strategic Planning and Performance Measurement


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 Townwide 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 FY18.


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 strategic plan was formally approved by the Town Council in 2003. The strategic plan 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.


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In the future, we envision...


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


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


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.


19


Character and Quality of Life


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


In the future we envision...


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


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


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


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 on the following page:


20


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.


The Vision/Strategic Plan/Performance Measurement Process


The Townwide 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 Townwide, department and program goals, and the annual budget. We then use KRM’s to track our progress in achieving the goals that have been set.


The process is depicted in a flowchart on the following page 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.


21


The Vision/Strategic Plan/Goals and Performance Measurement Process


image


22


Townwide Budget Priorities for FY2018


The Town Council’s annual budget priorities for FY2018 are outlined below. These priorities were developed with input from the Mayor and Town Council, Town Manager, Department Directors, and staff.


Once the Mayor and Town Council set the FY2018 priorities, the Departments developed goals and objectives that would accomplish the priorities. In addition, the Departments developed other major initiatives for the year. The Council priorities and Departmental goals will be reviewed on a continual basis throughout the fiscal year.


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


Town Council Priority #1

Develop a proposed General Fund budget for FY18 that does not reduce service levels and is less than the Long Term Financial Plan (LTFP) General Fund assumptions for FY18.

Department

Department Goals


Finance

  • Work with the Town Manager and Directors to prepare a budget that meets the Town Council goal.


Police

  • Review FY2018 department budget and functions to achieve possible cost savings and revenue sources for future budgets.

Town Council Priority #2

In conjunction with the Underground Utilities Task Force, develop a recommended financing plan and the associated initial assessment for the Underground Utility Project. Hire the Underground Utilities Coordinator after the Town Council approves the project to facilitate better project area communications and monitoring of project milestones, budget and expenditures in conjunction with Public Works assigned staff project engineer.

Department

Department Goals


Finance

  • Work with the UUTF, consultants and the Town Council to prepare a cost effective and comprehensive financing plan for the underground utilities project.



23


Town Council Priority #3

Develop and recommend a plan to improve enforcement of rules pertaining to construction related parking and related job site traffic impacts. Develop and implement a computer/software based traffic management tool to be used by staff to facilitate up-to-date data in the determination of ROW permit issuance to avoid conflicts in north/south roadway corridors, to facilitate the approval process, and notification to the public of pending road closures and detours. Develop a matrix, listing “large” public and private construction projects, identifying traffic impacts on residents for each project and delineating if the project is anticipated to impact an arterial roadway. Based upon final matrix content ascertain feasibility of modifying schedule of Town controlled projects to minimize traffic impacts. Review data and ascertain need for construction moratorium on Fridays when POTUS comes to Town for large projects defined as any project generating more than 10 trips per day.

Department

Department Goals


Fire-Rescue

  • To monitor and mitigate any effects from heavy traffic caused by all bridge closures, and/or Presidential visits.


Police

  • Monitor the allocation of resources to ensure the public’s safety, address traffic flow issues, and provide timely communications.


Public Works

  • Right-of-way maintenance and enforcement ensuring all Town right-of-ways are managed to meet the Town’s standards applicable to public rights-of-way and easements within the Town of Palm Beach.

  • Provide all necessary traffic control devices and markings to ensure safe pedestrian and vehicle operation.

Town Council Priority #4

Compete Master Plan for the Town Docks, with budget, projected revenues and expenses compared to existing budget, drawings, schedule for replacing docks with state-of-art facility, with no marina amenities, and identify grant funding sources and grant program funding amounts. Consider hiring marina expert to oversee process.


Recreation

  • Develop a strategic plan for changes in Town Recreation programs, services and facilities. Engage with patrons, parents, and community groups to incorporate feedback and ideas in programming services and facilities. Develop a public awareness plan for recreation programs. Prioritize recreation needs.


24


Town Council Priority #5

If the new Recreation Center is approved, develop a financing plan for the Town’s share of the cost.

Recreation

  • Develop a strategic plan for changes in Town Recreation programs, services and facilities. Engage with patrons, parents, and community groups to incorporate feedback and ideas in programming services and facilities. Develop a public awareness plan for recreation programs. Prioritize recreation needs.

Finance

  • Work with the Town Manager, Financial Advisors and staff to develop a low cost financing plan for the Town’s share of the cost.



Department Performance Measures


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


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26


Town of Palm Beach


image


Introductory Information


image

Location FY2018



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



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27


Town Overview/Demographics

FY2018

Town Overview/Demographics

FY2018


DEMOGRAPHICS

DEMOGRAPHICS


image

image

image

Palm Beach at a Glance

Date of Incorporation April 17, 1911

Form of Government Council/Manager

Land Area 3.77 Square Miles

FY2018 General Fund Budget $80.5 Million

Taxable Property Valuation $16.9 Billion


Town of Palm Beach Demographics

Population 2016 (Univ of Florida Est) 2015 (Univ of Florida Est) 2014 (Univ of Florida Est) 2013 (Univ of Florida Est)

2010 (Census)

2000

1990

1980

1980

1960

1950


Resident Statistics

Median Age

Avg. Household Size Median Home Value


Racial Composition Caucasian & Other Races Hispanic/Latino

African American Asian


Bond Ratings

2013/2016

Revenue Bond

Moody’s Aa1

S&P AA+


8,040

8,040

8,170

8,168

8,161

9,676

9,814

9,432

9,086

6,055

3,886


67.6 yrs.

1.74

$924,100


94.5%

3.9%

.6%

1.0%


Issuer’s Rating Aaa

AAA

Service Statistics

Police Stations

Fire-Rescue Stations


Public Elementary School Public Library

Recreation Facilities Tennis Courts

Par 3 Golf Course Marina (88 slips) Community Building Playfields

Bicycle Paths Picnic Tables Outdoors Grills Recreation Areas Phipps Ocean Park Seaview Park Neighborhood Parks Bradley Park

Kaplan Park Special Use Parks

Public Park on Beach Municipal Beach Peruvian/So. County Road Southern Blvd. Causeway Nature Islands


Registered Voters


1

3

1

1


14

1

1

1

5

9.3 miles

77

28


24 acres

4.6 acres


4.5 acres

.3 acres


3.0 acres

5.60 acres

.24 acres

9.60 acres 39 acres


7,785


28

Taxable Value and Millage Rate


Millage Rate Tax Revenue

Millage Rate Tax Revenue

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The Town Council approved a millage rate of 3.2037 for FY18, a decrease from the FY17 millage rate of 3.2706. Taxable value increased 6.42% to $16,911,518,815 for FY18. Ad Valorem revenue of $51,470,500 is included in the FY18 budget. Town adopted final millage rate is above rollback but below maximum millage rates. The increase in tax revenue from the rollback rate is $1,637,158. The chart below identifies the millage rate options available to the Town and the Town’s adopted final millage rate.



Rollback Millage Rate

3.1018

$49,833,342

Majority Vote Maximum Millage Rate

3.2051

$51,492,954

2/3 Vote Maximum Millage Rate

3.5256

$56,642,088


Town Adopted Final Millage Rate 3.2037 $51,470,500

Town Adopted Final Millage Rate 3.2037 $51,470,500

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 is Florida personal income was 3.11%. The 2/3 vote maximum rate is 110% of the majority maximum rate.


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The Town’s taxable value declined by 15% from FY09 through FY12, and since then values have increased to all-time highs. The FY15 millage rate increased to supplement the budget for funding of the coastal protection program. Since that time, the millage rate had declined due to increasing values. The tax revenue trend is shown on the chart on the following page.


29

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The Town millage rate represents 19.23% of the total tax bill. The table below illustrates the difference between the FY17 vs. FY18 total tax bill by taxing district for a Palm Beach property owner with a taxable value of $1 million.


Impact on owner of $1 million property



Taxing Authority

FY17

Millage Rate

FY18

Millage Rate

FY18 Tax Change Per

$1 Million Value $1 million Value % Change

% of Total Tax Bill


Palm Beach


3.2706


3.2037


$3,204


-$66.90


-2.05%


19.23%

Palm Beach County

4.9142

4.9023

$4,902

-$11.90

-0.24%

29.43%

Palm Beach County School District

7.0700

6.7690

$6,769

-$301.00

-4.26%

40.64%

South Florida Water Mgmt

0.2836

0.2659

$266

-$17.70

-6.24%

1.60%

Children Services

0.6833

0.6590

$659

-$24.30

-3.56%

3.96%

Florida Inland Navigation

0.0320

0.0320

$32

$0.00

0.00%

0.19%

Health Care District

0.8993

0.7808

$781

-$118.50

-13.18%

4.69%

Everglades Construction

0.0471

0.0441

$44

-$3.00

-6.37%

0.26%

Grand Total

17.2001

16.6568

$16,657

-$543.30

-3.16%

100.00%


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


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30

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


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Property Breakdown by Number of Parcels


The Town has a total of 9,434 total parcels. Residential units total 8,879 or 94% of all parcels. Condominiums and Cooperatives represent the greatest percentage of total parcels in the Town at 68% or 6,372 parcels. Single family residential parcels are the second largest group at 2,303 parcels or 24% of the total. Commercial and industrial parcels total 400 and the balance is made up of multi- family, government, institutional and miscellaneous parcels. Properties with a Homestead exemption represent 35% of the total parcels in the Town.


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Property Breakdown by Taxable Value


The taxable value of parcels in the Town totals

$16.9 billion. Residential parcels represent 91% of the total value of parcels and single family residential represents 64% of the total value. Commercial and industrial properties represent 8% of the total value of parcels.

Properties with a homestead exemption represent $6.5 billion (38.6%) of the total taxable value.


31

Historical Building Permit Detail


During FY17, permit applications decreased from two historically high prior years. A total of 9,132 permits were issued in FY17, compared to 9,896 for FY16. Total permit valuation for FY17 was $238,640,151 compared to $289,645,824 in FY16. The decrease in permit activity in FY17, represents a slow-down in activity, but it is still much higher than it was in FY12 and prior. We expect the current levels to be maintained in FY18.


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


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32

Town History


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.

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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.



33

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 club house 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 had 7,785 registered voters in 2017, with approximately 8,160 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. Shops on Worth Avenue 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.


34

Financial Policies

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



38


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63

Projected Surplus/ Deficit


Due to the deep cuts in expenditures the projection of the annual surplus/deficit has changed dramatically since the 2009 forecast. Deficits were originally forecast to begin in 2012 and continue throughout the forecast period, peaking at $20.2 million in 2020. Compared to the 2015 forecast, the 2017 forecast contains projected surpluses through most of the forecast period. There are small manageable deficits in 2025 and 2026.


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64


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Fund Budget Overview FY2018


Fund Budget Overview


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65

FY 18 Budget Summary by Fund Type, Revenues and Expenditures

Special

Debt

Capital

Internal

Trust &

General

Revenue

Service

Projects

Enterprise

Service

Agency

Totals

Revenues

Ad Valorem Taxes

$51,470,500

$0

$0

$0

$0

$0

$0

$51,470,500

Non Ad Valorem Taxes

6,150,000

0

0

500,000

0

0

0

6,650,000

Licenses and Permits

9,947,975

0

0

0

0

0

0

9,947,975

Intergovernmental

1,185,450

0

0

7,200,000

0

0

0

8,385,450

Charges for Services

3,943,650

0

0

0

6,627,400

8,911,975

0

19,483,025

Fines and Forfeitures

1,138,800

0

0

0

0

0

0

1,138,800

Contributions/Grants

0

0

0

5,000

6,571,154

0

11,260,070

17,836,224

Gain/Loss on Investments

0

0

0

0

0

0

15,436,649

15,436,649

Interest Earnings

581,858

6,000

0

377,676

14,000

286,162

1,700,000

2,965,696

Miscellaneous

420,000

0

0

0

0

30,000

2,500

452,500

Special Assessments

0

5,080,000

710,000

258,638

0

0

0

6,048,638

Commercial Paper

0

14,450,000

0

0

0

0

0

14,450,000

Interfund Transfers

585,000

13,880,000

6,916,632

12,148,324

0

12,750,000

5,719,016

51,998,972

Subtotal

75,423,233

33,416,000

7,626,632

20,489,638

13,212,554

21,978,137

34,118,235

206,264,429

Appropriations from Fund

Balance


5,065,996


1,152,300


18,214


26,468,236


3,017,334


7,298,496


0


43,020,576

Total Revenues

$80,489,229

$34,568,300

$7,644,846

$46,957,874

$16,229,888

$29,276,633

$34,118,235

$249,285,005


Expenditures

Salaries and Wages

$26,001,862

$118,500

$0

$169,540

$1,392,733

$207,095

$133,896

$28,023,626

Employee Benefits

16,412,187

21,800

0

67,510

656,502

5,665,310

2,078,115

24,901,424

Contractual

9,617,449

21,678,000

0

17,600

1,523,980

1,666,645

20,360,277

54,863,951

Commodities

1,949,093

0

0

6,063

363,970

6,687

0

2,325,813

Depreciation/Capital Outlay

2,459,607

0

0

41,926,623

11,341,137

2,980,896

0

58,708,263

Debt Service

0

0

7,624,846

0

198,263

0

0

7,823,109

Interfund Transfers

23,058,146

12,750,000

0

4,486,038

585,000

14,750,000

0

55,629,184

Other

990,885

0

20,000

284,500

168,303

4,000,000

0

5,463,688

Subtotal

80,489,229

34,568,300

7,644,846

46,957,874

16,229,888

29,276,633

22,572,288

237,739,058

Transfer to Fund

Balance/Retained Earnings


0


0


0


0


0


0


11,546,247


11,546,247

Total Expenditures

$80,489,229

$34,568,300

$7,644,846

$46,957,874

$16,229,888

$29,276,633

$34,118,535

$249,285,305

Financial Ratios

Special

Debt

Capital

Internal

Trust &

General

Revenue

Service

Projects

Enterprise

Service

Agency

Total

Ad Valorem Taxes as

percentage of total fund budget


63.95%


0.00%


0.00%


0.00%


0.00%


0.00%


0.00%


20.65%

Ad Valorem Taxes per capita (8,040 population)


$6,402


$0


$0


$0


$0


$0


$0


$6,402

Total expenditures per capita (8,040 population)


$10,011


$4,300


$951


$5,841


$2,019


$3,641


$4,244


$31,006

Personnel as a percentage of the total budget


32.30%


0.00%


0.00%


0.36%


8.58%


0.71%


0.39%


11.24%

Capital expenditures as percentage of total fund budget


3.06%


0.00%


0.00%


89.29%


69.88%


10.18%


0.00%


23.55%

Capital expenditures per capita (8,040 population)


$306


$0


$0


$5,215


$1,411


$371


$0


$7,302


66

FY 18 Budget Summary by Fund Type, Revenues and Expenditures

Special

Debt

Capital

Internal

Trust &

General

Revenue

Service

Projects

Enterprise

Service

Agency

Totals


image

FY18 Budget by Revenue Type All Funds



Appropriations from Fund Balance

17.3%


Interfund Transfers 20.9%


Ad Valorem Taxes

20.6% Sales and Use Taxes

2.7%


Licenses and Permits 4.0%

Intergovernmental Revenue 3.4%

Commercial Paper 5.8%


Contributions

7.2% Fines and Forfeitures

Charges for Services 7.8%

Special

Assessments

Interest Miscellaneous Earnings

Gain/Loss on Investments

0.5%

2.4%

0.2%

    1. %

        1. %


          image

          FY18 Budget by Expenditure Classification All Funds



          Commodities 0.9%


          Contractual 22.0%

          Capital Outlay 23.6%


          Debt Service 3.1%


          Employee Benefits 10.0%


          Personnel 11.2%


          Other 2.2%


          Interfund Transfers 22.3%

          Transfer to Fund

          Balance/Retained Earnings 4.6%


          67

          Summary of Major Revenues by Fund Type

          FY18 Budget

          FY18 Budget

          to

          FY2018

          FY2015

          FY2016

          FY2017

          FY2017

          FY2018

          FY17 Budget

          %

          Description

          Actual

          Actual

          Budget

          Projected

          Budget

          % Variance

          of Total

          General Fund

          Ad Valorem Taxes

          $43,869,888

          $47,882,187

          $49,494,500

          $50,195,981

          $51,470,500

          3.99%

          63.95%

          Sales and Use Taxes

          8,056,312

          8,061,358

          8,103,000

          8,188,599

          6,150,000

          -24.10%

          7.64%

          Licenses and Permits

          10,657,677

          10,096,672

          7,303,500

          8,240,833

          9,947,975

          36.21%

          12.36%

          Intergovernmental Revenue

          1,102,690

          1,122,466

          1,178,500

          1,028,494

          1,185,450

          0.59%

          1.47%

          Charges for Services

          3,957,601

          4,131,755

          3,816,550

          3,681,626

          3,943,650

          3.33%

          4.90%

          Fines and Forfeitures

          1,099,526

          1,174,838

          1,255,000

          938,624

          1,138,800

          -9.26%

          1.41%

          Interest Earnings

          597,586

          490,102

          704,339

          424,359

          581,858

          -17.39%

          0.72%

          Miscellaneous

          213,106

          332,898

          345,758

          479,208

          420,000

          21.47%

          0.52%

          Interfund Transfers

          885,000

          785,000

          685,000

          685,000

          585,000

          -14.60%

          0.73%

          Subtotal

          70,439,386

          74,077,276

          72,886,147

          73,862,724

          75,423,233

          3.48%

          93.71%

          Appropriations from Fund Balance

          195,267

          0

          3,966,230

          2,290,399

          5,065,996

          27.73%

          6.29%

          Total General Fund

          $70,634,653

          $74,077,276

          $76,852,377

          $76,153,123

          $80,489,229

          4.73%

          100.00%

          Special Revenue Funds

          Interest Earnings

          0

          0

          6,000

          16,531

          6,000

          0.00%

          0.02%

          Special Assessments

          0

          0

          0

          0

          5,080,000

          100.00%

          14.70%

          Donations

          0

          0

          0

          49,250

          0

          0.00%

          0.00%

          Commercial Paper

          0

          0

          0

          0

          14,450,000

          100.00%

          41.80%

          Interfund Transfers

          0

          2,530,250

          760,200

          1,027,241

          13,880,000

          1725.84%

          40.15%

          Subtotal

          0

          2,530,250

          766,200

          1,093,022

          33,416,000

          4261.26%

          96.67%

          Appropriations from Fund Balance

          0

          0

          299,652

          2,991,465

          1,152,300

          284.55%

          3.33%

          Total Debt Service Funds

          $0

          $2,530,250

          $1,065,852

          $4,084,487

          $34,568,300

          3143.26%

          100.00%


          Debt Service Funds

          Interest Earnings

          100

          0

          999

          0

          0

          -100.00%

          0.00%

          Special Assessments

          777,716

          778,384

          728,113

          752,483

          710,000

          -2.49%

          9.29%

          Bond Proceeds

          0

          58,432,064

          0

          0

          0

          0.00%

          0.00%

          Interfund Transfers

          7,036,813

          7,200,725

          7,115,933

          7,114,433

          6,916,632

          -2.80%

          90.47%

          Subtotal

          7,814,629

          66,411,173

          7,845,045

          7,866,916

          7,626,632

          -2.78%

          99.76%

          Appropriations from Fund Balance

          172,478

          605,667

          0

          0

          18,214

          100.00%

          0.24%

          Total Debt Service Funds

          $7,987,107

          $67,016,840

          $7,845,045

          $7,866,916

          $7,644,846

          -2.55%

          100.00%

          Capital Projects Funds

          Interest Earnings

          584,287

          366,723

          167,738

          241,822

          377,676

          125.16%

          0.80%

          Sales and Use Taxes

          0

          0

          0

          350,847

          500,000

          100.00%

          1.06%

          Grants/Interlocal/Donations

          557,912

          3,115,073

          800,000

          42,001

          7,200,000

          800.00%

          15.33%

          Special Assessment Revenue

          229,988

          238,544

          247,342

          231,827

          258,638

          4.57%

          0.55%

          Loan Proceeds/Contributions

          0

          1,000,000

          5,000

          5,000

          5,000

          0.00%

          0.01%

          Miscellaneous

          9,370

          8,399

          0

          27,016

          0

          0.00%

          0.00%

          Interfund Transfers

          15,940,037

          9,368,393

          9,555,200

          9,555,200

          12,148,324

          27.14%

          25.87%

          Subtotal

          17,321,594

          14,097,132

          10,775,280

          10,453,713

          20,489,638

          90.15%

          43.63%

          Appropriations from Fund Balance

          22,623,403

          25,243,308

          13,706,992

          120,168

          26,468,236

          93.10%

          56.37%

          Total Capital Projects Funds

          $39,944,997

          $39,340,440

          $24,482,272

          $10,573,881

          $46,957,874

          91.80%

          100.00%

          Enterprise Funds

          Charges for Services

          $5,827,203

          $6,096,133

          $6,070,700

          $6,330,921

          $6,627,400

          9.17%

          40.83%

          Interest Earnings

          17,024

          65,492

          13,700

          40,651

          14,000

          2.19%

          0.09%

          Grants/Interlocal/Donations

          0

          0

          50,000

          98,642

          6,571,154

          13042.31%

          40.49%

          Interfund Transfers

          0

          0

          0

          0

          0

          0.00%

          0.00%

          Miscellaneous

          7,603

          14,059

          73,500

          35,298

          0

          -100.00%

          0.00%

          Subtotal

          5,851,830

          6,175,684

          6,207,900

          6,505,512

          13,212,554

          112.83%

          81.41%

          Appropriations from Retained Erngs.

          0

          0

          642,617

          0

          3,017,334

          369.54%

          18.59%

          Total Enterprise Funds

          $5,851,830

          $6,175,684

          $6,850,517

          $6,505,512

          $16,229,888

          136.91%

          100.00%

          Internal Service Funds

          Interest Earnings

          $238,819

          $451,493

          $162,500

          $238,000

          $286,162

          76.10%

          0.98%

          Miscellaneous

          $1,137,065

          $601,444

          $30,000

          $32,473

          $30,000

          0.00%

          0.10%

          Interfund Transfers

          $0

          $0

          $0

          $0

          $12,750,000

          100.00%

          43.55%

          Charges for Services

          $8,667,668

          $9,343,645

          $8,950,870

          $9,054,170

          $8,911,975

          -0.43%

          30.44%

          Subtotal

          10,043,552

          10,396,582

          9,143,370

          9,324,643

          21,978,137

          140.37%

          75.07%

          Appropriations from Retained Erngs.

          0

          0

          5,753,043

          0

          7,298,496

          26.86%

          24.93%

          Total Internal Service Funds

          $10,043,552

          $10,396,582

          $14,896,413

          $9,324,643

          $29,276,633

          96.53%

          100.00%


          68

          Summary of Major Revenues by Fund Type

          FY18 Budget

          FY18 Budget

          to

          FY2018

          FY2015

          FY2016

          FY2017

          FY2017

          FY2018

          FY17 Budget

          %

          Description

          Actual

          Actual

          Budget

          Projected

          Budget

          % Variance

          of Total

          Trust & Agency Funds

          Interest Earnings

          2,289,137

          1,896,271

          2,500,000

          2,500,000

          1,700,000

          -32.00%

          4.98%

          Gain/Loss on Investments

          -11,711,790

          14,443,006

          14,837,114

          14,837,114

          15,436,649

          4.04%

          45.24%

          Miscellaneous

          130,564

          95,807

          82,500

          82,500

          2,500

          -96.97%

          0.01%

          Contributions

          8,152,803

          8,653,545

          10,159,695

          10,159,695

          11,260,070

          10.83%

          33.00%

          Interfund Transfers

          1,577,000

          1,180,000

          3,839,000

          3,839,000

          5,719,016

          48.97%

          16.76%

          Subtotal

          437,714

          26,268,629

          31,418,309

          31,418,309

          34,118,235

          8.59%

          100.00%

          Appropriations from Fund Balance

          26,236,582

          0

          0

          0

          0

          0.00%

          0.00%

          Total Trust & Agency Funds

          $26,674,296

          $26,268,629

          $31,418,309

          $31,418,309

          $34,118,235

          8.59%

          100.00%

          All Funds

          Ad Valorem Taxes

          $43,869,888

          $47,882,187

          $49,494,500

          $50,195,981

          $51,470,500

          3.99%

          20.65%

          Sales and Use Taxes

          8,056,312

          8,061,358

          8,103,000

          8,539,446

          6,650,000

          -17.93%

          2.67%

          Licenses and Permits

          10,657,677

          10,096,672

          7,303,500

          8,240,833

          9,947,975

          36.21%

          3.99%

          Intergovernmental Revenue

          1,102,690

          1,122,466

          1,178,500

          1,028,494

          8,385,450

          611.54%

          3.36%

          Commercial Paper

          0

          0

          0

          0

          14,450,000

          100.00%

          5.80%

          Charges for Services

          18,452,472

          19,571,533

          18,838,120

          19,066,717

          19,483,025

          3.42%

          7.82%

          Fines and Forfeitures

          1,099,526

          1,174,838

          1,255,000

          938,624

          1,138,800

          -9.26%

          0.46%

          Special Assessment Revenue

          1,007,704

          1,016,928

          975,455

          984,310

          6,048,638

          520.08%

          2.43%

          Interest Earnings

          3,726,953

          3,270,081

          3,555,276

          3,461,363

          2,965,696

          -16.58%

          1.19%

          Gain/(Loss) on Investments

          -11,711,790

          14,443,006

          14,837,114

          14,837,114

          15,436,649

          0.00%

          6.19%

          Miscellaneous

          1,497,708

          59,484,671

          531,758

          656,495

          452,500

          -14.90%

          0.18%

          Interfund Transfers

          25,438,850

          21,064,368

          21,955,333

          22,220,874

          51,998,972

          136.84%

          20.86%

          Contribution/Grants

          8,710,715

          12,768,618

          11,014,695

          10,354,588

          17,836,224

          61.93%

          7.15%

          Approp. from Fund Bal/Ret Earngs

          49,227,730

          25,848,975

          24,368,534

          5,402,032

          43,020,576

          76.54%

          17.26%

          Total All Funds

          $161,136,435

          $225,805,701

          $163,410,785

          $145,926,871

          $249,285,005

          52.55%

          100.00%


          This table summarizes by fund type, the major revenue categories indicating category percentages of total fund revenues and percent of change from the prior year.


          image

          FY18 Budget by Revenue Type - All Funds


          Interfund Transfers, 20.9%


          Miscellaneous, 0.2%


          Gain/(Loss) on Investments, 6.2%

          Interest Earnings, 1.2%

          Special Assessment Revenue, 2.4%

          Contribution/Grants, 7.2% Approp. from Fund Bal/Ret

          Earngs, 17.3%

          Fines and

          Forfeitures, 0.5% Charges for Services, 7.8%

          Commercial Paper, 5.8%

          Intergovernmental Revenue, 3.4%


          Licenses and Permits, 4.0%


          Ad Valorem Taxes, 20.6%


          Sales and Use Taxes, 2.7%



          69

          Summary of Expenditure Classifications by Fund Type

          FY18 Budget

          FY18 Budget

          to

          FY2018

          FY2015

          FY2016

          FY2017

          FY2017

          FY2018

          FY17 Budget

          of

          Description

          Actual

          Actual

          Budget

          Projected

          Budget

          % Variance

          % of Total


          General Fund

          Salaries and Wages

          $23,478,696

          $23,581,855

          $24,737,579

          $24,128,637

          $26,001,862

          5.11%

          32.30%

          Employee Benefits

          14,844,270

          15,120,843

          16,909,548

          16,575,852

          16,412,187

          -2.94%

          20.39%

          Contractual

          10,064,496

          10,810,912

          9,432,209

          11,488,978

          9,617,449

          1.96%

          11.95%

          Commodities

          1,518,113

          1,471,130

          1,810,844

          1,844,787

          1,949,093

          7.63%

          2.42%

          Capital Outlay+B81

          75,497

          372,384

          399,307

          474,810

          2,459,607

          515.97%

          3.06%

          Interfund Transfers

          18,477,000

          17,840,832

          22,277,340

          18,710,969

          23,058,146

          3.50%

          28.65%

          Other

          2,176,581

          2,802,168

          1,285,550

          2,929,090

          990,885

          -22.92%

          1.23%

          Subtotal

          70,634,653

          72,000,124

          76,852,377

          76,153,123

          80,489,229

          4.73%

          100.00%

          Transfer to Fund Balance

          0

          2,077,152

          0

          0

          0

          0.00%

          0.00%

          Total General Fund

          $70,634,653

          $74,077,276

          $76,852,377

          $76,153,123

          $80,489,229

          4.73%

          100.00%

          Special Revenue Funds

          Salaries and Wages

          $0

          $0

          $0

          $22,933

          $118,500

          100.00%

          0.34%

          Employee Benefits

          0

          0

          0

          5,482

          21,800

          100.00%

          0.06%

          Contractual

          0

          693,339

          1,065,852

          4,056,072

          21,678,000

          1933.87%

          62.71%

          Interfund Transfers

          0

          0

          0

          0

          12,750,000

          100.00%

          36.88%

          Subtotal

          0

          693,339

          1,065,852

          4,084,487

          34,568,300

          3143.26%

          100.00%

          Transfer to Fund Balance

          0

          1,836,911

          0

          0

          0

          0.00%

          0.00%

          Total Debt Service Funds

          $0

          $2,530,250

          $1,065,852

          $4,084,487

          $34,568,300

          3143.26%

          100.00%

          Debt Service Funds

          Debt Service

          $7,982,457

          $7,976,404

          $7,622,897

          $7,109,860

          $7,624,846

          0.03%

          99.74%

          Deposit to Escrow

          0

          58,630,491

          0

          0

          0

          0.00%

          0.00%

          Other

          4,650

          409,945

          16,500

          9,286

          20,000

          21.21%

          0.26%

          Interfund Transfers

          0

          0

          109,825

          0

          0

          -100.00%

          0.00%

          Subtotal

          7,987,107

          67,016,840

          7,749,222

          7,119,146

          7,644,846

          -1.35%

          100.00%

          Transfer to Fund Balance

          0

          0

          95,823

          747,770

          0

          -100.00%

          0.00%

          Total Debt Service Funds

          $7,987,107

          $67,016,840

          $7,845,045

          $7,866,916

          $7,644,846

          -2.55%

          100.00%


          Capital Projects Funds

          Salaries and Wages

          $101,029

          $113,894

          $142,278

          $143,685

          $169,540

          19.16%

          0.36%

          Employee Benefits

          47,193

          46,260

          64,124

          62,642

          67,510

          5.28%

          0.14%

          Contractual

          12,898

          17,634

          9,500

          12,612

          17,600

          85.26%

          0.04%

          Commodities

          566

          737

          1,600

          2,453

          6,063

          278.94%

          0.01%

          Capital Outlay

          38,823,698

          38,430,752

          22,424,557

          8,860,876

          41,926,623

          86.97%

          89.29%

          Interfund Transfers

          734,613

          731,163

          1,491,613

          1,491,613

          4,486,038

          200.75%

          9.55%

          Other

          0

          0

          348,600

          0

          284,500

          -18.39%

          0.61%

          Subtotal

          39,719,997

          39,340,440

          24,482,272

          10,573,881

          46,957,874

          91.80%

          100.00%

          Transfer to Fund Balance

          225,000

          0

          0

          0

          0

          0.00%

          0.00%

          Total Capital Projects Funds

          $39,944,997

          $39,340,440

          $24,482,272

          $10,573,881

          $46,957,874

          91.80%

          100.00%


          Enterprise Funds

          Salaries and Wages

          $1,177,158

          $1,253,137

          $1,354,465

          $1,276,005

          $1,392,733

          2.83%

          8.58%

          Employee Benefits

          523,960

          580,345

          636,317

          620,710

          656,502

          3.17%

          4.05%

          Contractual

          1,363,785

          1,560,741

          1,845,389

          1,490,525

          1,523,980

          -17.42%

          9.39%

          Commodities

          318,509

          348,485

          500,550

          435,532

          363,970

          -27.29%

          2.24%

          Capital Outlay

          810,577

          721,844

          1,321,629

          1,071,018

          11,341,137

          758.12%

          69.88%

          Debt Service

          202,200

          204,100

          185,967

          185,967

          198,263

          6.61%

          1.22%

          Interfund Transfers

          885,000

          785,000

          685,000

          685,000

          585,000

          -14.60%

          3.60%

          Other

          261,571

          497,330

          321,200

          0

          168,303

          -47.60%

          1.04%

          Subtotal

          5,542,760

          5,950,982

          6,850,517

          5,764,757

          16,229,888

          136.91%

          100.00%

          Transfer to Retained Earnings

          309,070

          224,702

          0

          740,755

          0

          0.00%

          0.00%

          Total Enterprise Funds

          $5,851,830

          $6,175,684

          $6,850,517

          $6,505,512

          $16,229,888

          136.91%

          100.00%


          70

          Summary of Expenditure Classifications by Fund Type

          FY18 Budget

          FY18 Budget

          to

          FY2018

          FY2015

          FY2016

          FY2017

          FY2017

          FY2018

          FY17 Budget

          of

          Description

          Actual

          Actual

          Budget

          Projected

          Budget

          % Variance

          % of Total

          Internal Service Funds

          Salaries and Wages

          $146,433

          $168,691

          $176,386

          $168,382

          $207,095

          17.41%

          0.71%

          Employee Benefits

          4,432,127

          4,520,295

          5,351,911

          4,612,124

          5,665,310

          5.86%

          19.35%

          Contractual

          1,629,278

          1,556,693

          1,724,591

          1,845,309

          1,666,645

          -3.36%

          5.69%

          Commodities

          42,768

          20,637

          5,548

          6,224

          6,687

          20.53%

          0.02%

          Capital Outlay

          1,447,945

          1,472,612

          2,137,977

          2,462,980

          2,980,896

          39.43%

          10.18%

          Interfund Transfers

          119,922

          242

          1,500,000

          0

          14,750,000

          883.33%

          50.38%

          Other

          0

          0

          4,000,000

          0

          4,000,000

          0.00%

          13.66%

          Subtotal

          7,818,473

          7,739,170

          14,896,413

          9,095,019

          29,276,633

          96.53%

          100.00%

          Transfer to Retained Earnings

          2,225,079

          2,657,412

          0

          229,624

          0

          0.00%

          0.00%

          Total Internal Sevice Funds

          $10,043,552

          $10,396,582

          $14,896,413

          $9,324,643

          $29,276,633

          96.53%

          100.00%


          Trust & Agency Funds

          Salaries and Wages

          $94,253

          $121,438

          $129,584

          $127,294

          $133,896

          3.33%

          0.39%

          Employee Benefits

          2,103,829

          2,299,072

          2,315,187

          2,373,588

          2,078,115

          -10.24%

          6.09%

          Contractual

          24,476,214

          18,829,846

          19,627,577

          18,612,443

          20,359,977

          3.73%

          59.67%

          Subtotal

          26,674,296

          21,250,356

          22,072,348

          21,113,325

          22,571,988

          2.26%

          66.16%

          Transfer to Fund Balance

          0

          5,018,273

          9,345,961

          10,304,984

          11,546,247

          23.54%

          33.84%

          Total Trust & Agency Funds

          $26,674,296

          $26,268,629

          $31,418,309

          $31,418,309

          $34,118,235

          8.59%

          100.00%

          Total: All Funds

          Salaries and Wages

          $24,997,569

          $25,239,015

          $26,540,292

          $25,866,936

          $28,023,626

          5.59%

          11.24%

          Employee Benefits

          $21,951,379

          $22,566,815

          $25,277,087

          $24,250,398

          $24,901,424

          -1.49%

          9.99%

          Contractual

          37,546,671

          33,469,165

          33,705,118

          37,505,939

          54,863,651

          62.78%

          22.01%

          Commodities

          1,879,956

          1,840,989

          2,318,542

          2,288,996

          2,325,813

          0.31%

          0.93%

          Capital Outlay

          41,157,717

          40,997,592

          26,283,470

          12,869,684

          58,708,263

          123.37%

          23.55%

          Deposit to Escrow

          0

          58,630,491

          0

          0

          0

          0.00%

          0.00%

          Debt Service

          8,184,657

          8,180,504

          7,808,864

          7,295,827

          7,823,109

          0.18%

          3.14%

          Interfund Transfers

          20,216,535

          19,357,237

          26,063,778

          20,887,582

          55,629,184

          113.43%

          22.32%

          Transfer to Fund Bal/Ret Earnings

          2,759,149

          11,814,450

          9,441,784

          12,023,133

          11,546,247

          22.29%

          4.63%

          Other

          2,442,802

          3,709,443

          5,971,850

          2,938,376

          5,463,688

          -8.51%

          2.19%

          Subtotal All Funds

          $161,136,435

          $225,805,701

          $163,410,785

          $145,926,871

          $249,285,005

          52.55%

          100.00%


          image

          FY18 Budget by Expenditure Classification All Funds


          Transfer to Fund Bal/Ret Earnings 4.6%


          Interfund Transfers 22.3%


          Other 2.2%


          Salaries and Wages 11.2%

          Employee Benefits 10.0%


          Debt Service

          3.1% Deposit to

          Escrow 0.0%


          Capital Outlay 23.6%

          Contractual 22.0%


          Commodities 0.9%


          71


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          72


          Town of Palm Beach


          image


          Reserve Analysis

          Town of Palm Beach Reserves

          The Town Council has adopted eighteen financial policies, fifteen of which address reserves. The reserve policies serve to safeguard the Town’s financial resources and ensure fiscal stability. The size of a municipality’s fund balance can affect its ability to withstand financial emergencies. Reserves can also be used to accumulate funds for capital purchases or capital projects without having to borrow.


          Unassigned Fund Balance - General Fund


          image

          Pursuant to adopted policy, the unassigned fund balance for the General Fund is to be maintained at a minimum level of 25% of current

          year General Fund budgeted expenditures. This minimum level is to be maintained to protect the Town against economic downturns, temporary revenue shortfalls, unpredicted one-time expenditures, and for tax rate stabilization purposes. Twenty-five percent of the FY17 General Fund operating budget (General Fund budget less CIP, coastal and extraordinary retirement transfer) is $16,199,294. The FY16 ending fund balance was $21,615,082. The unassigned fund balance exceeds the minimum requirement by $5,415,788.


          The General Fund Undesignated Fund Balance has consistently exceeded the required minimum level of 25%. The chart details the General Fund Undesignated Fund Balance and the percent of budgeted expenditures the balance represents.


          In FY16, the Town Council authorized the transfer of $2,530,250 to begin to fund the underground utility project. In addition, contained in the FY17 budget is a extraordinary transfer of $2,500,000 to the Retirement Fund to begin to reduce the UAAL. The fund balance amount of $21,615,082 is net of these two transfers.


          Reserves - Risk Fund


          image

          The total reserve balance for the Risk Fund was

          $8,458,781 as of September 30, 2016. Out of this reserve balance, the Town funds the Reserve for Catastrophic Exposures/Emergencies - Risk Fund in the amount of $2,500,000 and the Contingency Reserve for $500,000. The trend for the Risk Fund Reserve is shown in the table. In 2014 the Town Council approved a transfer of $2,000,000 from the reserves of the Risk Fund to the Coastal Protection Fund.


          73

          Reserve for Catastrophic Exposures/Emergencies - Risk Fund


          The Reserve for Catastrophic Exposures/Emergencies for the Risk Fund is funded at a minimum of $2,500,000. This reserve was established to set aside emergency funds to protect the Town against the potential financial impacts large judgments in excess of insurance coverage and the financial impacts of response to and recovery from a man-made or natural emergency situation. In addition, the reserve can be used in response to increases in premium rates and/or loss fund increases. This reserve is funded with a budget appropriation from the Net Asset reserves of the Risk Fund.


          Recreation Enterprise Fund Reserves


          image

          The Recreation Enterprise Fund reserve is to be maintained at a minimum level of 25% of budgeted revenues totaling $1,551,975 for FY17. The purpose of the reserve is to provide an adequate level of net assets for unanticipated financial impacts as well as to provide for one- time expenditures to improve the facilities.


          The Town’s enterprise fund includes the operations of the Town Docks, the Par 3 Golf Course, tennis activities and youth and adult recreation programs.


          At the end of FY16, the net asset balance for the Recreation Enterprise Fund (REF) was

          $4,999,782. Separate reserves have been set aside from this amount for the dock replacement, Par 3 Improvements, tennis improvements and equipment replacement.


          At the end of FY16, $3,356,781 had been set aside in the Dock Replacement Reserve. The Dock Replacement reserve was created to fund the replacement cost of the construction of the Town’s docks whenever it is determined they must be replaced. The replacement reserve is to be maintained at 100% of accumulated depreciation plus accumulated interest earned on the reserve. In FY16, the Town committed to lowering the transfer to the General Fund each year by $100,000 and add these funds each year to the Dock Replacement Reserve.


          The Par 3 Golf Course charges an additional $2 per round to fund a maintenance and improvement reserve. At the end of FY16, the balance is $388,132.


          In FY15, the Town established a Maintenance and Improvement fund for the Par 3 Clubhouse. This reserve is funded each year based on 50% of the net income from the operations of the Par 3 Golf Course. At the end of FY16, the balance is $327,485.


          In FY10, a maintenance and improvement fee was implemented for the Tennis program. This reserve at the end of FY16 is $53,852 and has been set aside for improvements to the tennis centers.


          74

          The Recreation Enterprise Fund’s equipment replacement reserve allows for the purchase of capital equipment and is funded with accumulated replacement cost depreciation from Recreation Net Assets. The balance in the REF Equipment Replacement Fund for FY16 is

          $583,475.


          Equipment Replacement Fund


          image

          The Town-wide Equipment Replacement Fund is intended to fund the replacement cost of existing equipment, vehicles and computers when they reach the end of their useful life. This reserve significantly reduces the budgetary fluctuations due to purchases of large pieces of equipment and ensures compliance with the

          fixed asset inventory and depreciation schedule required by GASB34.


          The balance in the Equipment Replacement Fund Reserve for year-end FY16 is

          $14,918,663. In FY13, the Town Council approved the use of up to $4,867,019 from this reserve for internal financing for small underground utility projects financed by special assessments. To date, a balance of

          $1,354,221 remains available. In FY14, the Town Council authorized a transfer of

          $2,858,913 in excess reserves to the coastal protection fund.


          For FY17, income including the depreciation transfer will total $2,414,133 and expenditures for capital equipment are budgeted at $2,135,219.


          Designation of General Fund Balance for Payment of Liability Related to Compensated Absences Leave Balances


          A Reserve for Compensated Absences reduces the budgetary fluctuations due to the payout of accrued leave time to employees when they leave Town service. This reserve is funded at a rate of 100% of the fiscal year end accrued leave balances. Funds are appropriated annually from this reserve based upon estimates of pay-outs of eligible accrued vacation, sick and compensatory time and the related payroll tax liability. The balance in the reserve as of September 30, 2016, was $3,061,180. The FY17 appropriation for the pay-out of eligible accrued vacation, sick and compensatory time from this reserve is $505,930.


          image

          Health Insurance Reserve


          The balance of the reserve in the Health Fund at the end FY16 is $6,507,339. These reserves guard against any deficiencies in the Town’s self- insurance health fund for active employees’ insurance expenditures. The trend in the reserve balance is shown in the chart. Since FY13, the Town has maintained level funding of health insurance benefits due to good claims experience and the wellness program. These reserves have

          also provided cushion in case claims unexpectedly increase.


          75

          Capital Improvement Fund


          image

          For many years, the Town funded all of the capital infrastructure improvements through pay-as-you-go financing. In 2010, the Town issued the first of two bonds for capital improvements to accelerate many large scale capital improvement projects identified in the 20 year plan. Since 2012, the Capital Improvement Fund transfer from the General Fund was reduced to $1,000,000. In FY17, the transfer was increased to $2,290,200 to begin to build up the reserves for projects once the bond proceeds have been spent. Once the bond proceeds have been spent on the remaining projects, it is proposed to return to pay-as-you-go financing.


          OPEB (Other Post Employment Benefits) Trust


          image

          The Town’s OPEB Trust Fund was established in 2007 to comply with GASB Statements 43 and 54, which required the establishment of a liability for actuarially determined costs of retiree health benefits. This fund’s investments are overseen by the Town’s Investment Advisory Committee. The net asset balance in this trust is $28,401,183 as of September 30, 2016. The actuarially determined transfer from the General Fund for the OPEB liability for FY17 is $1,339,000. The Town continues to be well ahead of other government agencies in funding this liability.


          image

          Retirement Fund


          The Town provides pension benefits for General Employees, Lifeguards, Police Officers, and Firefighters. The funds were separately managed by 3 pension boards until the consolidation on April 1, 2012, into the Employee’s Retirement Fund.

          The Retirement Board oversees all of the Town’s pension assets and retirement programs. The net assets of the consolidated retirement fund at the end of FY16 were $194,010,680. The decline from FY14 to FY15 was due to investment losses.


          Contingency Reserves


          Contingency reserves were established for the General Fund, Capital Fund, Equipment Replacement Fund, Recreation Enterprise Fund, Risk Insurance Fund and Health Insurance Fund to provide for unanticipated unbudgeted expenditures of a nonrecurring nature. The amount of the General Fund Contingency has been funded at 1.5% of the FY17 operating budget. The Capital Fund Contingency is appropriated at 10% of the capital budget, while the


          76

          Equipment Replacement Fund, Risk, and Health Contingency Reserves are appropriated at

          $500,000 each. The Recreation Enterprise Fund Contingency is funded at 5% of the operating expenses. All of the contingency reserves are annually appropriated in the budget process from the net asset reserves of each of the funds. Amounts from the contingency are appropriated for expenditures through an affirmative vote of the Town Council.


          The table below identifies the contingency budgets and actual expenditures for the fiscal years 2013 through YTD 2017.

          Contingency Reserves FY2013 – FY2017


          Contingency

          2013

          2014

          2015

          2016

          YTD2017

          General Fund Budget General Fund Actual

          843,000

          556,668

          860,000

          356,300

          909,000

          246,361

          944,686

          764,145

          960,300

          171,902

          CIP Budget CIP Actual

          201,000

          201,000

          205,000

          -0-

          205,000

          205,000

          208,000

          208,000

          348,600

          -0-

          ERF Budget ERF Actual

          500,000

          156,528

          500,000

          136,869

          500,000

          -0-

          500,000

          29,111

          500,000

          -0-

          Risk Budget Risk Actual

          500,000

          -0-

          500,000

          -0-

          500,000

          -0-

          500,000

          -0-

          500,000

          -0-

          Health Budget Health Actual

          500,000

          -0-

          500,000

          -0-

          500,000

          -0-

          500,000

          -0-

          500,000

          -0-

          Recreation Budget Recreation Actual

          235,600

          35,000

          249,220

          -0-

          272,100

          39,000

          285,300

          135,030

          321,200

          -0-


          Unassigned Net Position


          image

          All reserves are at or over the policy established minimum. The financial strength of the Town can be measured by the health of its reserves. Bond rating agencies look closely at the reserve levels and the financial policies in place when rating a municipality. In 2010, 2013, and 2016 the rating agencies reviewed the Town’s credit ratings in preparation for the issuance of the 2010, 2013 and 2016 Bonds. They cited the Town’s healthy reserves, solid fiscal policies, and conservative management practices as some of the reasons for our exceptional bond ratings.

          Moody’s Investors Service gave the Town an Aa1 for the Revenue Bonds and confirmed the Town’s Aaa issuer credit rating. Standard and Poor’s issued a AA+ credit rating on the Revenue bonds confirmed the Town’s issuer credit rating of AAA. These Revenue Bond ratings and issuer credit ratings are the highest ratings these two services issue and represent the highest quality investment grade debt.


          The table and the chart on the following page summarize the trend of the unassigned net position, compensated absence, and replacement reserve balances for fiscal year ending FY12 through FY16.



          77

          Reserve Balances Fiscal Years 2012 – 2016


          Fund

          2012

          2013

          2014

          2015

          2016

          General Fund

          21,424,261

          20,043,760

          22,298,680

          22,267,051

          21,615,082

          Compensated Absence (GF)

          3,315,135

          3,390,226

          3,456,532

          3,168,789

          3,061,180

          Equipment Replacement Fund

          14,870,188

          12,625,048

          12,232,932

          13,304,714

          14,918,663

          Recreation Enterprise Fund

          707,381

          486,466

          1,025,665

          179,645

          169,291

          Recreation ERF

          397,132

          472,319

          472,319

          584,638

          583,475

          Dock Replacement

          2,395,723

          2,551,321

          2,715,680

          2,880,038

          3,356,781

          Par 3 M&I Reserve

          162,138

          212,375

          279,252

          351,246

          388,132

          Tennis M&I reserve

          23,867

          31,075

          38,459

          46,320

          53,852

          Par 3 Clubhouse M&I

          0

          0

          0

          147,602

          327,485

          Capital Improvement