þÿ


TOWN OF PALM BEACH, FLORIDA


COMPREHENSIVE ANNUAL BUDGET FISCAL YEAR 2017

(October 1, 2016 - September 30, 2017)


Mayor and Town Council


Gail L. Coniglio, Mayor

Michael J. Pucillo, Town Council President Richard M. Kleid, Town Council President Pro-Tem

Bobbie Lindsay, Town Council Member Danielle H. Moore, 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

image

TOWN OF PALM BEACH

image

ORGANIZATIONAL STRUCTURE


CITIZENS OF PALM BEACH

CITIZENS OF PALM BEACH

ELECT


image

MAYOR

Gail L. Coniglio


image

TOWN COUNCIL


PRESIDENT

Michael J. Pucillo

PRESIDENT PRO-TEM

Richard M. Kleid

Bobbie Lindsay

Danielle H. Moore Margaret A. Zeidman

PRESIDENT

Michael J. Pucillo

PRESIDENT PRO-TEM

Richard M. Kleid

Bobbie Lindsay

Danielle H. Moore Margaret A. Zeidman

image

APPOINTS


TOWN ATTORNEY

John C. Randolph


TOWN MANAGER

Thomas G. Bradford

ADVISORY BOARD AND COMMISSIONS


DIRECTOR OF RECREATION

Beth Zickar

DIRECTOR OF RECREATION

Beth Zickar

DEPUTY TOWN MANAGER

Jay Boodheshwar


DIRECTOR OF PUBLIC SAFETY

Kirk W. Blouin

DIRECTOR OF PUBLIC WORKS

H. Paul Brazil


DIRECTOR OF PLANNING, ZONING AND BUILDING

John Page

DIRECTOR OF PLANNING, ZONING AND BUILDING

John Page

DIRECTOR OF

Human Resources Danielle Olson


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.


A STEP BY STEP GUIDE

A STEP BY STEP GUIDE


image

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.


********************

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.

image

The Government Finance Officers Association of the United States and Canada (GFOA) presented an award of Distinguished Presentation to the Town of Palm Beach for its annual budget for the fiscal year beginning October 1, 2015.


In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device.


The award is valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award.


Official-colored-seal.jpg


(This page intentionally left blank)

Introduction

Budget Message 1

Strategic Planning and Key Results Measurement 16

Introductory Information

Map 23

Town Overview/Demographics 24

Assessed Valuation and Millage Rate 25

Town History 29

Financial Policies 31

Budget Preparation Process 36

Budget Calendar 41

Financial Structure 42

Long Term Financial Plan Forecast 47

Budget Summary

Fund Budget Overview 61

Budget Summary by Fund Type, Revenues and Expenditures 62

Summary of Major Revenues by Fund Type 64

Summary of Expenditure Classifications by Fund Type 66

Reserve Analysis 69

Capital Expenditures 75

General Fund

General Fund Revenues and Expenditures Budget Comparison 77

Revenues

General Fund Revenues 79

Major Revenue Sources 83

Expenditures

General Fund Expenditures 93

Legislative

Legislative (111) 98

General Government

General Government (113) 100

Town Manager

Town Manager’s Office Organization Chart 102

Administrative Management (121) 104

Records Management (131) 105

Advice and Litigation

Advice and Litigation (122) 108

Information Technology

Information Systems (125) 110

Human Resources

Human Resources Organization Chart 114

Human Resources (123) 117

Finance

Finance Organization Chart 124

Finance Department Revenue and Expenditure Summary 126

Financial Management (141) 127

Purchasing (144) 130

Planning, Zoning and Building

Planning, Zoning and Building Organization Chart 134

Planning, Zoning and Building Department Revenue and Expenditure Summary 136

Planning and Zoning (211) 138

Permit Issuance (212) 141

Inspection and Compliance (213) 144

Landmarks Preservation (214) 146

Fire Prevention (215) 148

Code Enforcement (216) 150

Fire-Rescue

Fire-Rescue Department Organization Chart 154

Fire-Rescue Department Revenue and Expenditure Summary 157

Fire Administration (411) 159

Operations (417) 161

Training (418) 164

Ocean Rescue (419) 166

Police

Police Department Organization Chart 170

Police Department Revenue and Expenditure Summary 173

Administrative Management (421) 175

Organized Crime Vice and Narcotics – OCVAN (422) 178

Records Information System Unit (423) 180

Training and Community Relations Unit – TCR (424) 182

Communications Unit (425) 186

Crime Scene/Evidence Unit (426) 188

Patrol (428) 190

Criminal Investigation Unit (429) 194

Parking Control Unit (430) 196

Public Works

Public Works Department Organization Chart 200

Public Works Department Revenue and Expenditure Summary 205

Administrative Management (511) 207

Street Repair and Maintenance (521) 208

Traffic Control (523) 210

Street Lighting (524) 212

Storm Sewer Maintenance (531) 214

Sanitary Sewer Maintenance (532) 217

Sanitary Sewage Treatment (533) 220

Residential Collection (541) 221

Commercial Collection (542) 223

Refuse Disposal (543) 224

Yard Trash Collection (544) 225

Recycling (545) 227

Beach Cleaning (546) 229

Landscape Maintenance (551) 230

Facility Maintenance (554) 232

Meter Maintenance and Collection (558) 234

General Engineering Services (561) 235

Right of Way Inspections (565) 237

Equipment Operation and Maintenance (571) 238

Coastal Management (581) 240

Other

Library Services (321) 244

Transfers to Other Funds (611 to 625) 245

Emergency Management (710) 246

Contingent Appropriations (711) 247

Special Revenue Fund

Town-wide Underground Utilities Fund 249

Debt Service

Debt Administration 251

2010A and 2013 Revenue Bonds (Fund 205) 256

2010B Worth Avenue Revenue Bond (Fund 206) 257

Capital Funds

Capital Funds 259

Impact of Capital Investments on Operating Budget 260

Capital Improvement Fund (Fund 307)

Five Year Capital Improvement Pay-as-you-go/Facilities Program 263

Pay-as-you-go Capital Improvement Fund 264

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

CCMP FY16 Accomplishments and FY17 Action Plan 265

Comprehensive Coastal Management Project Fund 277

Coastal Management Program Budget 279

Worth Avenue Assessment District (Fund 311)

Worth Avenue Maintenance 281

Accelerated Capital Fund (Fund 314)

2013 Accelerated Capital Projects Fund 283

Accelerated Capital Improvement Program Budget Report 284

Project Fact Sheets

Recreation Enterprise Fund (Fund 403)

Recreation Enterprise Fund Organization Chart 298

Recreation Enterprise Fund Revenue and Expenditure Summary 300

Marina 302

Golf Course 307

Tennis 313

Recreation Center 318

Administration 322

Capital Program 323

Five Year Capital Improvement Plan 324

Depreciation Program 325

Equipment Replacement 326

Internal Service Funds

Self Insurance – Risk

Self Insurance Fund – Risk Management (Fund 501) 327

Self Insurance – Health

Self Insurance Fund – Health Benefit (Fund 502) 330

Equipment Replacement Fund

Equipment Replacement Fund (Fund 320) 333

Trust and Agency Funds

Retirement Fund 337

Employees Retirement System (Fund 600)

Employees Retirement Fund 343

Health Insurance Trust (Fund 610)

Health Insurance Trust 345

Retiree Sliding Scale Insurance Premium Rates 2017 349

Appendix

Authorized Positions 353

Donation Reserve Account Summary 358

Financial Policies

Fund Balance 359

Contingency Reserve – General Fund 365

Designation of General Fund Balance - Liability Related to Compensated Absences Leave Balances 366

Reserve for Encumbrances, Continuing Appropriations, and Prepaid Expenses 367

Contingency Reserve – Capital Fund 368

Equipment Replacement Reserve 369

Contingency Reserve – Equipment Replacement Fund 370

Recreation Enterprise Fund Reserve 371

Dock Replacement Reserve – Recreation Enterprise Fund 372

Contingency Reserve – Recreation Enterprise Fund 373

Contingency Reserve – Recreation Enterprise Fund – Capital Fund 374

Equipment Replacement Reserve – Recreation Enterprise Fund 375

Recreation Enterprise Fund – Maintenance and Improvement Reserves 376

Reserve for Catastrophic Exposures/Emergencies – Risk Fund 377

Contingency Reserve – Risk Fund 378

Contingency Reserve – Health Insurance Fund 379

Budgetary Control 380

Debt Management Policy 381

Revenue Shortfall Plan 382

Index

Index… 393

Glossary

Glossary 399

image

TOWN OF PALM BEACH


October 1, 2016


Honorable Mayor, Town Council

and Citizens of the Town of Palm Beach


Submitted herewith is the Annual Budget and Financial Plan for the Town of Palm Beach for the fiscal year commencing October 1, 2016 (FY17). Expenditures from all operating, capital projects, and debt service funds, are expected to total $163,410,785. This budget is of note in that the property tax rate providing revenue to the General Fund is recommended to be reduced to (3.2706), a 3.18% millage rate decrease or a savings of $79 per $1 million of taxable value for the homesteaded property owner. The estimated taxable value for FY17 from the Property Appraiser is $15,929,537,770, 8.84% over FY16. In preparing the budget, staff has tried to adequately address the needs of the Town, while at the same time minimizing the impact to Town taxpayers.


This budget was prepared keeping five important concepts foremost: 1) that the budget is a policy document and must facilitate understanding and policy analysis by elected officials and the general public; 2) the level of service that the Town provides its residents and visitors should not be compromised; 3) the plan for routine replacement of major capital assets must be maintained; 4) the long range plan for funding capital improvements must be continued; and 5) unassigned fund balances should be maintained at sufficient levels.


The Annual Budget and Financial Plan for the Town of Palm Beach covers the funds which are reviewed herein in the following order:

  1. General Fund

  2. Debt Service Fund

  3. Capital Improvement Fund

  4. Coastal Management Fund

  5. Accelerated Capital Improvement Program Fund

  6. Recreation Enterprise Fund

  7. Internal Service Funds

  8. Trust Funds


Budget Format


This letter of transmittal is designed to provide for understanding and policy analysis of the FY17 budget for the elected officials and public. The Annual Budget Document provides additional detailed information for all revenue and expenditure categories and has been prepared in a program format. Each program contains historical and FY17 expenditure



1

information and a narrative description of what services are provided. In this way, elected officials are able to understand and concentrate on the very important policy questions necessary to consider when reviewing the annual budget such as: Is this the level of service that citizens expect? Are taxpayers willing to pay the cost of providing this level of public service? How are the long-term capital and financial needs being addressed?


General Fund


The General Fund is the primary operating fund of the Town. It is the only fund which directly utilizes ad valorem (property) taxes as a revenue source. The millage rate is 3.2706 which is less than the FY16 rate of 3.3779 representing a 3.18% millage rate decrease.


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 millage rate is 4.66% over the rolled back rate of 3.1249.


General Fund expenditures increased by 6.87% over FY16. This increase includes a transfer of $2,290,200 transfer to the Capital Improvement Fund, an increase of $1,260,200, and an extraordinary transfer of $2,500,000 to the Retirement Fund to improve the funding levels. The General Fund departmental operating budget, before transfers, increased by 3.82% over FY16.


Highlights of the FY17 budget include:


  1. Based upon the Property Appraiser's Certification issued July 1, 2016, existing property taxable values in the Town have risen 8.84% over the prior year.

  2. No additional positions have been included in the budget.

  3. Merit pay increases are included in the budget for those employees performing at or above expectations and who have not reached the top of their pay range, as well as a 2% increase in the pay ranges.

  4. The increase in defined benefit (DB) pension benefits is due to the lower investment returns in FY15 for the pension fund and additional funding for the State mandated mortality tables. The DB amount reflects the changes to the non-union public safety pension benefits which did not increase the overall pension cost for FY17, but includes the transfer of the employer’s estimated non-union public safety defined contributions (DC) to the retirement fund.

  5. The DC total includes the Town discretionary 4% increase for a total of an 8% Town match to General Employee and Lifeguard’s contributions.

  6. An extraordinary transfer from the Town’s General Fund unassigned fund balance to the Retirement Fund of $2,500,000 has been included in the budget to begin to reduce


    2

    the unfunded liability of the Retirement Fund.

  7. Funding for Health Insurance has remained flat for FY17 and is in keeping with the findings of our consultant Willis and excellent claims experience.

  8. Additional Funding of $1,260,200 has been included for the transfer to the Capital Improvement Fund. A portion ($500,000) of the increase is to begin to build up reserves for future capital projects once the 2013 bond proceeds have been spent. The balance, $760,200, is to fund Underground Utility items discussed later in this document.


    Revenues

    In the General Fund, total revenues are expected to increase by $4,938,046 (6.87%) from the adopted FY16 budget. The changes by revenue type are shown on the table below:



    Revenue


    FY16


    FY17

    FY16 vs.

    FY17

    Difference

    %

    Change

    Ad Valorem Taxes

    $47,131,000

    $49,494,500

    $2,363,500

    5.01%

    Non Ad Valorem Taxes

    5,845,000

    5,903,000

    58,000

    0.99%

    Licenses & Permits

    9,320,320

    9,560,500

    240,180

    2.58%

    Intergovernmental

    1,135,437

    1,178,500

    43,063

    3.79%

    Charges for Services

    3,867,388

    3,816,550

    -50,838

    -1.31%

    Fines and Forfeitures

    1,284,000

    1,255,000

    -29,000

    -2.26%

    Investment Earnings

    700,000

    704,339

    4,339

    0.62%

    Miscellaneous

    266,600

    288,758

    22,158

    8.31%

    Interfund Transfers

    785,000

    685,000

    -100,000

    -12.74%

    Transfers For Contingency and Compensated Absences


    1,579,586


    3,966,230


    2,386,644


    151.09%

    Total Revenues

    $71,914,331

    $76,852,377

    $4,938,046

    6.87%


    Ad Valorem Revenue

    The FY17 budget contains an increase in property tax revenues of 5.01% sufficient to cover increases in operating expenses and an additional $1,260,200 transfer to the Capital Improvement Fund. The FY17 millage rate provides a tax decrease of $79 per $1 million of taxable value for homesteaded property owners.


    3

    Non Ad Valorem Revenue

    Total non ad valorem revenues (excluding transfers of fund balance) are anticipated to increase by $187,902 from the FY16 revenue budget. The differences by revenue type are described in detail, as follows:


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 FY17 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 decreased $750,220.

Recreation Enterprise Fund (403)


The Recreation Enterprise Fund (REF) comprises all municipal recreational activities and facilities in the Town, including the Par 3 Golf Course, the Seaview Park and Phipps Ocean Park Tennis Centers, the Recreation Center, and the Town Docks.


Revenue


Staff is projecting an increase in recreation revenue of 7.1% from the FY16 budget. Tennis revenue projections are slightly higher for FY17. The focus will remain on increasing participation and no fee increases were requested; however, Town Council approved a new tennis teaching contractor which structure features an anticipated increase in Town income. Tennis has experienced increases in participation in recent years and this trend is expected to continue. The cost recovery goal is expected to be achieved through continued budget control measures and enhanced revenue opportunities.


10

Recreation Center revenue projections have been adjusted to more accurately reflect predicted income and the anticipated closing of the current Recreation Center for the building of the new community center. 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. Modest and strategic fee increases to individual activities will be in effect for the upcoming fiscal year.


Town Dock revenues are expected to increase. Town Council approved fee changes for annual, seasonal and transient customers. These include dockage rate increases of 3% for annual and seasonal leases for slip sizes up to 130 feet with 100 amp single phase power and 5% for slip sizes up to 262 feet with 3 phase power. Increases were also approved for transient rates, ranging from 3% to 8%, depending upon the size of the slip and the power supply provided. The overall increases should not affect our place in the market, and should not hinder our pursuit of achieving our cost recovery goals.


Golf Course revenue projections are expected to increase during FY17. Town Council approved fee increases to the three sizes of buckets for range balls, and the 10 large bucket program. (However, the size of each bucket will increase slightly to offset this additional expense.) Also approved was the change to the Maintenance & Improvement Fees (M&I). Town Council has approved the recommendation to increase the M & I fee by $1 in the winter and shoulder season and $2 for the summer season, for nonresidents and resident guests/hotel partners. The M & I fee for residents during the summer season will increase by $1.00, however, the summer resident green fees have been decreased by the same amount per round, so as to keep resident overall costs for a round of golf unchanged. The resident change will result in a redistribution of funds collected and will also keep the M & I fee for residents consistent throughout the year. The demand for tee times indicates these increases to fees will be tolerated and not affect play and the Par 3’s place in the market. Also, it is expected that the food and beverage operations in the clubhouse will continue to show growth during the 2017 fiscal year.


Expenditures


The FY17 REF budget represents an overall increase of 5.6% from the FY16 budget. The Administration Section will exhibit an increase due to personnel adjustments (the Director’s position will be filled for a complete fiscal year, causing an increase in Salaries and Wages and Employee Benefits). The Tennis Programs and Facilities budget will see an increase from FY16 due mostly to cost of merchandise to be sold in the pro shop, while the Recreation Center budget is slightly lower than FY16 due to staff redistribution. The Par 3 Golf Course and the Marina are both showing increases in operating expenses. The Par 3 expenditure growth can be attributed to additional building and course maintenance costs. The rise in the Docks budget is primarily due to the anticipated increase in security costs. The transfer of fund profits to the General Fund is budgeted at $685,000, a decrease of $100,000 from FY16. The


11

decrease is designated for the dock replacement reserve in order to increase the funding for the future replacement of the Town docks.


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 $96,558 (-4.99%) from FY16 to FY17. The decrease is related to reductions in the fixed costs for liability and property insurance.


The employer contribution for FY17 to the Health Insurance Fund (502) has remained the same as in FY16 due to savings realized from the wellness program and favorable claims experience.


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 FY17 is $2,298,133. This amount represents an increase of $190,814. In FY17, the total expenditures for equipment purchases will be $1,868,219. 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 FY17 actuarially determined contribution to the DB plan originally totaled $7,708,771. Due to the non-union public safety pension changes the amount now totals $8,087,085, the difference is offset by using the non-union DC contributions, which exceed funding required, but will remain in the fund to improve the unfunded status.

As mentioned earlier, a transfer of $2,500,000 was approved by the Town Council from the General Fund unassigned fund balance to the Retirement Fund as a supplemental Town contribution to reduce the unfunded liability. This amount represents 9.12% of the total amount needed to obtain 80% funded status ($27,426,310). The Retirement Fund assets represent a 70.5% funded ratio. A funded ratio of 80% to 90% is considered above average by Standard and Poor’s.


The Town annual contribution comparison for FY16 vs. FY17 is shown in the table on the following page:


12

Town Defined Benefit Contribution


FY16

FY17

$ Change

% Change

General Employees

$2,049,839

$2,414,960

$365,121

17.8%

Lifeguards

160,770

163,443

2,673

1.7%

Police

2,306,795

2,832,558

525,763

22.8%

Firefighters

2,359,519

2,676,124

316,605

13.4%

Subtotal

$6,876,924

$8,087,085

1,210,161

17.6%

Less: Prepaid Contribution

(488,633)

0

488,633

100.0%

Amount included in Budget

$6,388,291

$8,087,085

$1,698,794

26.6%


The Town contributes a required match of up to 4% to the Defined Contribution (DC) plan. Contributions to the DC plan began with the implementation of the hybrid plan on May 1, 2012. In addition, the Town Manager may recommend and the Town Council may approve an additional discretionary contribution of up to 4% per year, to be decided each year depending upon economic and budgetary conditions. For FY17, the Town Manager recommended and the Town Council approved a 4% discretionary DC contribution at a cost of $468,673 for General Employees and Lifeguards. Non-union public safety officers will not be participating in the defined contribution program beginning in FY17. Union firefighters are not eligible for the discretionary match. Total employer contributions to the DC plan are shown in the chart below:


Employer Defined Contribution Funding


FY12

Actual

FY13

Actual

FY14

Actual

FY15

Actual

FY16

Budget

FY17

Budget

General

$123,785

$334,252

$699,122

$756,792

$861,483

$923,990

Lifeguards

2014

5,458

10,943

12,410

14,789

13,357

Police

43,163

104,787

265,191

294,148

321,688

0

Fire-Rescue

47,748

128,627

174,650

154,893

203,975

92,610

Total

$216,710

$573,124

$1,149,906

$1,218,243

$1,401,935

$1,029,957


Health Insurance (OPEB) Trust (610)


The actuarially determined transfer to the OPEB trust from the General Fund in the FY17 budget is $1,339,000. This amount is $159,000 (13.47%) more than FY16. The increase


13

is due to the reduction in the investment assumption from 8% to 7.5%. 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.


Looking Ahead


It is our expectation that property value growth will slow to a more stable rate for next year. Since 2000 the average rate of growth has been 6.9%. We expect the growth rate for FY17 to be closer to this average rate.


It is staff’s intent during the upcoming year to review and implement the following initiatives:


Inventory of Assets


The estimated inventory of parts, supplies, fuel and materials on hand as of October 1, 2016, was $423,144 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

$20,183,086.


Financial Policies


The Town has 19 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).


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


14

Acknowledgements


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,



þÿ

Thomas G. Bradford Town Manager

cc: Department Directors

Jay Boodheshwar, Deputy Town Manager


15


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 FY17.


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.


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.


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:


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.


The Vision/Strategic Plan/Goals and Performance Measurement Process


image


Townwide Budget Priorities for FY2017


The Town Council’s annual budget priorities for FY2017 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 FY2017 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 of financing plan working with the Underground Utilities Task Force, engineering/design consultant’s construction plan, cost estimates, and financial advisors to develop the financing plan with anticipated issuance of GO Bonds prior to the first phase of construction estimated to be May of 2017. Monitor long term interest rates in order to move quickly if rates begin rising.

Department

Department Goals

Finance

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

Town Council Priority #2

Explore all methods available to develop and retain future leaders in Public Safety, including modifications to pension benefits, mentoring programs, and evaluating current compensation packages.

Department

Department Goals

Police

  • Develop and maintain an organizational environment that is professionally rewarding, challenging and that promotes leadership succession to address the future challenges of the police department.

Fire-Rescue

  • To prepare upcoming leaders for the future challenges associated with managing our fire rescue department.

Town Council Priority #3

Continue monitoring and modifying coastal program.

Department

Department Goals


Public Works

  • Continue pursuit of required Federal permits in accordance with BMA and permit required monitoring.

  • Construct shore protection projects in accordance with the 10- year long term plan.

Town Council Priority #4

Identify strategies that pro-actively deal with growth impacts in West Palm Beach protecting water quality and quantity, traffic, life safety and quality of life.

PZ&B

  • Continue to monitor development in West Palm Beach and recommend strategies to address impacts to the Town.

Police

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

Town Council Priority #5

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. Develop the Phase 2 implementation plan by June 30, 2016.

Recreation

  • Develop a plan to implement recommendations established in the Palm Beach Community Center and Seaview Park Needs Assessment and Master Plan.

  • Continue to solicit feedback from residents concerning programming and facility development

  • Increase awareness of program offerings utilizing diverse marketing methods.


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.


image

Location FY2017



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.


image image


image

image

Town Overview/Demographics FY2017


DEMOGRAPHICS

DEMOGRAPHICS


Palm Beach at a Glance

Date of Incorporation

April 17, 1911

Form of Government

Council/Manager

Land Area

3.77 Square Miles

FY2017 General Fund Budget

$76.8 Million

Taxable Property Valuation

$15.9 Billion


Town of Palm Beach Demographics

Population

Service Statistics

2015 (Univ of Florida Est) 2014 (Univ of Florida Est)

8,041

8,170

Police Stations

1

2013 (Univ of Florida Est)

8,168

Fire-Rescue Stations

3

2010 (Census)

8,161

Public Elementary School

1

2000

9,676

Public Library

1

1990

9,814

Recreation Facilities

1980

9,432

Tennis Courts

14

1980

9,086

Par 3 Golf Course

1

1960

6,055

Marina (88 slips)

1

1950

3,886

Community Building

1

Playfields

5

Bicycle Paths

9.3 miles

Resident Statistics

Picnic Tables

77

Median Age

68.7 yrs.

Outdoors Grills

28

Avg. Household Size

1.74

Recreation Areas

Median Home Value

$924,100

Phipps Ocean Park

24 acres

Seaview Park

4.6 acres

Neighborhood Parks

Racial Composition

Bradley Park

4.5 acres

Caucasian & Other Races

94.5%

Kaplan Park

.3 acres

Hispanic/Latino

3.9%

Special Use Parks

African American

.6%

Public Park on Beach

3.0 acres

Asian

1.0%

Municipal Beach

5.60 acres

Peruvian/So. County Road

.24 acres

Bond Ratings

Southern Blvd. Causeway

9.60 acres

2013/2016

Revenue Bond

Issuer’s Rating

Nature Islands

39 acres

Moody’s

Aa1

Aaa

S&P

AA+

AAA

Registered Voters

7,705

Taxable Value and Millage Rate


The Town Council approved a millage rate of 3.2706 for FY17, a decrease from the FY16 millage rate of 3.3779. Taxable value increased 8.84% to $15,929,537,770 for FY17. Ad Valorem revenue of $49,494,500 is included in the FY17 budget. Town adopted final millage rate is above rollback but below maximum millage rates. The increase in tax revenue from the rollback rate is $2,204,887. The chart below identifies the millage rate options available to the Town and the Town’s adopted final millage rate.


Millage Rate

Tax Revenue

Rollback Millage Rate

3.1249

$47,289,302

Majority Vote Maximum Millage Rate

3.2775

$49,598,607

2/3 Vote Maximum Millage Rate

3.6053

$54,559,224

Town Adopted Final Millage Rate

3.2706

$49,494,500


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 1.96%. The 2/3 vote maximum rate is 110% of the majority maximum rate.


image


Historic taxable value peaked in FY09 at $13.68 billion. Since FY09, the Town’s taxable value had declined by 15% through FY12. Since FY12, values have increased and in FY16, the taxable value increased by 9.74% to a new all-time high. The FY16 millage rate decreased, but due to the increase in taxable value, an additional

$3,706,648 in property tax revenue was added to the budget to supplement the funding of the coastal protection program. The tax revenue trend is shown on the chart on the following page.


image


The Town millage rate represents 19.02% of the total tax bill. The table below illustrates the difference between the FY16 vs. FY17 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

FY16

Millage Rate

FY17

Millage Rate

FY16 Tax Change Per

$1 Million Value $1 million Value % Change

% of Total Tax Bill


Palm Beach


3.3779


3.2706


$3,271


-$107.30


-3.18%


19.02%

Palm Beach County

4.9277

4.9142

$4,914

-$13.50

-0.27%

28.57%

Palm Beach County School District

7.5120

7.0700

$7,070

-$442.00

-5.88%

41.10%

South Florida Water Mgmt

0.3045

0.2836

$284

-$20.90

-6.86%

1.65%

Children Services

0.6677

0.6833

$683

$15.60

2.34%

3.97%

Florida Inland Navigation

0.0320

0.0320

$32

$0.00

0.00%

0.19%

Health Care District

1.0426

0.8993

$899

-$143.30

-13.74%

5.23%

Everglades Construction

0.0506

0.0471

$47

-$3.50

-6.92%

0.27%

Grand Total

17.9150

17.2001

$17,200

-$714.90

-3.99%

100.00%


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


image

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


image


Property Breakdown by Number of Parcels


image

The Town has a total of 9,449 total parcels. Residential units total 8,898 or 94% of all parcels. Condominiums and Cooperatives represent the greatest percentage of total parcels in the Town at 68% or 6,378 parcels. Single family residential parcels are the second largest group at 2,280 parcels or 24% of the total. Commercial and industrial parcels total 396 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.


image

Property Breakdown by Taxable Value


The taxable value of parcels in the Town totals $15.7 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 $6.1 billion (38.5%) of the total taxable value.

Historical Building Permit Detail


For the past five years, permit revenue and permit activity increased. A total of 9,896 permits were issued in FY16, compared to 7,804 for FY12. Total permit valuation for FY16 was $289,645,824 compared to $191,604,640 for FY12. Permit activity in FY16 was lower than the FY15 record, but still at high historic levels.


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


image


image


We expect permit activity to continue at high levels for FY17. The improvement in permit activity and new construction has resulted in a portion of the improvement of the Town’s taxable value, with the balance an improvement in the real estate market.


image

Town of Palm Beach History FY2017


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.


image

In 1893 millionaire industrialist Henry M. Flagler and his second wife honeymooned in St. Augustine. Impressed with the beauty and history of the area, he envisioned an “American Riviera”. Flagler left home at age 14 with an eighth-grade education. Later, with John D. Rockefeller and Samuel Adams, he founded Standard Oil, and the rest is history. Having invested large sums in

several hotels in the St.

Augustine area, Flagler

extended his holdings

southward. He bought and

improved existing railways

anticipating the tremendous

potential for South Florida.

His railway was named the

Florida East Coast Railway.


Flagler’s agents soon were

buying acres of land on the

island of Palm Beach. Many

early homesteaders

found themselves very wealthy,

as orders had been given to

buy “at any price”.

Ground was broken May 1,

1893, and on February 11,

1894, the Royal Poinciana

Hotel, the largest wood structure

in the world, opened in

Palm Beach and welcomed 17

guests. A month after the

opening, the first train pulled

from the station on Loftin

Street (later used as an office

and warehouse by the Town of

Palm Beach) in West Palm

Beach on the newly built

bridge across Lake Worth to

deliver vacationing residents, some in their own private railway cars, to the new hotel. Henry Flagler built his own house in 1902, Whitehall, as a wedding present for his third wife, Mary Lily Kenan. Whitehall is now the Henry Morrison Flagler Museum and is open to the public.


Flagler continued to develop the Royal Poinciana Hotel property and built a second hotel, the Palm Beach Inn, on the beachfront portion of the Royal Poinciana’s property. When the Palm Beach Inn burned in 1903 the first Breakers Hotel was built. Destroyed by a fire in


image

Town of Palm Beach History FY2017


1925, it was rebuilt as the splendid hotel it is today. The Breakers is listed in the National Register of Historic Places.


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 has 7,720 registered voters in 2015 with approximately 8,168 full time residents. The population swells to approximately 25,000 during “season” which is from November to April. Residents and visitors enjoy the very best in dining, shopping, and luxurious surroundings. Worth Avenue shops attract visitors worldwide.


In 2011, the Town celebrated its Centennial with a season full of activities and events. A Centennial Commission was formed to engage with the community, residents and businesses alike, to identify ways to celebrate the 100th anniversary of the Town's incorporation on April 17, 2011.


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




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


image

Flow Chart of Budget Process FY2017


Flow Chart of Budget Process


image

FY2017 Budget Calendar

Task Date Task Date


Finance to distribute FY17 Budget instructions

03/04/2016

Town Manager’s Review of Town Manager, Risk Insurance, and Finance Budgets

05/24/2016

Finance to distribute FY17 Budget instructions

03/04/2016

Town Manager’s Review of Town Manager, Risk Insurance, and Finance Budgets

05/24/2016


Town Council Meeting – Adoption of the Town Manager’s Goals for FY17

03/08/2016

Property Appraiser Issues Preliminary Property Values

06/1/2016

Town Council Meeting – Adoption of the Town Manager’s Goals for FY17

03/08/2016

Property Appraiser Issues Preliminary Property Values

06/1/2016


Submit initial CIP Request forms to Public Works

03/18/2016

Final Budget Document Pages Returned to Finance

06/10/2016

Submit initial CIP Request forms to Public Works

03/18/2016

Final Budget Document Pages Returned to Finance

06/10/2016


Department’s Budget Requests and Public Works CIP requests to Finance

04/15/2016

Town Manager’s Additional Review of Department Budgets (As Needed) - Town Manager review of Revenue Estimates with Finance Director

June 2016

Department’s Budget Requests and Public Works CIP requests to Finance

04/15/2016

Town Manager’s Additional Review of Department Budgets (As Needed) - Town Manager review of Revenue Estimates with Finance Director

June 2016


Town Manager’s Review of Information Systems Budget

04/21/2016

Notice from Property Appraiser of Preliminary Certification of Taxable Value

07/01/2016

Town Manager’s Review of Information Systems Budget

04/21/2016

Notice from Property Appraiser of Preliminary Certification of Taxable Value

07/01/2016


Town Manager’s Review of Fire-Rescue Budget

04/20/2016

Distribution of Proposed FY17 Budget Document

Week of July 4

Town Manager’s Review of Fire-Rescue Budget

04/20/2016

Distribution of Proposed FY17 Budget Document

Week of July 4


Town Manager’s Review of Recreation Enterprise Fund Budget

04/27/2016

Town Council Meeting to Consider Proposed FY16 Budget and Initial Resolutions(s) Adopting Special Non-Ad Valorem Assessments

07/12/2016

Town Manager’s Review of Recreation Enterprise Fund Budget

04/27/2016

Town Council Meeting to Consider Proposed FY16 Budget and Initial Resolutions(s) Adopting Special Non-Ad Valorem Assessments

07/12/2016


Town Manager’s Review of Police Budget

04/27/2016

Notice of Proposed Property Taxes is mailed from Palm Beach Property Appraiser

Week of August 15

Town Manager’s Review of Police Budget

04/27/2016

Notice of Proposed Property Taxes is mailed from Palm Beach Property Appraiser

Week of August 15



Town Manager’s Review of Planning, Zoning and Building Budget


05/19/2016

Town Council Meeting – First Public Hearing to Approve Tentative Budget and Proposed Tax Rate for FY17 and Final Resolution(s) Adopting Special Non-Ad Valorem Assessments

09/13/2016

5:01PM


Town Manager’s Review of Planning, Zoning and Building Budget


05/19/2016

Town Council Meeting – First Public Hearing to Approve Tentative Budget and Proposed Tax Rate for FY17 and Final Resolution(s) Adopting Special Non-Ad Valorem Assessments

09/13/2016

5:01PM



Town Manager’s Review of Public Works, Capital, and Coastal Budgets

05/17/2016GF

5/18/16-CIP/

Coastal


Town Council Meeting – Second Public Hearing to Adopt FY17 Budget and Tax Rate

09/21/2016

5:01PM


Town Manager’s Review of Public Works, Capital, and Coastal Budgets

05/17/2016GF

5/18/16-CIP/

Coastal


Town Council Meeting – Second Public Hearing to Adopt FY17 Budget and Tax Rate

09/21/2016

5:01PM


Town Manager’s Review of Human Resources Budget (Health and OPEB)

05/18/2016

Resolution Adopting Final Millage Rate is Forwarded to Property Appraiser and Tax Collector and Certificate of Compliance sent to Department of Revenue

9/30/2016

Town Manager’s Review of Human Resources Budget (Health and OPEB)

05/18/2016

Resolution Adopting Final Millage Rate is Forwarded to Property Appraiser and Tax Collector and Certificate of Compliance sent to Department of Revenue

9/30/2016


image

January 2016

S M T W TH F S

1 2

3 4 5 6 7 8 9

10 11 12 13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

41

41

31

February 2016

S M T W TH F S 1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29

March 2016

S M T W TH F S

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30 31

April 2016

image

S M T W TH F S

1 2

3 4 5 6 7 8 9

10 11 12 13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

May 2016

image

S M T W TH F S 1 2 3 4 5 6 7

8 9 10 11 12 13 14

15 16 17 18 19 20 21

22 23 24 25 26 27 28

29 30 31

June 2016

image

image

S M T W TH F S

1 2 3 4

5 6 7 8 9 10 11

12 13 14 15 16 17 18

19 20 21 22 23 24 25

26 27 28 29 30


July 2016

Aug

ust 2016

Sep

tember 2016

Oct

ober 2016

Nov

ember 2016

Dec

ember 2016

S

M

T

W

TH

F

S

S

M

T

W

TH

F

S

S

M

T

W

TH

F

S

S

M

T

W

TH

F

S

S

M

T

W

TH

F

S

S

M

T

W

TH

F

S

1

2

1

2

3

1

1

2

3

4

5

1

2

3

3

4

5

6

7

8

9

1

2

3

4

5

6

4

5

6

7

8

9

10

2

3

4

5

6

7

8

6

7

8

9

10

11

12

4

5

6

7

8

9

10

10

11

12

13

14

15

16

7

8

9

10

11

12

13

11

12

13

14

15

16

17

9

10

11

12

13

14

15

13

14

15

16

17

18

19

11

12

13

14

15

16

17

17

18

19

20

21

22

23

14

15

16

17

18

19

20

18

19

20

21

22

23

24

16

17

18

19

20

21

22

20

21

22

23

24

25

26

18

19

20

21

22

23

24

24

25

26

27

28

29

30

21

22

23

24

25

26

27

25

26

27

28

29

30

23

24

25

26

27

28

29

27

28

29

30

25

26

27

28

29

30

31

31

28

29

30

31

30

31

Description of Funds and Fund Types


For accounting purposes a state or local government is not treated as a single, integral entity. Rather, a government is viewed instead as a collection of smaller, separate entities known as “funds”. The Governmental Accounting Standards Board’s (GASB) Codification of Governmental Accounting and Financial Reporting Standards (Codification), Section 1300, defines a fund as:


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


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


Governmental Funds


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


General Fund


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

Activities financed by the General Fund include the following:


General Government

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


Legislative

Includes expenditures for the Mayor and Town Council.


Town Manager

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


Human Resources

The Human Resources Department is responsible for the recruitment, screening, and selection of employees to serve the Town. The Department is also responsible for employee benefits administration and compensation analysis. The Town’s Occupational Health Clinic is operated under this Department. The Human Resources Director is also the Plan Administrator for the Town’s General Employee Retirement System.

Finance

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


In FY05, the Town Clerk’s Office became a division of the Finance Department. The Town Clerk’s Office is responsible for the records of the Town as well as conducting elections held within the Town. The Department also processes permits for charitable solicitations, special events, commercial motion picture-making, going- out-of-business sales, and door-to-door solicitations.


Planning, Zoning and Building

The Planning, Zoning and Building Department is responsible for zoning changes and the issuance of permits for building, mechanical, plumbing, electrical, gas, energy, and coastal construction. The Department also assists residents, businesses, and the construction industry in code compliance. The Department strives to preserve the aesthetic, historical, and economic values of Palm Beach.


Fire-Rescue

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


Police

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


Public Works

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


Other

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


Transfers to other Funds

This classification includes transfers to the capital, risk insurance, OPEB Trust, and debt service funds.


Special Revenue Funds

image


Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources which, by law, are designated to finance particular functions or activities of government and which therefore cannot be diverted to other uses.

The Town has the following special revenue funds for which an annual budget is not adopted:



Non-Expendable and Expendable Trust Funds

image


These consist of resources received from non-Town sources and held by the Town as trustee to be expended or invested in accordance with the conditions of the trust. In a non- expendable trust, the government typically is only permitted to spend the investment earnings and not the assets. The Town does not have non-expendable and expendable trust funds at the present time.


Agency Funds

image


Trust funds typically involve some degree of financial management. Agency funds are used when the government plays a more limited role by just collecting funds on behalf of a third party. The Town does not have an Agency Fund at the present time.

image


Long Term Financial Plan Forecast Summary


Financial forecasts are the foundation of a long term financial plan. These forecasts provide the Mayor, Town Council and staff with information they need to more effectively determine future levels of service and methods of funding. This forecast of General Fund revenues and expenditures includes the FY17 budget and a 5 year forecast through FY22.


Assumptions


The forecast for the first 2 - 3 years is based upon recent trends and specific expectations. The forecast for the remaining 2 years is less tactical and more mathematical, and is based primarily upon estimates by actuaries and long term inflation expectations.


The major assumptions that were used to prepare the forecast are as follows:


FY17

FY18

FY19

FY20

FY21

FY22

Ad Valorem Tax Increase

5.01%

3.25%

3.25%

3.25%

3.25%

3.25%

General Inflation

2.1%

2.1%

2.1%

2.1%

2.1%

2.1%

Salaries & Wages

-.87%

1.65%

2.93%

0.9%

1.94%

2.01%

Health Insurance

6.0%

6.0%

6.0%

6.0%

6.0%

6.0%

Pension

17.1%

9.79%

5.79%

6.67%

6.17%

3.85%

Other Employee Benefits

0.94%

4.83%

4.91%

4.38%

4.78%

4.82%

Property Insurance

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

Liability Insurance

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

W/C Insurance

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%


Revenue forecasts are based upon historical trends and recent activity. To be conservative, the ad valorem tax increase is projected at 3.25% per year. Each revenue category forecast is described in greater detail later in this section.


The assumption for inflation of 2.1% is based upon the forecast in the Livingston Survey issued by the Federal Reserve Bank of Philadelphia, this estimate for the rate of inflation has remained constant since the 2013 forecast. The salary and wage assumption is based upon the average annual increases for all employee groups and forecasted retirements. The health insurance forecast assumption is based upon input from our health consultant’s actuary. The pension forecast assumption was updated by the Town’s pension actuary. The other employee benefit assumptions have been calculated based upon anticipated retirements and other inflation factors and does not include health insurance. Property, Liability and Workmen’s Compensation insurance assumptions are based upon information received from our brokers regarding potential increases.

image


2016 Forecast


The forecast charts shown on the following pages include a comparison the forecasts prepared in 2014 and 2015 to the current 2016 forecast. In recent years, staff and the Town Council have been able to make major reductions in expenditures and to slow future growth to sustainable levels. The 2016 forecast shows steady progress with meeting the Town’s needs and funding coastal projection and capital projects.


General Fund Revenue Forecast


The General Fund revenue forecast has improved since the 2013, mainly due to the increase in property tax revenue and license and permit revenue. Improvement in these revenue sources over the past few years has improved the forecast over the 5-year period. The forecast for revenues is conservative and should allow for minor fluctuations in various revenue sources. The forecast details for each major revenue category are included in this analysis.


image

Property Tax Revenue


Rather than using a complex formula anticipating taxable value and personal income growth, we forecast the increase in ad valorem revenues based upon a basic percentage increase estimate. The 2016 forecast includes the FY17 budget plus a 5 year forecast. Property tax revenues in FY17 increased by 5.01%. Over the past 5 years, taxable value has increased by 33% an average of 6.47% per year. We increased the forecast slightly due to the recent trends in taxable value increases.

image


image


Non Ad Valorem Taxes


Non ad valorem taxes include local option gas taxes, franchise fees and utility service taxes. The forecast for 2016 has declined because recent revenue collections have not been as high as had been anticipated in recent forecasts. The forecast trend chart is shown below:


image

License and Permit Revenue


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

image


The real estate market has improved in recent years. FY15 was a record year for permit revenue. FY16 revenues remained at high levels, but did not meet the levels of FY15. The forecast shows higher revenues in 2017 and 2018 due to improved conditions and budgeting higher conservative revenues that more closely align with actual receipts. The forecast is higher than prior years, but the growth is relatively flat.

image


Intergovernmental Revenue


Intergovernmental revenue includes revenue received from Federal, State, County and local government sources. Revenues from the State of Florida include State revenue sharing, local government sales tax and alcoholic beverage licenses. Local revenues include County occupational license revenue, and the 911 reimbursement from Palm Beach County. Federal and State grants are also included in this category.

image


image


The forecast for intergovernmental revenues has declined due to reductions in revenues received from the State of Florida for sales tax and revenue sharing. The FY17 budget contains anticipated grant funds, but the forecast does not plan for any grant revenue. The forecast anticipates a small inflationary increase per year in the State revenues.


Charges for Services


Charges for services include public safety fees, solid waste fees, parking meter collections and other small fees such as copy charges and lien searches. The forecast for these revenues decreased in 2015 due to lower public safety revenues and solid waste collection revenues. The forecast for 2016 reflects increases in these revenue sources.


image

image


Fines and Forfeitures


Fine and Forfeiture revenue includes traffic violation fines and penalties, parking fines and penalties and code enforcement violation fines.


Revenues from these sources have decreased since the 2014 forecast. The majority of the decrease is due to the forecast for parking ticket fines and penalties. Parking ticket fines and moving violation revenue has decreased and the 2016 budget and forecast has been adjusted to reflect the recent actual activity. The downward trend in these revenues reflect improved compliance.


image


Investment Income


The investment income forecast has declined from 2015 due to the prolonged depressed interest rate environment. We are predicting, for purposes of this forecast, investment returns will continue to remain at low levels and gradually improve through the forecast period.

image


image


Miscellaneous and Transfers


Miscellaneous revenue includes rents and royalties, the sale of fixed assets and other revenue. Transfers include transfers from the Recreation Enterprise Fund. The decrease in 2016 is due to the termination of a lease for a cellular tower and anticipated decreases in the transfer from the Recreation Enterprise Fund. The Recreation Enterprise Fund transfer will decrease and instead the funds will be directed to the Dock Replacement Fund to reduce the amount of borrowing for this project.


image

image


Total General Fund Expenditures


The 2014 forecasted expenditures increased primarily due to increased debt service for the 2013 bonds and an increase in the transfer to the coastal protection fund to fund the approved 10-year program. The 2015 forecasted expenditures were less than the 2014 forecast due to savings achieved in the FY15 budget. The 2016 forecast reflects increases in pension costs and the transfer to the CIP fund. Other increases are described in the categories below.


image

Salary and Wages


Salary and Wage increases are based upon the modifications to the Town’s employee pay policies, reductions in personnel, and replacements of retirees at lower salaries through the forecast period. The salary and wage assumption is based upon the average annual increases for all employee groups and forecasted retirements.


Since the high in 2007 Town staffing has decreased by 52.36 FTEP. A combination of actions (changing pay policies, reducing staffing, etc.) has improved the salary forecast significantly. The 2016 forecast for salaries is lower than 2015 due to the retirement of 20 employees.

image


image


Pension Benefits


The pension estimate is based upon the actuary’s estimates for pension costs.


image


The Town’s Retirement Board recommended a change in the investment assumption from 7.5% to 7.0% over a 5-year period. This change will add additional cost for pension benefits. The updated forecast reflects lower returns and changes in the mortality tables. The FY17 budget included the changes to the public safety retirement program.


Since FY14 the Town Council approved a discretionary DC contribution of 4% for all non-union employees. The forecast includes the discretionary contribution for General Employees throughout

image


the 10-year period. The new benefit changes eliminated the DC contributions for non-union public safety employees.


Other Employee Benefits


Other Employee Benefits includes all other benefits including health insurance. Health insurance costs have remained flat for four years. The forecast shows an increase of 7% for FY18, then 6% increases thereafter and other employee benefits (including FICA, longevity, incentives, and allowances) will increase at a much lower rate. The forecast decreased from 2014 due to steps taken to reduce insurance costs and reduced longevity and FICA costs due to recent retirements.


image


Contractual


Contractual expenditures are forecasted to increase by the rate of inflation. The contractual forecast has increased due to increases in the FY17 budget. These increases include, additional funding for lobbying, landscape maintenance costs, utility service, contractual plan review, landfill costs and training and professional development.

image


image


Commodities


The commodity forecast is based upon the assumed rate of inflation. Commodity budgets include fuel, supplies, dues, software, some computer hardware and vehicle maintenance and uniforms.

The 2016 forecast has decreased based upon budget savings in these areas.


image

Equipment Replacement/Capital Outlay


This category includes depreciation on Town vehicles and equipment that is charged to the departments and transferred to the Equipment Replacement Fund. It also includes purchases of new equipment that is not replacement equipment. The 2016 forecast increase is due to

image


depreciation on new equipment and a specific increase in the estimated replacement value of 3 fire- rescue pumpers due to higher than anticipated increases in the cost of these vehicles.


image

Transfers


The Transfers category includes transfers to the Capital Improvement Program, Coastal Protection Fund, Debt Service Fund, Risk Insurance Fund and Retiree Health Insurance Trust. It also includes the annual contingency allocation.




image

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 2014 forecast, the 2015 and 2016 forecast contains projected surpluses through the 2021 and 2022 forecast period.

image


image


image

Fund Budget Overview FY2017


Fund Budget Overview


image

FY 17 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

$49,494,500

$0

$0

$0

$0

$0

$0

$49,494,500

Non Ad Valorem Taxes

5,903,000

0

0

0

0

0

0

5,903,000

Licenses and Permits

9,560,500

0

0

0

0

0

0

9,560,500

Intergovernmental

1,178,500

0

0

805,000

50,000

0

0

2,033,500

Charges for Services

3,816,550

0

0

0

6,144,200

7,105,033

0

17,065,783

Fines and Forfeitures

1,255,000

0

0

0

0

0

0

1,255,000

Contributions

0

0

0

0

0

0

10,159,695

10,159,695

Interest Earnings

704,339

6,000

1,099

200,093

13,700

206,000

17,337,114

18,468,345

Miscellaneous

288,758

0

0

0

0

30,000

82,500

401,258

Special Assessments

0

0

728,013

247,342

0

0

0

975,355

Interfund Transfers

685,000

760,200

7,115,933

9,555,200

0

1,838,037

3,839,000

23,793,370

Subtotal

72,886,147

766,200

7,845,045

10,807,635

6,207,900

9,179,070

31,418,309

139,110,306

Appropriations from

Fund Balance


3,966,230


299,652


0


13,674,637


642,617


5,717,343


0


24,300,479

Total Revenues

$76,852,377

$1,065,852

$7,845,045

$24,482,272

$6,850,517

$14,896,413

$31,418,309

$163,410,785


Expenditures

Salaries and Wages

$24,737,579

$0

$0

$0

$1,354,465

$176,386

$114,073

$26,382,503

Employee Benefits

19,409,548

0

0

0

636,317

5,351,911

2,075,629

27,473,405

Contractual

9,432,209

0

0

0

1,845,389

1,724,591

20,540,912

33,543,101

Commodities

1,810,344

0

0

0

500,550

5,548

300

2,316,742

Capital Outlay

399,807

1,065,852

0

22,642,059

1,321,629

2,137,977

0

27,567,324

Depreciation

2,295,375

0

0

0

0

0

0

2,295,375

Debt Service

0

0

7,622,897

0

185,967

0

0

7,808,864

Interfund Transfers

17,481,965

0

109,825

1,491,613

685,000

1,500,000

0

21,268,403

Other

1,285,550

0

16,500

348,600

321,200

4,000,000

0

5,971,850

Subtotal

76,852,377

1,065,852

7,749,222

24,482,272

6,850,517

14,896,413

22,730,914

154,627,567

Transfer to Fund

Balance/Retained Earnings


0


0


95,823


0


0


0


8,687,395


8,783,218

Total Expenditures

$76,852,377

$1,065,852

$7,845,045

$24,482,272

$6,850,517

$14,896,413

$31,418,309

$163,410,785


Financial Ratios


General

Debt Service

Capital Projects


Enterprise

Internal Service

Trust & Agency


Total

Ad Valorem Taxes as

percentage of total

fund budget

64.40%

0.00%

0.00%

0.00%

0.00%

0.00%

30.29%

Ad Valorem Taxes per

capita (8,041

population)

$6,155

$0

$0

$0

$0

$0

$6,155

Total expenditures

per capita (8,041

population)

$9,558

$976

$3,045

$852

$1,853

$3,907

$20,322

Personnel as a

percentage of the

total budget

32.19%

0.00%

0.00%

19.77%

1.18%

0.36%

16.14%

Capital expenditures

as percentage of total

fund budget

0.52%

0.00%

92.48%

19.29%

14.35%

0.00%

16.87%

Capital expenditures

per capita (8,041

population)

$50

$0

$2,816

$164

$266

$0

$3,428

FY 17 Budget Summary by Fund Type, Revenues and Expenditures


Special Debt Capital Internal Trust &

General Revenue Service Projects Enterprise Service Agency Totals


image

FY17 Budget by Revenue Type All Funds



Appropriations from Fund Balance

15.0%


Interfund Transfers 14.6%


Ad Valorem Taxes 30.5%


Interest Earnings 11.4%


Miscellaneous 0.2%


Contributions 6.3%

    1. %


      Fines and Forfeitures 0.8%


      Charges for Services 10.5%


      Sales and Use Taxes 3.6%

      Licenses and Permits 5.9%


      Intergovernmental Revenue 1.3%


      image

      FY17 Budget by Expenditure Classification All Funds



      Contractual 20.5%

      Commodities 1.4%


      Capital Outlay Depreciation 16.9% 1.4%

      Debt Service 4.8%


      Employee Benefits 16.8%


      Personnel 16.1%


      Other 3.7%


      Interfund Transfers 13.0%

      Transfer to Fund

      Balance/Retained Earnings 5.4%

      Summary of Major Revenues by Fund Type FY17 Budget

      FY17 Budget

      to FY2017 FY2014 FY2015 FY2016 FY2016 FY2017 FY16 Budget %

      Description Actual Actual Budget Projected Budget % Variance of Total

      General Fund

      Ad Valorem Taxes

      $39,110,926

      $43,869,888

      $47,131,000

      $47,131,000

      $49,494,500

      5.01%

      64.40%

      Sales and Use Taxes

      8,648,808

      8,056,312

      8,005,000

      8,065,000

      8,103,000

      1.22%

      10.54%

      Licenses and Permits

      7,401,315

      10,657,677

      7,103,320

      8,949,470

      7,303,500

      2.82%

      9.50%

      Intergovernmental Revenue

      1,056,503

      1,102,690

      1,135,537

      1,142,003

      1,178,500

      3.78%

      1.53%

      Charges for Services

      3,741,185

      3,957,601

      3,867,388

      3,951,938

      3,816,550

      -1.31%

      4.97%

      Fines and Forfeitures

      1,924,183

      1,099,526

      1,284,000

      1,284,000

      1,255,000

      -2.26%

      1.63%

      Interest Earnings

      383,727

      597,586

      700,000

      580,000

      704,339

      0.62%

      0.92%

      Miscellaneous

      664,107

      213,106

      323,500

      343,520

      345,758

      6.88%

      0.45%

      Interfund Transfers

      885,000

      885,000

      785,000

      785,000

      685,000

      -12.74%

      0.89%

      Subtotal

      63,815,754

      70,439,386

      70,334,745

      72,231,931

      72,886,147

      3.63%

      94.84%

      Appropriations from Fund Balance

      1,471,382

      195,267

      1,579,586

      256,298

      3,966,230

      151.09%

      5.16%

      Total General Fund

      $65,287,136

      $70,634,653

      $71,914,331

      $72,488,229

      $76,852,377

      6.87%

      100.00%

      Special Revenue Funds

      Interest Earnings

      0

      0

      0

      0

      6,000

      100.00%

      0.08%

      Special Assessments

      0

      0

      0

      0

      0

      0.00%

      0.00%

      Miscellaneous

      0

      0

      0

      0

      0

      0.00%

      0.00%

      Interfund Transfers

      0

      0

      0

      2,530,250

      760,200

      100.00%

      9.69%

      Subtotal

      0

      0

      0

      2,530,250

      766,200

      100.00%

      9.77%

      Appropriations from Fund Balance

      0

      0

      0

      0

      299,652

      100.00%

      3.82%

      Total Debt Service Funds

      $0

      $0

      $0

      $2,530,250

      $1,065,852

      100.00%

      100.00%


      Debt Service Funds

      Interest Earnings

      72

      100

      1,500

      1,100

      999

      -33.40%

      0.01%

      Special Assessments

      740,212

      777,716

      777,000

      777,000

      728,113

      -6.29%

      9.28%

      Miscellaneous

      0

      0

      0

      0

      0

      0.00%

      0.00%

      Interfund Transfers

      6,624,949

      7,036,813

      7,200,725

      7,200,725

      7,115,933

      -1.18%

      90.71%

      Subtotal

      7,365,233

      7,814,629

      7,979,225

      7,978,825

      7,845,045

      -1.68%

      100.00%

      Appropriations from Fund Balance

      0

      172,478

      14,000

      2,400

      0

      -100.00%

      0.00%

      Total Debt Service Funds

      $7,365,233

      $7,987,107

      $7,993,225

      $7,981,225

      $7,845,045

      -1.85%

      100.00%

      Capital Projects Funds

      Interest Earnings

      213,373

      584,287

      183,803

      368,806

      167,738

      -8.74%

      0.69%

      Grants/Interlocal/Donations

      353,894

      557,912

      4,530,000

      3,987,818

      800,000

      -82.34%

      3.27%

      Special Assessment Revenue

      260,980

      229,988

      233,710

      238,000

      247,342

      5.83%

      1.01%

      Loan Proceeds/Contributions

      58,494,720

      0

      10,000

      0

      5,000

      -100.00%

      0.02%

      Miscellaneous

      14,688

      9,370

      0

      8,399

      0

      0.00%

      0.00%

      Interfund Transfers

      25,183,913

      15,940,037

      9,367,993

      9,368,393

      9,555,200

      2.00%

      39.03%

      Subtotal

      84,521,568

      17,321,594

      14,325,506

      13,971,416

      10,775,280

      -24.78%

      44.01%

      Appropriations from Fund Balance

      0

      22,623,403

      24,812,670

      27,074,524

      13,706,992

      -44.76%

      55.99%

      Total Capital Projects Funds

      $84,521,568

      $39,944,997

      $39,138,176

      $41,045,940

      $24,482,272

      -37.45%

      100.00%

      Enterprise Funds

      Charges for Services

      $5,254,951

      $5,802,203

      $5,674,200

      $5,797,700

      $6,070,700

      6.99%

      88.62%

      Interest Earnings

      14,615

      17,024

      13,900

      13,700

      13,700

      -1.44%

      0.20%

      Grants/Interlocal/Donations

      0

      25,000

      0

      0

      50,000

      0.00%

      0.73%

      Interfund Transfers

      1,250,000

      0

      0

      0

      0

      0.00%

      0.00%

      Miscellaneous

      23,493

      7,603

      11,300

      9,900

      73,500

      0.00%

      1.07%

      Subtotal

      6,543,059

      5,851,830

      5,699,400

      5,821,300

      6,207,900

      8.92%

      90.62%

      Appropriations from Retained Erngs.

      0

      0

      257,255

      81,199

      642,617

      149.80%

      9.38%

      Total Enterprise Funds

      $6,543,059

      $5,851,830

      $5,956,655

      $5,902,499

      $6,850,517

      15.01%

      100.00%

      Internal Service Funds

      Interest Earnings

      $152,068

      $268,596

      $161,366

      $206,000

      $206,000

      27.66%

      1.38%

      Miscellaneous

      $550,345

      $1,141,739

      $30,000

      $230,000

      $30,000

      0.00%

      0.20%

      Interfund Transfers

      $0

      $1,925,362

      $1,934,595

      $1,934,595

      $1,838,037

      -4.99%

      12.34%

      Charges for Services

      8,702,436

      $6,740,203

      $6,922,019

      $7,001,319

      $7,105,033

      2.64%

      47.70%

      Subtotal

      9,404,849

      10,075,900

      9,047,980

      9,371,914

      9,179,070

      1.45%

      61.62%

      Appropriations from Retained Erngs.

      2,460,839

      0

      4,564,607

      0

      5,717,343

      25.25%

      38.38%

      Total Internal Service Funds

      $11,865,688

      $10,075,900

      $13,612,587

      $9,371,914

      $14,896,413

      9.43%

      100.00%

      Summary of Major Revenues by Fund Type FY17 Budget

      FY17 Budget

      to FY2017 FY2014 FY2015 FY2016 FY2016 FY2017 FY16 Budget %

      Description Actual Actual Budget Projected Budget % Variance of Total


      Trust & Agency Funds

      Intergovernmental Revenue

      $0

      $0

      $0

      $0

      $0

      0.00%

      0.00%

      Interest Earnings

      1,208,970

      2,289,137

      2,050,000

      1,700,000

      2,050,000

      0.00%

      6.52%

      Gain/Loss on Investments

      16,046,598

      -11,711,790

      15,657,549

      9,150,000

      15,287,114

      0.00%

      48.66%

      Charges for Services

      0

      0

      0

      0

      0

      0.00%

      0.00%

      Miscellaneous

      271,413

      56,304

      5,000

      2,500

      2,500

      -50.00%

      0.01%

      Contributions

      14,826,471

      8,227,063

      8,933,424

      8,841,492

      10,239,695

      14.62%

      32.59%

      Interfund Transfers

      1,506,000

      1,577,000

      1,180,000

      1,180,000

      3,839,000

      225.34%

      12.22%

      Subtotal

      33,859,452

      437,714

      27,825,973

      20,873,992

      31,418,309

      12.91%

      100.00%

      Appropriations from Fund Balance

      0

      26,236,582

      0

      234,462

      0

      0.00%

      0.00%

      Total Trust & Agency Funds

      $33,859,452

      $26,674,296

      $27,825,973

      $21,108,454

      $31,418,309

      12.91%

      100.00%

      All Funds

      Ad Valorem Taxes

      $39,110,926

      $43,869,888

      $47,131,000

      $47,131,000

      $49,494,500

      5.01%

      30.29%

      Sales and Use Taxes

      8,648,808

      8,056,312

      8,005,000

      8,065,000

      8,103,000

      1.22%

      4.96%

      Licenses and Permits

      7,401,315

      10,657,677

      7,103,320

      8,949,470

      7,303,500

      2.82%

      4.47%

      Intergovernmental Revenue

      1,056,503

      1,102,690

      1,135,537

      1,142,003

      1,178,500

      3.78%

      0.72%

      Charges for Services

      17,698,572

      16,500,007

      16,463,607

      16,750,957

      16,992,283

      3.21%

      10.40%

      Fines and Forfeitures

      1,924,183

      1,099,526

      1,284,000

      1,284,000

      1,255,000

      -2.26%

      0.77%

      Special Assessment Revenue

      1,001,192

      1,007,704

      1,010,710

      1,015,000

      975,455

      -3.49%

      0.60%

      Loan Proceeds/Contributions

      58,494,720

      0

      10,000

      0

      5,000

      -50.00%

      0.00%

      Contributions

      14,826,471

      8,227,063

      8,933,424

      8,841,492

      10,239,695

      14.62%

      6.27%

      Interest Earnings

      1,972,825

      3,756,730

      3,110,569

      2,869,606

      3,148,776

      1.23%

      1.93%

      Gain/(Loss) on Investments

      16,046,598

      -11,711,790

      15,657,549

      9,150,000

      15,287,114

      0.00%

      9.36%

      Miscellaneous

      1,524,046

      1,428,122

      369,800

      594,319

      451,758

      22.16%

      0.28%

      Interfund Transfers

      35,449,862

      27,364,212

      20,468,313

      22,998,963

      23,793,370

      16.24%

      14.56%

      Grants/Interlocal/Donations

      353,894

      582,912

      4,530,000

      3,987,818

      850,000

      -81.24%

      0.52%

      Approp. from Fund Bal/Ret Earngs

      3,932,221

      49,227,730

      31,228,118

      27,648,883

      24,332,834

      -22.08%

      14.89%

      Total All Funds

      $209,442,136

      $161,168,783

      $166,440,947

      $160,428,511

      $163,410,785

      -1.82%

      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

      FY17 Budget by Revenue Type ‐ All Funds


      Contributions, 6.3%


      Loan Proceeds/Contributions, 0.0%


      Gain/(Loss) on Investments, 9.4%

      Interest Earnings, 1.9%


      Miscellaneous, 0.3%


      Interfund Transfers, 14.6% Grants/Interlocal/Donations,

        1. %

          Special Assessment Revenue, 0.6%

          Fines and Forfeitures, 0.8% Charges for Services, 10.4%

          Intergovernmental

          Revenue, 0.7%


          Ad Valorem Taxes, 30.3%

          Approp. from Fund Bal/Ret Earngs, 14.9%


          Licenses and Permits, 4.5%


          Sales and Use Taxes, 5.0%

          Summary of Expenditure Classifications by Fund Type FY17 Budget

          FY17 Budget

          to FY2017 FY2014 FY2015 FY2016 FY2016 FY2017 FY16 Budget of

          Description Actual Actual Budget Projected Budget % Variance % of Total


          General Fund

          Salaries and Wages

          $23,152,234

          $23,478,696

          $24,950,912

          $23,865,310

          $24,737,579

          -0.86%

          32.19%

          Employee Benefits

          $14,313,554

          $14,844,270

          $14,227,724

          $15,407,725

          $19,409,548

          36.42%

          25.26%

          Contractual

          9,491,442

          10,064,496

          8,931,123

          10,996,731

          9,432,209

          5.61%

          12.27%

          Commodities

          1,633,364

          1,518,113

          1,774,239

          1,830,435

          1,810,844

          2.06%

          2.36%

          Capital Outlay

          219,961

          75,497

          237,274

          372,400

          399,307

          68.29%

          0.52%

          Interfund Transfers

          14,300,000

          18,477,000

          20,532,596

          17,840,932

          19,777,340

          -3.68%

          25.73%

          Other

          2,176,581

          2,176,581

          1,260,463

          2,174,696

          1,285,550

          1.99%

          1.67%

          Subtotal

          65,287,136

          70,634,653

          71,914,331

          72,488,229

          76,852,377

          6.87%

          100.00%

          Transfer to Fund Balance

          0

          0

          0

          0

          0

          0.00%

          0.00%

          Total General Fund

          $65,287,136

          $70,634,653

          $71,914,331

          $72,488,229

          $76,852,377

          6.87%

          100.00%

          Special Revenue Funds

          Capital Outlay

          $0

          $0

          $0

          $700,000

          $1,065,852

          100.00%

          100.00%

          Interfund Transfers

          0

          0

          0

          0

          0

          0.00%

          0.00%

          Subtotal

          0

          0

          0

          700,000

          1,065,852

          100.00%

          100.00%

          Transfer to Fund Balance

          0

          0

          0

          1,830,250

          0

          0.00%

          0.00%

          Total Debt Service Funds

          $0

          $0

          $0

          $2,530,250

          $1,065,852

          100.00%

          100.00%

          Debt Service Funds

          Debt Service

          $5,842,717

          $7,982,457

          $7,976,725

          $7,976,725

          $7,622,897

          -4.44%

          97.17%

          Other

          1,310

          4,650

          16,500

          4,500

          16,500

          0.00%

          0.21%

          Interfund Transfers

          0

          0

          0

          0

          109,825

          0.00%

          1.40%

          Subtotal

          5,844,027

          7,987,107

          7,993,225

          7,981,225

          7,749,222

          -3.05%

          98.78%

          Transfer to Fund Balance

          1,521,206

          0

          0

          0

          95,823

          100.00%

          1.22%

          Total Debt Service Funds

          $7,365,233

          $7,987,107

          $7,993,225

          $7,981,225

          $7,845,045

          -1.85%

          100.00%


          image

          Capital Projects Funds

          Capital Outlay

          $12,800,866

          $38,985,384

          $36,352,181

          $39,991,604

          $22,642,059

          -37.71%

          92.48%

          Interfund Transfers

          13,375,000

          959,613

          1,054,336

          1,054,336

          1,491,613

          41.47%

          6.09%

          Other

          0

          0

          208,000

          0

          348,600

          0.00%

          1.42%

          Subtotal

          26,175,866

          39,944,997

          37,614,517

          41,045,940

          24,482,272

          -34.91%

          100.00%

          Transfer to Fund Balance

          58,345,702

          0

          1,523,659

          0

          0

          -100.00%

          0.00%

          Total Capital Projects Funds

          $84,521,568

          $39,944,997

          $39,138,176

          $41,045,940

          $24,482,272

          -37.45%

          100.00%

          Enterprise Funds

          Salaries and Wages

          $1,230,534

          $1,177,158

          $1,354,113

          $1,250,517

          $1,354,465

          0.03%

          19.77%

          Employee Benefits

          $535,972

          $523,960

          $589,342

          $580,306

          $636,317

          7.97%

          9.29%

          Contractual

          1,356,680

          1,363,785

          1,400,150

          1,759,989

          1,845,389

          31.80%

          26.94%

          Commodities

          268,987

          318,509

          341,550

          340,781

          500,550

          46.55%

          7.31%

          Capital Outlay

          718,126

          810,577

          997,100

          981,806

          1,321,629

          32.55%

          19.29%

          Debt Service

          157,300

          202,200

          204,100

          204,100

          185,967

          -8.88%

          2.71%

          Interfund Transfers

          885,000

          885,000

          785,000

          785,000

          685,000

          -12.74%

          10.00%

          Other

          2,000

          261,571

          285,300

          0

          321,200

          12.58%

          4.69%

          Subtotal

          5,154,599

          5,542,760

          5,956,655

          5,902,499

          6,850,517

          15.01%

          100.00%

          Transfer to Retained Earnings

          1,388,460

          309,070

          0

          0

          0

          0.00%

          0.00%

          Total Enterprise Funds

          $6,543,059

          $5,851,830

          $5,956,655

          $5,902,499

          $6,850,517

          15.01%

          100.00%


          Internal Service Funds

          Salaries and Wages

          $142,962

          $146,433

          $175,011

          $166,738

          $176,386

          0.79%

          1.18%

          Employee Benefits

          4,112,830

          4,432,127

          5,243,386

          4,355,929

          5,351,911

          2.07%

          35.93%

          Contractual

          1,246,057

          1,629,278

          1,621,270

          1,585,107

          1,724,591

          6.37%

          11.58%

          Commodities

          3,526

          42,768

          5,062

          19,972

          5,548

          9.60%

          0.04%

          Capital Outlay

          1,501,400

          1,447,972

          1,356,858

          1,071,514

          2,137,977

          57.57%

          14.35%

          Interfund Transfers

          4,858,913

          119,922

          1,211,000

          1,211,000

          1,500,000

          23.86%

          10.07%

          Other

          0

          0

          4,000,000

          0

          4,000,000

          0.00%

          26.85%

          Subtotal

          11,865,688

          7,818,500

          13,612,587

          8,410,260

          14,896,413

          9.43%

          100.00%

          Transfer to Retained Earnings

          0

          2,257,400

          0

          961,654

          0

          0.00%

          0.00%

          Total Internal Sevice Funds

          $11,865,688

          $10,075,900

          $13,612,587

          $9,371,914

          $14,896,413

          9.43%

          100.00%

          Trust & Agency Funds

          Contractual

          $18,371,739

          $26,674,296

          $21,184,774

          $21,108,454

          $22,730,914

          7.30%

          72.35%

          Transfer to Fund Balance

          15,487,713

          0

          6,641,199

          0

          8,687,395

          30.81%

          27.65%

          Total Trust & Agency Funds

          $33,859,452

          $26,674,296

          $27,825,973

          $21,108,454

          $31,418,309

          12.91%

          100.00%

          image

          Summary of Expenditure Classifications by Fund Type FY17 Budget


          FY17 Budget

          to FY2017

          FY2014 FY2015 FY2016 FY2016 FY2017 FY16 Budget of

          Description Actual Actual Budget Projected Budget % Variance % of Total




          Total:


          All Funds

          Salaries and Wages

          $24,525,730

          $24,802,287

          $26,480,036

          $25,282,565

          $26,268,430

          -0.80%

          16.08%

          Employee Benefits

          $18,962,356

          $19,800,357

          $20,060,452

          $20,343,960

          $25,397,776

          26.61%

          15.54%

          Contractual

          30,465,918

          39,731,855

          33,137,317

          35,450,281

          35,733,103

          7.83%

          21.87%

          Commodities

          1,905,877

          1,879,390

          2,120,851

          2,191,188

          2,316,942

          9.25%

          1.42%

          Capital Outlay

          15,240,353

          41,319,430

          38,943,413

          43,117,324

          27,566,824

          -29.21%

          16.87%

          Debt Service

          6,000,017

          8,184,657

          8,180,825

          8,180,825

          7,808,864

          -4.55%

          4.78%

          Interfund Transfers

          33,418,913

          20,441,535

          23,582,932

          20,891,268

          23,563,778

          -0.08%

          14.42%

          Transfer to Fund Bal/Ret

          Earnings

          76,743,081

          2,566,470

          8,164,858

          2,791,904

          8,783,218

          7.57%

          5.37%

          Other

          2,179,891

          2,442,802

          5,770,263

          2,179,196

          5,971,850

          3.49%

          3.65%

          Subtotal All Funds

          $209,442,136

          $161,168,783

          $166,440,947

          $160,428,511

          $163,410,785

          -1.82%

          100.00%


          image

          FY17 Budget by Expenditure Classification All Funds


          Transfer to Fund Bal/Ret


          Interfund Transfers 14.4%

          Debt Service 4.8%

          Earnings 5.4%

          Other 3.7%

          Salaries and Wages 16.1%


          Employee Benefits 15.5%

          Contractual

          21.9%


          Capital Outlay 16.9%


          Commodities 1.4%


          Official-colored-seal.jpg


          (This page intentionally left blank)


          Town of Palm Beach Reserves

          The Town Council has adopted nineteen financial policies, sixteen 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. During FY16, the Town Council approved a budget amendment transferring

          $2,530,250 from the unassigned fund balance to begin to fund the underground utility project. The amount represented the estimated prepayment of the assessments on Town owned properties.

          Twenty-five percent of the FY16 General Fund operating budget (General Fund budget less coastal transfer) is $15,629,586. The unassigned fund

          balance after the FY16 budget amendment exceeds the minimum requirement by $4,138,844.


          The General Fund Undesignated Fund Balance has consistently exceeded the required minimum level of 25%. The chart above details the General Fund Undesignated Fund Balance and the percent of budgeted expenditures the balance represents. For the FY17 budget, a transfer of

          $960,300 from fund balance will be used to fund the contingency reserve as directed by policy.


          image

          Reserves - Risk Fund


          The total reserve balance for the Risk Fund was

          $8,071,236 as of September 30, 2015. 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.


          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


          The Recreation Enterprise Fund reserve is to be maintained at a minimum level of 25% of budgeted revenues totaling $1,424,850 for FY16. 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.


          image

          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 FY15, the net asset balance for the Recreation Enterprise Fund (REF) was $4,303,456.

          Separate reserves have been set aside from this amount for the dock replacement, Par 3 Golf Course and Clubhouse Improvements, tennis improvements and equipment replacement.


          At the end of FY15, $2,880,038 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. For the FY16 and FY17 budget, additional funding has been appropriated to increase the funding for this reserve. The transfer to the General Fund was decreased by $100,000 in FY16 and by an additional $100,000 in FY17. These funds will be transferred 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 FY15, the balance is $351,246. In FY15 the Town Council approved a maintenance and improvement reserve for the Par 3 Club house which will be funded with a year- end transfer of 50% of the Par 3 golf course net profits. The reserve balance at the end of FY15 was $147,602.

          In FY10, a maintenance and improvement fee was implemented for the Tennis program. This reserve at the end of FY15 is $46,320 and has been set aside for improvements to the tennis centers.


          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 FY15 is $584,638.


          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 for year-end FY15 is $13,304,714. In FY13, the Town Council approved the use of a portion of this

          reserve ($4,867,019) for internal financing for small underground utility projects financed by special assessments. The balance available for future projects is $3,768,598.


          For FY17, the depreciation transfer will total $2,295,375 and expenditures for capital equipment are budgeted at $1,808,919.


          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, 2015, was

          $3,168,790. The FY16 appropriation for the pay-out of eligible accrued vacation, sick and compensatory time from this reserve is $634,500 and the FY17 appropriation will be $505,930.


          image

          Health Insurance Reserve


          The balance of the reserve in the Health Fund at the end FY15 is $5,740,869. 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. The balance has been improving over the past 5 years due to good claims experience. The funding for the health insurance fund has remained flat since FY2013.

          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. The Capital Improvement Fund has received a $1,000,000 transfer from the General Fund each year since 2010 to fund small capital projects that were not included in the 20 year plan. Once the bond proceeds have been spent on the remaining projects, it is proposed to return to pay-as-you-go financing. The FY17 appropriation was increased to $2,200,000 to

          begin to build the reserves for capital projects once the bond proceeds have been spent.


          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 $26,629,096 as of September 30, 2015. 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.


          Retirement Fund


          image

          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 FY15 were

          $190,764,490. The reserve balance declined due to investment losses in FY15.

          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 FY15 operating budget. The Capital Fund Contingency is appropriated at 10% of the capital budget, while the 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. In most years a small amount from the contingency is allocated 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 2017.

          Contingency Reserves FY2013 – FY2017

          Contingency

          2013

          2014

          2015

          2016

          2017

          General Fund Budget General Fund Actual

          843,000

          556,668

          860,000

          293,800

          909,000

          246,361

          944,686

          311,267

          960,300

          -0-

          CIP Budget CIP Actual

          201,000

          -0-

          205,000

          -0-

          205,000

          -0-

          208,000

          -0-

          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 and 2013, the rating agencies reviewed the Town’s credit ratings in preparation for the issuance of the 2010 and 2013 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 2010 and 2013 Revenue Bonds and confirmed the Town’s Aaa issuer credit rating.

          Standard and Poor’s issued a AA+ credit rating on the 2010 and 2013 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 below and on the following page summarize the trend of the unassigned net position, net asset balances, compensated absence, and replacement reserve actual balances for fiscal year ending FY11 through FY15 and estimated balances for FY16.

          Reserve Balances Fiscal Years 2011 – 2016 Est.


          Fund

          2011

          2012

          2013

          2014

          2015

          2016 Est.

          General Fund

          18,155,941

          21,424,261

          20,043,760

          22,298,680

          22,267,051

          22,700,000

          Compensated Absence

          3,621,915

          3,315,135

          3,390,226

          3,456,532

          3,168,789

          3,000,000

          Equipment Replacement Fund


          13,672,222


          14,870,188


          12,625,048


          12,232,932


          13,304,714


          13,000,000

          Recreation Enterprise Fund


          413,966


          707,381


          486,466


          1,025,665


          179,645


          179,000

          Recreation ERF

          458,002

          397,132

          472,319

          472,319

          584,638

          590,000

          Dock Replacement

          2,240,125

          2,395,723

          2,551,321

          2,715,680

          2,880,038

          3,140,000

          Par 3 M&I Reserve

          108,722

          162,138

          212,375

          279,252

          351,246

          421,446

          Tennis M&I Reserve

          16,418

          23,867

          31,075

          38,459

          46,320

          54,220

          Par 3 Clubhouse M&I

          147,602

          320,000

          Health Fund

          2,683,896

          3,234,334

          4,025,042

          5,025,134

          5,740,869

          5,732,839

          Risk Fund

          6,863,675

          7,990,553

          6,625,018

          7,297,409

          8,071,236

          8,010,157

          Capital Improvement Fund


          5,393,924


          5,623,928


          4,990,855


          5,670,416


          5,898,531


          6,800,000

          Health - OPEB Trust

          18,173,086

          20,942,253

          24,814,790

          27,628,798

          26,629,096

          27,372,667

          Pension Fund

          170,564,741

          187,286,530

          198,460,764

          216,001,372

          190,764,490

          190,710,979

          Total

          242,366,683

          268,373,423

          278,729,059

          304,142,648

          $280,034,265

          $282,025,946


          image


          image


          image

          Capital Expenditures FY2017


          Capital Expenditures


          The Town of Palm Beach defines a “capital expenditure as the cost(s) associated with the acquisition of land, improvements to land, buildings, vehicles, machinery, equipment, works of art, infrastructure and other tangible or intangible assets that are used in operations and that have an initial useful life extending beyond a single reporting period. Capital expenditures with the following minimum dollar threshold are recognized as depreciable as recommended by GFOA Best Practices:


          • Infrastructure - $50,000

          • Computer Software - $25,000

          • Machinery, equipment, vehicles and office furniture - $2,500

          • Computers - $1,500


      Capital expenditures are further categorized as “routine” and “non-routine.” Routine capital expenditures represent the cost of items that are purchased on an annual basis such as computer hardware, vehicles and various other types of equipment. Non routine capital expenditures represent the cost of items such as capital improvements projects that are not incurred on a regular basis.


      The Town defines the term “capital improvement” as a major repair, renovation or replacement of infrastructure which has an estimated cost of $50,000 or greater and extends the useful life by at least five years or adds capacity/square footage to an existing facility. Capital improvements are accounted for in the Capital Funds section of the budget.


      The purpose of the capital budget is to promote advanced planning by department directors and serves as a fiscal planning tool to forecast the demands on revenues and future borrowing needs. The capital improvements program is reviewed and updated annually.

      During the budget preparation process, departments provide the Public Works Director with updates on current projects, the projects scheduled for the next fiscal year and any changes that are requested from the previous five year plan. The plan is then presented to the Budget Review Committee for review prior to approval by Town Council. These changes include requests for new projects or modifications to projects already forecasted in the plan. Departments are required to give a description of the project, estimated costs and justification, funding resources and a statement of impact on the Town’s annual operating budget.

      image


      Capital Expenditures FY2017



      FY2017 Town-wide Capital Expenditures

      FY2017 Town-wide Capital Expenditures


      Department/

      General Fund

      Equipment Replacement

      Capital Funds

      Recreation Fund

      Total

      Information Systems

      $366,857

      $456,850

      $0

      $0

      $823,707

      Annual Depreciation

      289,857

      456,850

      0

      0

      746,707

      Major Computer Equip (>$1,500)

      77,000

      0

      0

      0

      77,000

      Human Resources

      677

      0

      0

      0

      677

      Annual Depreciation

      677

      0

      0

      0

      677

      Finance

      4,204

      0

      0

      0

      4,204

      Annual Depreciation

      4,204

      0

      0

      0

      4,204

      Planning/Zoning/Building

      117,097

      0

      0

      0

      117,097

      Annual Depreciation

      110,097

      0

      0

      0

      110,097

      Scanner

      7,000

      0

      0

      0

      7,000

      Fire-Rescue

      802,501

      392,979

      0

      0

      1,195,480

      Annual Depreciation

      646,294

      0

      0

      0

      646,294

      (2) Ford Escapes

      0

      46,000

      0

      0

      46,000

      Thermal Imaging Cameras

      0

      27,000

      0

      0

      27,000

      Audio Visual Equipment

      0

      17,150

      0

      0

      17,150

      Self Contained Breathing Airpacks

      19125

      240,000

      0

      0

      259,125

      Zoll Autopulse Systems

      9757

      55,930

      0

      0

      65,687

      Honda Rancher 4x4 ATV

      500

      6,899

      0

      0

      7,399

      Opticom Emergency Response System

      57,000

      0

      0

      0

      57,000

      Grant Reimbursable Equipment

      69,825

      0

      0

      0

      69,825

      Police

      652,332

      121,197

      0

      0

      773,529

      Annual Depreciation

      528,032

      0

      0

      0

      528,032

      Starchase Units

      16,800

      0

      0

      0

      16,800

      Townwide Camera System buildout

      40,000

      0

      0

      0

      40,000

      (5) Tactical Vests for SOU

      17,500

      0

      0

      0

      17,500

      2017 Ford Escape

      23,000

      0

      0

      0

      23,000

      (2) Supervisor/(2) Patrol Vehicles

      27,000

      113,197

      0

      0

      140,197

      Evidence Drying Locker

      0

      8,000

      0

      0

      8,000

      Public Works

      741,014

      1,164,193

      22,423,757

      0

      24,328,964

      Annual Depreciation

      716,214

      0

      0

      0

      716,214

      Ford F250 w/ Utility Unit

      0

      30,160

      0

      0

      30,160

      Ford F450 Utility Body

      0

      53,680

      0

      0

      53,680

      (2) Transfer Trailers

      0

      267,000

      0

      0

      267,000

      Isuzu Flat Bed

      0

      50,376

      0

      0

      50,376

      (4) Isuzu NF 154/6 yd RL

      0

      362,000

      0

      0

      362,000

      (3) International Dump Trucks

      0

      267,000

      0

      0

      267,000

      International Dump Truck RS3

      0

      133,977

      0

      0

      133,977

      Equipment Maintenance Machinery

      11,300

      0

      0

      0

      11,300

      Video Detection System

      13,500

      0

      0

      0

      13,500

      Pay-as-you-go Projects

      0

      0

      7,115,111

      0

      7,115,111

      Coastal Projects

      0

      0

      6,396,323

      0

      6,396,323

      Worth Avenue Assessment District

      0

      0

      253,042

      0

      253,042

      2013 Accelerated Projects

      0

      0

      8,659,281

      0

      8,659,281

      Recreation Department

      0

      0

      0

      997,100

      997,100

      Annual Depreciation

      0

      0

      0

      955,329

      955,329

      Par 3 – Pull Behind Topdresser

      0

      0

      0

      15,000

      15,000

      Par 3 – 2 Carryall Vehicles

      0

      0

      0

      14,700

      14,700

      Par 3 – Eco Lawn Walking Topdresser

      0

      0

      0

      6,600

      6,600

      Par 3 – Tor sidewinder Rough Mower

      0

      0

      0

      30,000

      30,000

      Par 3 – South Veranda Improvements

      0

      0

      0

      250,000

      250,000

      Phipps Ocean Park Playground

      0

      0

      0

      50,000

      50,000

      Town Docks Repairs

      0

      0

      0

      288,489

      288,489

      Total Capital Expenditures

      $2,684,682

      $2,135,219

      $22,423,757

      $997,100

      $28,240,758


      image

      General Fund Revenue Expenditure Comparison FY2017


      General Fund Revenues and Expenditures Budget Comparison

      image

      image

      Fiscal Years 2016-2017


      Budget FY2016

      Budget FY2017

      FY16 vs. FY17

      $ Difference

      FY16 vs. FY17

      % Change


      Revenues

      Ad Valorem Taxes

      $47,131,000

      $49,494,500

      $2,363,500

      5.01%

      Non Ad Valorem Taxes

      8,005,000

      8,103,000

      $98,000

      1.22%

      Licenses & Permits

      7,103,320

      7,303,500

      $200,180

      2.82%

      Intergovernmental

      1,135,537

      1,178,500

      $42,963