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TOWN OF PALM BEACH, FLORIDA


COMPREHENSIVE ANNUAL BUDGET FISCAL YEAR 2015

(October 1, 2014 - September 30, 2015)


Mayor and Town Council


Gail L. Coniglio, Mayor

Robert N. Wildrick, Town Council President William J. Diamond, Town Council President Pro-Tem

Richard M. Kleid, Town Council Member Michael J. Pucillo, Town Council Member Penelope D. Townsend, Town Council Member


Town Manager


Peter B. Elwell


Prepared by the Finance Department Jane Struder, Finance Director

(561) 838-5400

www.townofpalmbeach.com

TOWN O

ORGANIZAT

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F PALM BEACH

IONAL STRUCTURE


CITIZENS OF PALM BEACH


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ELECT



MAYOR

Gail L. Coniglio

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TOWN COUNCIL



PRESIDENT PRESIDENT PRO-TEM

Robert N. Wildrick William J. Diamond Richard M. Kleid Michael J. Pucillo

Penelope D. Townsend

APPOINTS


TOWN ATTORNEY

John C. Randolph


TOWN MANAGER

Peter B. Elwell

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ADVISORY BOARD AND COMMISSIONS



DEPUTY TOWN MANAGER

Thomas G. Bradford


DIRECTOR OF RECREATION AND SPECIAL PROJECTS

Jay Boodheshwar


DIRECTOR OF PUBLIC SAFETY

Kirk W. Blouin


DIRECTOR OF

Human Resources Danielle Olson

DIRECTOR OF PUBLIC WORKS

H. Paul Brazil


DIRECTOR OF PLANNING, ZONING AND BUILDING

John Page


DIRECTOR OF 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


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Given its size and the variety of information it contains, the budget document can be an overwhelming undertaking to review. The purpose of this section is to provide the reader with a guide to the document’s contents: where and how to find the information and how to understand or use the information.


The budget document has been prepared in a summary format intended to be easily understood by the general public. The following describes each of its major sections:


Introduction


The budget message or transmittal letter is the best place to start. It is most important in understanding where we have been and where we are going in the upcoming year. The letter provides a broad perspective of services provided and discusses taxes and millage rates, changes in operations, significant differences in revenues and expenditures, and the focus and direction of the budget year.


The introduction section also includes general information about the Town, its budget philosophy and process, financial policies (which form the foundation of the Town’s budget development and financial management processes), and other general information.


Budget Summary, General Fund, Revenues, Expenditures, Departmental Tabs and Other


The Budget Summary, General Fund, Revenues, Expenditures including Departmental and Other tabs include various presentations of the general fund budget. The Budget Summary section includes summary budget information for all funds and an analysis of Town reserves. The General Fund section includes a financial trend analysis of Revenues and Expenditures. The Revenues tab includes a detailed five-year general fund revenue history, as well as narrative and charts regarding major general fund revenue history. The Expenditures tab includes an exhibit containing four years of expenditure history by program, as well as summary budget charts.


An overview of each department/program, the largest portion of the General Fund budget, is included in this section. Each department’s section may include the following: A revenue and expenditure summary, personnel complements, an organizational chart, mission statement, goals and objectives, performance measures and workload indicators.


Debt Service, Capital, Enterprise, Internal Service and Trust & Agency Funds


These sections include budget summaries, program descriptions, trend analyses and income statement analyses for the Town’s governmental (other than general), enterprise, internal service and trust & agency funds.


Appendix


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


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


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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, 2013.


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.


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Introduction

Budget Message 1

Strategic Planning and Key Results Measurement 21

Introductory Information

Map 29

Town Overview/Demographics 30

Assessed Valuation and Millage Rate 31

Town History 35

Financial Policies 37

Budget Preparation Process 42

Budget Calendar 47

Financial Structure 48

Budget Summary

Fund Budget Overview 53

Budget Summary by Fund Type, Revenues and Expenditures 54

Summary of Major Revenues by Fund Type 56

Summary of Expenditure Classifications by Fund Type 58

Reserve Analysis 61

Capital Expenditures 69

General Fund

General Fund Revenues and Expenditures Budget Comparison 71

Revenues

General Fund Revenues 73

Major Revenue Sources 77

Expenditures

General Fund Expenditures 87

Legislative

Legislative (111) 91

General Government

General Government (113) 93

Town Manager

Town Manager’s Office Organization Chart 95

Administrative Management (121) 98

Advice and Litigation

Advice and Litigation (122) 99

Information Systems

Information Systems (125) 101

Human Resources

Human Resources Organization Chart 106

Human Resources (123) 109

Finance

Finance Organization Chart 116

Finance Department Revenue and Expenditure Summary 118

Records Management (131) 119

Financial Management (141) 122

Purchasing (144) 125

Planning, Zoning and Building

Planning, Zoning and Building Organization Chart 128

Planning, Zoning and Building Department Revenue and Expenditure Summary 130

Planning and Zoning (211) 132

Permit Issuance (212) 134

Inspection and Compliance (213) 137

Landmarks Preservation (214) 139

Fire Prevention (215) 141

Code Enforcement (216) 143

Fire-Rescue

Fire-Rescue Department Organization Chart 146

Fire-Rescue Department Revenue and Expenditure Summary 150

Fire Administration (411) 152

Operations (417) 155

Training (418) 159

Ocean Rescue (419) 161

Police

Police Department Organization Chart 164

Police Department Revenue and Expenditure Summary 167

Administrative Management (421) 169

Organized Crime Vice and Narcotics – OCVAN (422) 172

Records Information System Unit (423) 174

Training and Community Relations Unit – TCR (424) 175

Communications Unit (425) 178

Crime Scene/Evidence Unit (426) 180

Patrol (428) 182

Criminal Investigation Unit (429) 186

Parking Control Unit (430) 188

Public Works

Public Works Department Organization Chart 192

Public Works Department Revenue and Expenditure Summary 196

Administrative Management (511) 198

Street Repair and Maintenance (521) 199

Traffic Control (523) 201

Street Lighting (524) 203

Storm Sewer Maintenance (531) 205

Sanitary Sewer Maintenance (532) 208

Sanitary Sewage Treatment (533) 211

Residential Collection (541) 212

Commercial Collection (542) 214

Refuse Disposal (543) 215

Yard Trash Collection (544) 216

Recycling (545) 218

Beach Cleaning (546) 220

Landscape Maintenance (551) 221

Facility Maintenance (554) 223

Meter Maintenance and Collection (558) 225

General Engineering Services (561) 226

Right of Way Inspections (565) 228

Equipment Operation and Maintenance (571) 229

Coastal Management (581) 231

Other

Library Services (321) 234

Transfers to Other Funds (611 to 625) 235

Emergency Management (710) 236

Contingent Appropriations (711) 237

Debt Service

Debt Administration 239

2010A CIP Revenue Bond (Fund 205) 244

Capital Funds

Capital Funds 245

Capital Projects by Project Type and Fund 247

Impact of Capital Investments on Operating Budget 248

Capital Improvement Fund (Fund 307)

Five Year Capital Improvement Pay-as-you-go/Facilities Program 249

Pay-as-you-go Capital Improvement Fund 250

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

CCMP FY14 Accomplishments and FY15 Action Plan 251

Comprehensive Coastal Management Project Fund 263

Coastal Management Program Budget 264

Town Facilities Project Fund (Fund 310)

Town Facilities Fund 265

Worth Avenue Assessment District (Fund 311)

Worth Avenue Maintenance 267

Accelerated Capital Fund (Fund 312)

2010A Accelerated Capital Projects Fund 269

Accelerated Capital Fund (Fund 314)

2013 Accelerated Capital Projects Fund 271

Accelerated Capital Improvement Program Budget Report 272

Project Fact Sheets

Recreation Enterprise Fund (Fund 403)

Recreation Enterprise Fund Organization Chart 298

Recreation Enterprise Fund Revenue and Expenditure Summary 300

Marina 301

Golf Course 304

Tennis 310

Recreation Center 315

Administration 318

Capital Program 319

Depreciation Program 320

Equipment Replacement 321

Internal Service Funds

Self Insurance – Risk

Self Insurance Fund – Risk Management (Fund 501) 323

Self Insurance – Health

Self Insurance Fund – Health Benefit (Fund 502) 327

Equipment Replacement Fund

Equipment Replacement Fund (Fund 320) 329

Trust and Agency Funds

Retirement Fund 333

Employees Retirement System (Fund 600)

Employees Retirement Fund 339

Health Insurance Trust (Fund 610)

Health Insurance Trust 341

Retiree Sliding Scale Insurance Premium Rates 2015 345

Appendix

Authorized Positions 349

Donation Reserve Account Summary 354

Financial Policies

Fund Balance 355

Contingency Reserve – General Fund 361

Designation of General Fund Balance - Liability Related to Compensated Absences Leave Balances 362

Reserve for Encumbrances, Continuing Appropriations, and Prepaid Expenses 363

Contingency Reserve – Capital Fund 364

Equipment Replacement Reserve 365

Contingency Reserve – Equipment Replacement Fund 366

Recreation Enterprise Fund Reserve 367

Dock Replacement Reserve – Recreation Enterprise Fund 368

Contingency Reserve – Recreation Enterprise Fund 369

Contingency Reserve – Recreation Enterprise Fund – Capital Fund 370

Equipment Replacement Reserve – Recreation Enterprise Fund 371

Reserve for Catastrophic Exposures/Emergencies – Risk Fund 372

Contingency Reserve – Risk Fund 373

Contingency Reserve – Health Insurance Fund 374

Budgetary Control 375

Debt Management Policy 376

Revenue Shortfall Plan 377

Glossary

Glossary 379

Index

Index… 389


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October 1, 2014


TOWN OF PALM BEACH

Office of the Town Manager


Dear Honorable Mayor, Town Council

and Citizens of the Town of Palm Beach


I am pleased to present the Comprehensive Annual Budget for the Town of Palm Beach for the fiscal year beginning October 1, 2014, and ending September 30, 2015, in accordance with Section 2-541 of the Town’s Code of Ordinances and Chapter 95-495 of the laws of the State of Florida. The budget was prepared to comply with generally accepted accounting principles (GAAP) and all applicable Town, State, and Federal requirements. After careful review by the Mayor and Town Council in several public meetings, formal citizen input was invited at two (2) public hearings. The final budget adoption occurred on September 17, 2014.


This budget document is a financial plan that sets forth the policy framework of the Town and provides the Mayor, Town Council, interested citizens, and staff with information supporting the adopted policies. The document includes aggregate financial and organizational data as well as individual program descriptions and expenditure information for every functional area of our Town government.


The FY15 budget represents staff’s continued efforts to operate Town government in the most cost effective manner. We started with the April 2014 Long Term Financial Plan (LTFP) forecast for FY15 as a baseline and then departments identified over a million dollars of additional savings ($1,158,287), while maintaining all current levels of service and proposing strategic enhancements to address important needs. The budget contains an increase in property taxes of $4,776,600 to fund the annual estimated costs for the 10-year Coastal Protection Program that was unanimously approved by the Town Council on October 8, 2013. All Town functions other than the coastal program can be funded with exactly the same amount of property taxes as in FY14.


Overall, the budget reflects an increase of 2.89% over FY14. The operating budget without the coastal transfer reflects an “apples to apples” increase of 2.14% over FY14. The LTFP estimated a 4.7% increase, including the coastal funding.


FY15 Townwide Budget Priorities


At the April 8, 2014, Town Council meeting, the Town Council adopted the Townwide budget priorities for FY15. The 5 budget priorities adopted are as follows:


  1. Adopt annual operating expenditures that would result in no millage rate increase if ad valorem taxes were not increasing to fund coastal protection and the ACIP debt service. The adopted budget achieves this goal.

  2. Adopt a millage rate sufficient to fund the annual coastal protection plan requirements and the additional debt service obligations for the ACIP Phase 2. The adopted budget achieves this goal.


  3. Look for ways to offset Coastal Protection millage rate increase. There were very limited opportunities to achieve this goal without negatively impacting the level or quality of Town services to the community.


  1. Continue to aggressively monitor the Port Expansion, with all governmental agencies, protecting against all of the long term impacts to the island. This is ongoing.


  2. Continue to aggressively monitor FDOT’s Flagler Memorial Bridge Project and implement coordinated actions with other governmental authorities (State, County, City of West Palm Beach) to mitigate impacts of any short-term or long-term complete closure of the bridge. This is ongoing.


Maintaining Fiscal Sustainability


Since FY08, the Town’s elected officials and staff members have worked diligently to reduce costs and improve efficiencies wherever possible. The FY15 General Fund budget is still below ($40,256) the FY09 peak, even after the transfer to coastal protection. In the “apples to apples” comparison of the operating budget, excluding coastal transfers, expenditures for FY15 are $2,817,256 (4.31%) less than in the FY09 budget.


The tables on the following page compare the FY09 Budget to the FY15 Budget.



Revenue


FY2009


FY2015

FY09 vs. FY15

Difference

%

Change

Ad Valorem Taxes

$42,543,000

$43,424,300

$881,300

2.07%

Non Ad Valorem Taxes

7,043,000

7,937,500

894,500

12.70%

Licenses & Permits

5,612,900

6,835,600

1,222,700

21.78%

Intergovernmental

1,261,400

1,079,750

(181,650)

-14.40%

Charges for Services

3,158,400

3,573,600

415,200

13.15%

Fines and Forfeitures

1,521,200

1,210,000

(311,200)

-20.46%

Investment Earnings

1,201,300

578,694

(622,606)

-51.83%

Miscellaneous

309,300

221,000

(88,300)

-28.55%

Interfund Transfers

550,000

885,000

335.000

60.91%

Transfers–Contingency/Compensated Absences

2,135,100

1,549,900

(585,200)

-27.41%

Total Revenue Budget

65,335,600

67,295,344

1,959,744

3.00%

Fund Balance Transfer - Coastal Protection

2,000,000

0

(2,000,000)

-100.00%

Total Revenues

$67,335,600

$67,295,344

($40,256)

-.06%



Expenditure Category


FY2009


FY2015

FY09 vs. FY15

Difference

%

Change

Salary and Wages

$28,624,800

$24,927,999

($3,696,801)

-12.91%

Retirement Benefits

6,649,700

6,682,615

32,915

0.49%

Other Employee Benefits

9,166,730

8,470,910

(695,820)

-7.59%

Contractual

7,588,890

8,565,388

976,498

12.87%

Commodities

1,698,390

1,753,846

55,456

3.27%

Capital Outlay

2,804,666

1,876,644

(928,022)

-33.09%

Other

8,802,424

10,240,942

1,438,518

16.34%

Total Operating Expenditures

$65,335,600

$62,518,344

($2,817,256)

-4.31%

Coastal Transfer

2,000,000

4,777,000

2,777,000

138.85%

Total General Fund Budget

$67,335,600

$67,295,344

($40,256)

-0.06%


The combined impact of expenditure reductions and revenue increases since 2009 has significantly improved the Town’s long term financial forecasts. The 2009 Long Term Financial Plan (LTFP) showed deficits beginning in FY12 and increasing dramatically over time. A comparison of the current forecast updated with the FY15 budget versus the 2009 and 2014 LTFP forecasts are presented on the following page. The FY15 budget forecast shows mostly surpluses and one small manageable deficit through FY20.


LTFP Forecast as of April 2009


FY15


FY16


FY17


FY18


FY19


FY20

Revenues

73,565,312

75,625,541

77,746,505

79,930,774

82,179,515

84,495,429

Expenditures

81,876,195

86,140,002

90,562,822

95,221,633

100,114,031

104,748,413

Surplus/(Deficit)

(8,310,883)

(10,514,460)

(12,816,317)

(15,290,859)

(17,934,516)

(20,252,980)


LTFP Forecast as of April 2014


FY15


FY16


FY17


FY18


FY19


FY20

Revenues

68,469,428

70,480,514

72,417,934

74,335,286

76,492,907

78,563,251

Expenditures

68,453,631

70,358,583

72,864,754

74,143,757

76,417,887

79,079,514

Surplus/(Deficit)

15,797

121,931

(446,822)

191,528

(1,924,980)

(516,263)


LTFP Forecast FY15 Budget


FY15


FY16


FY17


FY18


FY19


FY20

Revenues

67,295,344

69,191,044

71,137,950

73,016,935

75,132,719

77,161,163

Expenditures

67,295,344

69,147,454

71,214,208

72,385,570

74,498,793

76,907,810

Surplus/(Deficit)

0

43,590

(76,258)

631,364

633,926

253,353


GENERAL FUND


FY2015 Budget Highlights


The FY15 budget represents excellent work by all Town departments. As mentioned above, the expenditure budget is $1,158,287 below the April 2014 Long Term Financial Plan forecast. Identifying these additional savings enabled staff to achieve Town Council’s goal of a budget which could be funded with the same amount of property taxes as in FY14 for all purposes except the Coastal Protection Program tax increase.


Revenues

In the General Fund, total revenues are expected to increase by $1,888,851 (2.89%) from the adopted FY14 budget. The changes by revenue type are shown on the table on the following page.



Revenue


FY2014


FY2015

FY14 vs. FY15

Difference

% Change

Ad Valor

em Taxes

$38,647,700

$43,424,300

$4,776,600

12.36%

Non Ad alorem Taxes

7,367,500

7,937,500

570,000

7.74%

Licenses & Permits

6,588,200

6,835,600

247,400

3.76%

Intergovernmental

1,052,000

1,079,750

27,750

2.64%

Charges for Services

3,552,275

3,573,600

21,325

0.60%

Fines and Forfeitures

1,181,000

1,210,000

29,000

2.46%

Investment Earnings

425,373

578,694

153,321

36.04%

Miscellaneous

247,845

221,000

(26,845)

-10.83%

Interfund Transfers

885,000

885,000

0

0.00%

Transfers For Contin ency and Compensated Absences

1,459,600

1,549,900

90,300

6.19%

Total Revenue Budget

61,406,493

67,295,344

5,888,851

9.59%

Transfer from “Excess” Fund Balance For Coastal Protection

4,000,000

0

(4,000,000)

Total Revenues and Fund Balance Transfer

$65,406,493

$67,295,344

$1,888,851

2.89%


g

Ad Valorem Revenue

The LTFP called for property taxes to increase by 15.81% from FY14 to FY15 in order to fund the 10-year coastal protection plan and operating cost increases. The FY15 budget contains an increase in property tax revenues of 12.36%, sufficient to cover the Coastal Protection Fund transfer only. We were able to absorb all operating cost increases with a combination of non-ad valorem revenue increases and

reduced costs elsewhere in the budget.



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The Town Council voted unanimously on October

8, 2013 to use ad valorem taxes to pay for the Town’s 10-year Coastal Protection plan. The total increase in tax revenue necessary to begin funding the 10-year plan is

$4,776,600. Because of a 7.53% increase in taxable value, this 12.36% increase in taxes required a millage rate increase of 4.9%. Additional millage rate information for FY15 is shown in the chart on the following page:


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Taxable Value

$13,421,075,355



FY15

Rolled-Back Millage

Millage Rate Tax Revenue

3.4058

$43,424,300

3.0282

$38,609,615

d

Ad Valorem Tax

E

xamples for Property Valued

a

t $1 Million


Homestea Property


Homestead Value Increased by 1.5%


$1,015,000


$1,015,000

Homestead Exemption

$(50,000)

$(50,000)

Adjusted Taxable Value

$965,000

$965,000

Town Taxes

$3,287

$2,922

Increase over FY14

$203

$(162)

Property w/o Homestead Exemption

roperty Value Increas d by 7.53

$1,075,326

$1,075,326

own Taxes

$3,662

$3,491

Increase over FY14

$415

$244


P

T

e

%

Non Ad Valorem Revenue

Total non ad valorem revenues (excluding transfers of fund balance) are anticipated to increase by $1,112,251 from the FY14 revenue budget. The differences by revenue type are described in detail, as follows:


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$570,000 (7.74%), due to

increases in utility tax and franchise fee revenue based upon better than anticipated revenue collections in FY14 and anticipated revenue from the renegotiated gas franchise agreement with FPUC.


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Fund Balance


As of September 30, 2013, the Town’s unassigned General Fund balance was

$20,043,760. During FY14, the Town Council authorized a transfer of $3,000,000 from the unassigned General Fund balance to the Coastal Protection Fund, reducing the total

unassigned General Fund balance to $17,043,760.

Town policy requires that the General

Fund maintain a minimum unassigned fund balance of 25% of budgeted operating expenditures (General Fund budget less coastal transfer). This requires a minimum

unassigned fund balance of $15,629,586 for the FY15 budget.

Therefore, the Town’s

unassigned General Fund balance is $1,414,174 above the policy required minimum for

FY15.

The FY15 budget includes a tran

fer of $909,000 from the unassigned fund

balance to the General Fund contingency reserve.

The budget also includes $640,900 for

compensated absence payouts to be funded from the compensated absence reserve.

Personnel Complement


The total personnel complement (for all funds Townwide) for FY15 is 359.68 full-time equivalent personnel (FTEP), which is an increase of 2.58 FTEP from the adopted FY14 budget. This includes the following position changes: Increase of 2 Information Systems analysts, 1 combination plan examiner, and 2 full-time telecommunicators; upgrade of a Human Resources position and a Recreation Enterprise Fund position from .75 FTE to full-time; elimination of 2 part-time telecommunicators and an office assistant position in the Police Department; and reduction in temporary and part-time personnel in the Recreation Department. The Recreation Enterprise Fund numbers for FY13 and FY14 have been modified from prior budget documents to correct for the exclusion of temporary employees from the personnel complement report for those years. A chart of the FTEP by department is shown below.


Department/Fund

FY11

FY12

FY13

FY14

FY15

Town Manager

5.00

5.10

5.10

5.10

5.10

Information Systems

6.00

6.00

6.00

6.00

8.00

Human Resources

4.57

4.52

4.38

4.38

4.63

Finance

17.45

17.95

17.64

18.14

18.14

Planning, Building & Zoning

27.25

26.75

26.25

26.25

27.25

Fire-Rescue

86.40

82.90

79.90

75.90

75.90

Police

102.85

103.85

104.35

103.35

103.35

Public Works

86.35

86.85

88.02

88.04

88.04

Recreation Enterprise Fund

27.48

25.71

25.80

26.71

26.04

Risk Fund

1.00

1.00

1.00

1.00

1.00

Health Fund

0.53

0.80

0.79

0.79

0.79

Kruesler Park

2.00

0.00

0.00

0.00

0.00

OPEB Trust

0.45

0.72

0.73

0.73

0.73

Retirement Fund

0.00

0.50

0.71

0.71

0.71

Total Authorized Positions

367.33

362.65

360.67

357.10

359.68


Since peaking in FY07 at 415.23, Town staffing has decreased by 55.55 FTEP (13.4%). Staff’s intent with the increase in personnel in the FY15 budget is to accomplish a limited, strategic, and cost effective re-allocation of resources to improve the level and/or quality of service in areas that are most critical.

OTHER FUNDS


Below are highlights from the budgets for other Town funds. Additional information can be found at the tabs in the document behind the General Fund information. The Town’s other funds include: Debt Service, Capital Improvement Funds, Recreation Enterprise Fund, Internal Service Funds (Health, Risk, Equipment Replacement), and Trust Funds (Pension and OPEB Trust).


Debt Service Funds (205, 206)


The Debt Service Funds provide for the payment of principal and interest on the Town’s outstanding bonds. During FY10, the Town authorized the issuance of $57,035,000 for a portion of the Town’s Accelerated Capital Improvement Program (ACIP) and refunding all of the Town’s existing debt. In addition, bonds totaling $14,770,000 were issued for the Worth Avenue Commercial District Project. In 2013, the Town issued $55,590,000 for the second phase of the ACIP, “bondable” coastal projects, and the Town’s portion of the Par 3 clubhouse project.


The Town’s outstanding debt as of September 30, 2014 is shown below:


Outstanding

Year Principal Balance @

Issued September 30, 2014 Purpose

2010A

$53,025,000

First Phase of the ACIP and Refund Outstanding Debt.

2010B

$12,130,000

Worth Avenue Commercial District Project

2013

$55,590,000

Second Phase of ACIP, Bondable Coastal,

and Par 3 Clubhouse

Total

$120,745,000


As of September 30, 2014, the Town’s net bonded debt amounted to 18% of the legal limit of $671,053,768 (5% of preliminary FY15 taxable value of $13,421,075,355).


The Town’s credit ratings were reevaluated with the issuance of the 2013 bonds. Moody’s Investors Service issued a rating of Aa1 for the Revenue Bonds and a Aaa issuer rating.

Standard and Poor’s credit rating on the Revenue Bonds is AA+ and the issuer credit rating is AAA. These are the highest ratings these two services issue and represent the highest quality investment grade debt.


The 2010A and 2013 Series Revenue Bonds debt service is funded from non-ad valorem revenues. A portion of each ($202,200) is funded through the Recreation Enterprise Fund for the Town’s portion of the Par 3 Renovation, and a portion is funded through the Coastal Protection Fund ($734,613). The non-ad valorem revenue transfer from the General Fund for FY14 is $6,100,000. Total debt service for the 2010A and 2013 bonds is $7,210,425. The

above transfers total $7,036,813. The balance ($173,612) will be funded through the reserves of the debt service fund.


The 2010B Series Revenue Bonds debt service appropriation of $775,000 is funded through non ad valorem assessments on the property owners within the Worth Avenue Assessment District.


Capital Improvement Funds (307, 309, 310, 311, 312, 313)


For FY15 the following are included in the Pay As You Go capital budget:



Projects that are to be funded in FY15 from the Bond Proceeds Fund for the ACIP program are listed under the Capital Funds tab.


Coastal Protection


The CCMP Construction Fund (309) is used to fund the construction costs of the coastal projects. The details of the FY15 budget for coastal protection can be found later in this document. Administrative costs of $158,085, which were previously funded through the General Fund, have been moved to the CCMP Construction Fund, consistent with the adoption of the 10-year Coastal Protection Plan.


As stated earlier in this document, the Town Council approved ad valorem taxes as the funding source for the coastal protection projects. The $4,777,000 to begin funding the 10-year program has been budgeted as a transfer from the General Fund to the Coastal Protection Fund.


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

Recreation revenue is increasing by 5.3% from the FY2014 budget. No increases were recommended for the Recreation Center rental or tennis fees. The growth of participation at the Recreation Center and the two tennis centers continues to be the primary strategy for increasing revenue in these two divisions.

Tennis revenue projections have been adjusted to reflect an overestimation from FY14 and the current general decline in tennis participation, locally and nationally. However, the cost recovery goal of 60% is expected to be achieved through continued cost control measures and a slightly lower FY15 expenditure budget. The focus for tennis remains on increasing participation, as several downward adjustments were made to the nonresident fees in FY14, which helped increase play for residents and their nonresident playing partners. This trend is expected to continue, thus increasing revenues.


Recreation Center revenues are expected to experience a slight increase. The vast majority of revenue is generated from program participation, so the revenue focus for the Recreation Center is also on developing new programs and increasing participation. Modest and strategic fee increases to individual activities will be in effect for the upcoming fiscal year, but staff is not recommending changes to building rental rates.


Town Docks revenues for FY15 are expected to be higher than in FY14. Increases for the following dockage rates for annual, seasonal and transient customers have been included in the budget: 3% for the 100 amp single phase slips, 6% for the 100 amp 3 phase 480v slips, and 7% for the 200 amp 3 phase 480v slip. Recent upgrades to shore power at the 480v slips have resulted in higher consumption costs to the Town. The increases for those slips will help offset some of the higher energy costs we are experiencing. The overall increases will not affect our place in the market, and should not hinder our pursuit of achieving 100% occupancy with long-term leases in the coming years.


Golf Course revenue is expected to increase. Increases in green fees, along with minor increases to cart fees, club rentals and annual passes have been included in the budget. The demand for tee times indicates these increases to fees will be tolerated and not affect either the volume of play or the Par 3’s place in the market. Additionally, with the new clubhouse, play has increased significantly, and the food and beverage operations in the clubhouse provide a new source of revenue.


Expenditures

The FY15 REF budget represents an increase of 5.5% from the FY14 budget. Both the Administration and Par 3 Golf Course division’s expenses will increase due to personnel changes. For Administration, an increase of .25 FTE to the .75 FTE Office Assistant I position has been included. The cost of this change is approximately $10,000. The Town Docks budget will see a minor increase from FY14, while the Tennis and Recreation Center budgets are slightly lower than FY14, -1.0% and -2.7%, respectively. The transfer of fund profits to the General Fund is budgeted at $885,000, the same as in FY14.


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 increased by $49,362 (2.63%) from FY14 to FY15.


The employer contribution for FY15 to the Health Insurance Fund (502) has remained the same as in FY14 due to savings realized from the new wellness program and the modifications made in FY14 to the 3-tier insurance program.


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 FY15 is $1,817,444. This amount represents a decrease of $60,491. Of the total depreciation for FY15, $247,000 represents the annual depreciation for computer equipment and $1,569,644 represents the annual depreciation for other fixed assets. In FY15, the total expenditures for equipment purchases will be $1,585,630. A detailed listing of planned equipment purchases is located in the Internal Service Funds section of this budget document.


Trust Funds - Retirement (600, 606, 607)


The FY15 actuarially determined contribution to the defined benefit plan totals $6,376,652, an increase of 5.06%. The increase is caused by the change in the investment return assumption from 8% to 7.5% and the volume of retirements in FY13. This amount is partially offset by a transfer from the prepaid contribution reserve in the Retirement Fund of $750,000. The Town accumulated a prepaid reserve in the Retirement Fund due to the “overpayment” to the fund by systematically contributing the actuarially determined amount rather than the State required amount (which was calculated as a percent of payroll). A total of $2,169,323 had been reserved as a prepaid contribution in the Retirement Fund. In FY14 $930,690 was used to partially offset the first-year costs of the investment return assumption change. After the FY15 offset, a balance of $488,633 will be left in the prepaid reserve.


The Town contribution comparison for FY14 vs. FY15 is shown in the table below.


FY14

FY15

$ Change

% Change

General Employees

$1,873,887

$1,856,320

$(17,567)

-0.94%

Lifeguards

144,734

153,086

7,352

5.08%

Police

1,979,219

2,144,661

165,442

8.36%

Firefighters

2,071,503

2,223,585

152,082

7.34%

Subtotal

$6,069,343

$6,376,652

307,309

5.06%

Less: Prepaid Contribution

($930,690)

(750,000)

180,690

-19.41%

Amount included in Budget

$5,138,653

$5,626,652

$487,999

9.5%

Employer Defined Benefit Funding for Employee Pensions


FY11

FY12

FY13

FY14

FY15

General

$2,927,020

$651,882

$1,223,869

$1,873,887

$1,856,320

Lifeguards

148,364

15,600

125,294

144,734

152,086

Police

2,828,758

1,213,681

1,257,107

1,979,219

2,144,661

Fire-Rescue

3,189,802

1,635,237

1,370,637

2,071,503

2,223,585

Total

$9,093,955

$3,516,400

$3,976,907

$6,069,343

$6,376,652


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 retirement program 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 FY14, the Town Council approved a 4% discretionary DC contribution at a cost of $589,485. For FY15, the Town Manager recommended and the Town Council approved a 4% discretionary DC contribution at a cost of

$581,801. Total employer contributions to the DC plan are shown in the chart below:


Employer Defined Contribution Funding


FY12

Actual

FY13

Actual

FY14

Budget

FY15

Budget

General

$123,785

$371,693

$759,611

$770,326

Lifeguards

2014

5,428

11,180

11,242

Police

43,163

158,090

310,024

303,712

Fire-Rescue

47,748

172,855

201,867

221,612

Total

$216,710

$708,066

$1,282,682

$1,306,892


Health Insurance (OPEB) Trust (610)


The actuarially determined transfer to the OPEB trust from the General Fund in the FY15 budget is $1,577,000. This amount is $71,000 (4.71%) more than FY14. The increase is due to the change in 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.


Inventory of Assets


The estimated inventory of parts, supplies, fuel and materials on hand as of October 1, 2014, is $470,038 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) is

$20,319,712.


FINANCIAL POLICIES


The Town has 18 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.


ACKNOWLEDGMENTS


Preparation of this budget was a team effort involving the Mayor and Town Council, all Town departments, and the staff of the Town Manager’s Office. I am particularly grateful for the dependably sound advice of Finance Director Jane Struder who, along with Assistant Finance Director Cheryl Somers and Accounting Supervisor Amy Wood, provided overall leadership and coordination on this project.


Respectfully submitted,


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Peter B. Elwell Town Manager


cc: Department Directors

Thomas G. Bradford, Deputy Town Manager


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 FY15.


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.


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The Vision/Strategic Plan/Goals and Performance Measurement Process


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Townwide Budget Priorities for FY2015


The Town Council’s annual budget priorities for FY2015 are outlined below. These priorities were developed with input from the Mayor and Town Council, Town Manager, Department Directors, and staff at the April 8, 2014, Town Council meeting.


Once the Mayor and Town Council set the FY2015 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.


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The following is a breakdown of the Town Council Priorities 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

Adopt annual operating expenditures that would result in no millage rate increase if ad valorem taxes were not increasing to fund coastal protection and the ACIP debt service.

Department

Department Goals

Town Manager and Finance

  • Work with the Town Council and Department Staff to prepare a FY15 budget that is fiscally responsible and results in no millage rate increase except for coastal protection and ACIP debt service.

Town Council Priority #2

Adopt a millage rate sufficient to fund the annual coastal protection plan requirements and the additional debt service obligations for the ACIP Phase 2.

Department

Department Goals

Town Manager and Finance

  • Work with the Town Council and Department Staff to prepare a FY15 budget that is fiscally responsible and results in no millage rate increase except for coastal protection and ACIP debt service.

Town Council Priority #3

Look for ways to offset Coastal Protection millage rate increase.

Department

Department Goals

Town Manager and Finance

  • Work with the Town Council and Department Staff to prepare a FY15 budget that is fiscally responsible and results in no millage rate increase except for coastal protection and ACIP debt service.

Town Council Priority #4

Continue to aggressively monitor the Port Expansion, with all governmental agencies, protecting against all of the long term impacts to the island.

Town Manager

  • This goal is being accomplished through the collective and


coordinate efforts of the Mayor, Town Manager, Town lobbyists, elected representatives at higher levels of government, and numerous private individuals and groups both inside and outside Palm Beach.

Town Council Priority #5

Continue to aggressively monitor FDOT’s Flagler Memorial Bridge Project and implement coordinated actions with other governmental authorities (State, County, City of West Palm Beach) to mitigate impacts of any short- term or long-term complete closure of the bridge.

Town Manager

  • Closely monitor progress of both the repair of the existing bridge and the construction of the new bridge.

  • If necessary, immediately implement traffic/safety contingency plans by direct Town action and by collaboration with FDOT, Palm Beach County, and others.

Police

  • Expand use of the Townwide Camera and Security System to mitigate construction and traffic issues impacting residents, business community, and visitors.

  • Develop and utilize Emergency Operations Plans and other pro- active measures to allocate resources to allow sufficient traffic flow during rush hour and for all emergency vehicles.

  • Attend all FDOT Flagler Bridge meetings and communicate any logistics issues/information to appropriate staff/units for action.

Fire-Rescue

  • Attend all FDOT meetings and communicate any logistic issues/information to the appropriate staff/units for action.

  • Work with FDOT on implementation of a traffic preemption system that will preempt traffic lights in advance of the approaching fire and EMS units for intersections affected by the bridge construction project.

  • Closely coordinate our response and transports to the hospital with the Police Department, utilizing police officers to clear intersections for high priority calls.

  • Utilize the Trauma Hawk helicopter to transport seriously ill patients to the hospital if delays are created by the bridge construction project.

Public Works

  • Attend periodic meetings with FDOT/contractor project teams.

  • Coordinate negative traffic impacts with other Town departments as well as affected residents/businesses, assist in developing mitigation strategies.


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Department Performance Measures


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


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Loc tion

Y

F 2015


Palm Beach is located on a barrier island east of West Palm Beach, Florida in Palm Beach County. The land area of the Town is approximately 3.77 square miles with

12.1 miles of coastline on the Atlantic Ocean. The Town is also bound on the west by 15.9 miles of Intracoastal frontage (Lake Worth), on the north by the Palm Beach Inlet, and on the south by the Town of South Palm Beach.



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DEMOGRAPHICS


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Palm Beach at a Glance

Date of Incorporation April 17, 1911

Form of Government Council/Manager

Land Area 3.77 Square Miles

FY2015 General Fund Budget $67.3 Million

Taxable Property Valuation $13.4 Billion


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Town of Palm Beach Demographics


Population

2013 (Univ of Florida Est)


8,168

Service Statistics

Police Stations


1

2012 (Univ of Florida Est)

8,358

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

66.6 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

2010/2013

Revenue Bond

Issuer’s Rating

Nature Islands 39 acres

Moody’s Aa1 Aaa

S&P AA+ AAA Registered Voters 8,361

(a) Under Review by Census Count Resolution Program

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Taxable Value and Millage Rate


The Town Council approved a millage rate of 3.4058 for FY15, an increase over the

FY14 millage rate of 3.2468.

Taxable value increased 7.53% to $13,421,075,355

for FY15. Ad Valorem revenue of $43,424,024 is included in the FY15 budget. Town adopted final millage rate is above rollback but below maximum millage

rates. below i

The increase in tax revenue from the rollback rate is $4,814,409. The chart entifies the millage rate options available to the Town and the Town’s

a

adopted final millage rate.


Millage Rate

T x Revenue

Rollback Millage Rate

3.0282

$38,609,615

Majority Vote Maximum Millage Rate

3.6578

$46,637,029

2/3 Vote Maximum Millage Rate

4.0236

$51,300,987

Town Adopted Final Millage Rate

3.4058

$ 3,424,02


4

4

The majority max mum millage rate is the prior year rolled-back rate adjusted to

the roll

d back rate if the prior year majority vote rate had been levied. This newly

calculated rolled-back rate is then adjusted by the percentage change in per capita Florida personal income to arrive at the current year majority vote rate. This year the percentage change is Florida personal income was 3.15%. The 2/3 vote maximum rate is 110% of the majority maximum rate.


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Taxable value peaked in FY09 at $13.68 billion.

Since FY09, the Town’s taxable

value had declined by 12.8% through FY13. For FY15, the taxable value increased

by 7.53%. The F

15 millage rate was increased to begin to fund the 10 year

coastal protection program.

The property tax revenue increase of $4,776,324 was

12.36% higher than in FY14. The entire increase will be transferred to the coastal protection fund. The tax revenue trend is shown on the chart on the following page.


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Y

The Town millage rate represents 18.77% of the total tax bill. The table below illustrates the difference between the FY14 vs. FY15 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



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a


o

F

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Y14

FY15

FY15 Tax

Change Per


1

2

4


0

% of Total

T xing Authority

Millage Rate Millage Rate $1 Million Value $1 million Value % Change Tax Bill


Palm Beach


3.2468


3.4058


$3,406


$159.00


4.90%


8.77%

Palm Beach County

4.9852

4.9729

$4,973

-$12.30

-0.25%

7.41%

Palm Beach County Scho l District

7.5860

7.5940

$7,594

$8.00

0.11%

1.85%

South Florida Water Mgmt

0.3523

0.3294

$329

-$22.90

-6.50%

1.82%

Children Services

0.7025

0.6745

$675

-$28.00

-3.99%

3.72%

Florida Inl nd Navigation

0.0345

0.0345

$35

$0.00

0.00%

0.19%

Health Care District

1.0800

1.0800

$1,080

$0.00

0.00%

5.95%

Everglades Construction

0.0587

0.0548

$55

-$3.90

-6.64%

0.30%

Grand Total

18.0460

18.1459

$18,146

$99.90

0.55%

1 0.00%


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


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b

a

The Town’s total millage rate is the se below.

Y

ond lowest in Palm Beach County as shown


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Property Breakdown by Number of Parcels


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The Town has a total of 9,459 total

parcels.

Residential units total 8,932 or

94% of all parcels. Condominiums and

Cooper

tives represent the greatest

percentage of total parcels in the Town at 68% or 6,408 parcels. Single family residential parcels are the second largest group at 2,292 parcels or 24% of the

total. Commercial and indu

trial parcels

total 401 and the balance is made up of multi-family, government, institutional and miscellaneous parcels. Properties with a Homestead exemption represent 31% of the total parcels in the Town.


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Property Breakdown by Taxable Value


The taxable value of parcels in the Town totals $13.3 billion. Residential parcels represent 92% of the total value of parcels and single family residential represents 64% of the total value. Commercial and industrial properties represent 7.8% of the total value of parcels. Properties with a homestead exemption represent $5.7 billion (43%) of the total taxable value.

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Historical Single Family Building Permits


Beginning in 2008, building permit revenue declined due to the downturn in the economy. For the past four years, permit revenue and permit activity increased. A total of 9,297 permits were issued in FY14, compared to 7,727 for FY10. Total

permit valuation for FY14 w

s $221,393,345 compared to $117,361,908 for FY10.


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


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We expect permit activity to continue at high levels for FY15. 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.

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Town History


According to early settler accounts, Palm Beach received its name from a shipwreck named

the “Providencia”.

The ship washed ashore in January of 1878 with a load of coconuts

bound from Havana to Barcelona. Early settlers lost no time claiming salvage and planting the coconuts which were not native to South Florida in an effort to launch tropical South Florida on a commercial coconut industry.


In 1893 millionaire industrialist Henry M. Flagler and his second wife honeymooned in St. Augustine. Impressed with the beauty and history of the area, he envisioned an “American

Riviera”.

Flagler left home at age 14 with an eighth-grade education. Later, with John D.

Rockefeller and Samuel Adams, he founded Standard Oil, and the rest is history. Having

invested large several hotels in Augustine area, extended his southward. He improved existing anticipating the potential for

His railway was Florida East Coast


Flagler’s agents buying acres of island of Palm early

found themselves as orders had buy “at any Ground was 1893, and on

1894, the Royal Hotel, the largest in the world, Palm Beach and

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sums in the St. Flagler holdings bought and railways

tremendous South Florida. named the Railway.


soon were land on the Beach. Many homesteaders very wealthy, been given to price”.

broken May 1,

February 11, Poinciana wood structure opened in welcomed 17

guests.

A month

after the

opening, the first from the station Street (later used and warehouse Palm Beach) in Beach on the bridge across

train pulled on Loftin as an office

by the Town of West Palm newly built Lake Worth to

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


Flagler continued to develop the Royal Poinciana Hotel property and built a second hotel, the Palm Beach Inn, on the beachfront portion of the Royal Poinciana’s property. When the

Palm Beach Inn burned in 1903

the first Breakers Hotel was built. Destroyed by a fire in

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


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 8,137 registered voters in 2012 with approximately 8,358 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 in August 2009 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. After more than a year of planning, dozens of events marked the Centennial year, culminating with a weekend of celebration from April 15-17, 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




Accounting, Auditing and Reporting Policies

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Budget Preparation Process


The accounting policies and reporting practices of the Town conform to generally accepted accounting principles as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of significant policies and practices.


Financial Reporting Entity


For financial reporting purposes, management has defined the reporting entity in accordance with criteria set forth in generally accepted accounting principles. The basic criterion for including a potential component unit within the reporting entity is the governing body's ability to exercise oversight responsibility. The most significant manifestation of this ability is financial interdependency. Other manifestations of the ability to exercise oversight responsibility include, but are not limited to, the selection of governing authority, the designation of management, the ability to significantly influence operations, and accountability for fiscal matters. A second criterion used in evaluating potential component units is the scope of public service. Application of this criterion involves considering whether the activity benefits the government and/or its citizens, or whether the activity is conducted within the geographic boundaries of the government and is generally available to its citizens. A third criterion used to evaluate potential component units for inclusion or exclusion from the reporting entity is the existence of special financing relationships, regardless of whether the government is able to exercise oversight responsibilities. Based upon the application of these criteria, the following is a brief review of each potential component unit addressed in defining the Town's reporting entity.


Included within the reporting entity:

The Town of Palm Beach Employees' Retirement System


The Town and the Systems’ participants are obligated to fund the costs based upon actuarial valuations. The Employee’s Retirement Board recommends and the Town Council is authorized to establish benefit levels and to approve the actuarial assumptions used in the determination of contribution levels.


Excluded from the reporting entity:

East Central Regional Wastewater Treatment Facility ("Facility")


The Town participates in an interlocal agreement with Palm Beach County and the Cities of West Palm Beach, Riviera Beach and Lake Worth to provide wastewater treatment. The facility is governed by a Board of Directors comprised of one member from each participating entity. The Board of Directors has the authority to accept and disburse funds, approve an annual budget, transact business, enter into contracts and decide all other matters related to the Facility. The Town reimburses the Facility based upon usage and also provides funds for renewal and replacement costs. The Town does not exercise significant oversight responsibility nor can the Town significantly influence the Facility's operations and, therefore, the Facility has not been included as part of the reporting entity.

Basis of Accounting


Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied.


All Governmental Funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized in the period in which they become susceptible to accrual, that is when they become measurable and available to pay liabilities of the current period.


Property taxes, utility and franchise taxes, intergovernmental revenues and charges for services are susceptible to accrual when collected in the current year or within sixty days subsequent to September 30th, provided that amounts received pertained to billings through the fiscal year just ended. Further, property taxes are recognized as revenue in the fiscal year for which they are levied. Investment earnings are recorded as earned since they are measurable and available. Permits, fines, forfeitures and contributions are not susceptible to accrual because, generally, they are not measurable until received in cash.

Revenues collected in advance of the year to which they apply are recorded as deferred revenues.


Expenditures under the modified accrual basis of accounting are generally recognized when the related fund liability is incurred and expected to be liquidated with available resources. Exceptions to this general rule include principal and interest on general long-term debt which are recognized when due.


All Proprietary Fund types and the Pension and Nonexpendable Trust Funds are accounted for using the accrual basis of accounting. Revenue is recognized when earned, and expenses are recognized when they are incurred.


The Agency Funds are custodial in nature and do not involve measurement of results of operations. They are accounted for under the modified accrual basis of accounting. Assets and liabilities are recognized on the modified accrual basis.


Budget Basis


The budgets of general government type funds are prepared on a modified accrual basis. Briefly, this means that obligations of the Town are budgeted as expenses, but revenues are recognized only when they are actually received. Unencumbered appropriations lapse at fiscal year end.


The enterprise funds, on the other hand, are budgeted on a full accrual basis. Not only are expenditures recognized when a commitment is made but revenues are also recognized when they are obligated to the town.


The Comprehensive Annual Financial Report (CAFR) shows the status of the Town’s finances on the basis of “generally accepted accounting principles” (GAAP) and fund expenditures/revenues on both a GAAP basis and budget basis for comparison purposes.

Budgets and Budgetary Requirements


The Town follows these procedures in establishing the budgetary data reflected in the financial statements:



Truth in Millage (Trim)


The budget and property tax rate adoption process is governed by the State Statute known as TRIM (truth in millage). In Florida, properties are assessed by the County Property Appraiser and property taxes are collected by the County Tax Collector. Property owners are eligible to receive a homestead exemption of $50,000 on their principal place of residence. All property is assessed at 85% of market value.


By State Law, the Town is required to hold two public hearings for adoption of a property tax rate and budget. The first public hearing is advertised by the Property Appraiser's mailing to each property owner a TRIM notice. In addition to notification of this first public hearing the TRIM notice contains the following information:



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.


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Flow Chart of Budget Process

Y

F 2015


Flow Chart of Budget Process


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FY2015 Approved Budget Calendar

Task Date Task Date


Finance to distribute FY15 Budget instructions

03/03/2014

Town Manager’s Review of Town Manager and Finance Budgets

05/29/2014

Submit initial CIP request forms to Public Works

03/17/2014

Final Budget Document Pages Returned to Finance

06/2/2014

Public Works Forwards CIP requests to Finance

04/7/2014

Property Appraiser Issues Preliminary Property Values

06/02/2014

Department’s Budget Requests are due to Finance

04/7/2014

Town Manager’s Additional Review of Department Budgets (As Needed)

June 2014

Town Council Meeting – Discussion of Long Term Financial Plan and Adoption of the FY15 Budget Priorities

04/08/2014

Notice from Property Appraiser of Preliminary Certification of Taxable Value

07/01/2014

Town Manager’s Review of Information Systems and Fire‐Rescue Budgets

04/17/2014

Distribution of Proposed FY15 Budget Document

07/10/2014


04/22/2014

Special Town Council Meeting to Consider Proposed FY15 Budget and Initial Resolutions(s) Adopting Special Non‐Ad Valorem Assessments

07/17/2014

Town Manager’s Review of Recreation Enterprise Fund Budget


Town Manager’s Review of Police Budget

04/25/2014

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

Week of August 18



05/2/2014

Town Council Meeting – First Public Hearing to Approve Tentative Budget and Proposed Tax Rate for FY15 and Final Resolution(s) Adopting Special Non‐Ad Valorem Assessments

09/9/2014

5:01PM

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


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image

47

05/16/2014

Town Council Meeting – Second Public Hearing to Adopt FY15 Budget and Tax Rate

09/17/2014

5:01PM

Town Manager’s Review of Public Works and Capital and Risk Budget

05/21/2014

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

10/01/2014

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

January 2014

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

February 2014

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

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March 2014

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 2014

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 2014

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 2014

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 2014

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

August 2014

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

September 2014

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

October 2014

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

November 2014

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

December 2014

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

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

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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:



Proprietary Funds


Two fund types are used to account for a government’s business-type activities (activities that receive a significant portion of their funding through user fees). These are the enterprise funds and the internal service funds.


Enterprise Funds

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Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises; where the intent of the government’s board is that the costs of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the government’s board has decided that periodic determination of net income is appropriate for accountability purposes.

Fiduciary Funds


These funds are used when a government holds or manages financial resources in an agent or fiduciary capacity. This single type is subdivided into four “sub-fund types” to account for various types of fiduciary obligations. These are the pension trust fund, nonexpendable trust fund, expendable trust fund, and agency funds.


Pension Trust Funds

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Pension trust funds are used when governments manage pension plans. The sources of revenues in these funds are transfers from other funds, interest earnings and employee contributions.



Non-Expendable and Expendable Trust Funds

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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

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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.


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Fund Budget Overview

FY2015


Fund Budget Overview


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FY 15 Budget Summary by Fund Type, Revenues and Expenditures


Debt

Capital

Internal

Trust &

General

Service

Projects Enterprise

Service

Agency

Totals


Revenues

Ad Valorem Taxes

$43,424,300

$0

$0

$0

$0

$0

$43,424,300

Non Ad Valorem Taxes

7,937,500

0

0

0

0

0

7,937,500

Licenses and Permits

6,835,600

0

0

0

0

0

6,835,600

Intergovernmental

1,079,750

0

850,000

0

0

0

1,929,750

Charges for Services

3,573,600

0

0

5,253,400

6,649,102

0

15,476,102

Fines and Forfeitures

1,210,000

0

0

0

0

0

1,210,000

Contributions

0

0

0

0

0

7,470,852

7,470,852

Interest Earnings

578,694

1,500

245,370

6,400

121,500

18,550,000

19,503,464

Miscellaneous

221,000

0

10,000

0

30,000

750,000

1,011,000

Special Assessments

0

775,000

222,925

0

0

0

997,925

Interfund Transfers

885,000

7,036,813

6,002,000

0

1,925,362

1,577,000

17,426,175

Subtotal

65,745,444

7,813,313

7,330,295

5,259,800

8,725,964

28,347,852

123,222,668

Appropriations from

Fund Balance

1,549,900

187,612

66,552,040

453,821

6,370,816

0

75,114,189

Total Revenues

$67,295,344

$8,000,925

$73,882,335

$5,713,621

$15,096,780

$28,347,852

$198,336,857


Expenditures

Salaries and Wages

$24,927,999

$0

$97,864

$1,330,642

$144,961

$97,518

$26,598,984

Employee Benefits

13,576,525

0

46,621

540,897

5,229,164

2,538,851

21,932,058

Contractual

8,565,388

0

244,925

1,296,000

1,631,184

17,770,700

29,508,197

Commodities

1,753,846

0

2,400

286,100

4,855

300

2,047,501

Capital Outlay

59,200

0

72,325,712

175,500

1,585,630

0

74,146,042

Depreciation

1,817,444

0

0

725,182

2,758

0

2,545,384

Debt Service

0

7,983,425

0

0

0

0

7,983,425

Interfund Transfers

15,379,362

0

959,613

1,087,200

2,498,228

0

19,924,403

Other

1,215,580

16,500

205,000

272,100

4,000,000

0

5,709,180

Subtotal

67,295,344

7,999,925

73,882,135

5,713,621

15,096,780

20,407,369

190,395,174

Transfer to Fund

Balance/Retained

Earnings

0

1,000

200

0

0

7,940,483

7,941,683

Total Expenditures

$67,295,344

$8,000,925

$73,882,335

$5,713,621

$15,096,780

$28,347,852

$198,336,857


Financial Ratios


General

Debt Service

Capital Projects


Enterprise

Internal Service

Trust & Agency


Total

Ad Valorem Taxes as

percentage of total

fund budget

64.53%

0.00%

0.00%

0.00%

0.00%

0.00%

21.89%

Ad Valorem Taxes pe

r

capita (8,168

population)

$5,316

$0

$0

$0

$0

$0

$5,316

Total expenditures

per capita (8,168

population)

$8,239

$980

$9,045

$700

$1,848

$3,471

$24,282

Personnel as a

percentage of the

total budget

37.04%

0.00%

0.13%

23.29%

0.96%

0.34%

13.41%


Capital expenditures

as percentage of total

fund budget

0.09%

0.00%

97.89%

3.07%

10.50%

0.00%

37.38%

Capital expenditures

per capita (8,168

population)

$7

$0

$8,855

$21

$194

$0

$9,078


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FY15 Budget by Revenue Type All Funds


Ad Valorem Taxes 22.0%


Appropriations from Fund Balance 38.1%

Sales and Use Taxes 4.0%

Licenses and Permits 3.5%

Intergovernmental Revenue


Interfund Transfers 8.8%


0.0%


Interest Earnings

Charges for Services

7.8%

Fines and Forfeitures

1.0%

Miscellaneous 0.5%

9.9%

Contributions 0.6%

3.8%


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FY15 Budget by Expenditure Classification All Funds



Commodities 1.0%

Contractual 14.9%


Capital Outlay 37.4%


Depreciation 1.3%

Debt Service 4.0%


Employee Benefits 11.1%

Personnel

13.4%

Interfund Transfers Other 10.0%

Transfer to Fund 2.9% Balance/Retained

Earnings 4.0%



Description

Summary of Major Revenues by Fund Type FY15 Budget

FY15 Budget

to FY2015 FY2012 FY2013 FY2014 FY2014 FY2015 FY14 Budget %

Actual Actual Budget Projected Budget % Variance of Total

General Fund

Ad Valorem Taxes

$36,662,916

$37,473,107

$38,647,700

$39,807,131

$43,424,300

12.36%

64.53%

Sales and Use Taxes

7,984,412

8,100,649

7,367,500

7,627,500

7,937,500

7.74%

11.80%

Licenses and Permits

5,880,328

6,959,778

6,588,200

7,288,300

6,835,600

3.76%

10.16%

Intergovernmental Revenue

1,051,432

986,853

1,052,000

1,059,200

1,079,750

2.64%

1.60%

Charges for Services

4,081,260

3,576,155

3,552,275

3,557,200

3,573,600

0.60%

5.31%

Fines and Forfeitures

1,106,435

1,530,787

1,181,000

1,804,000

1,210,000

2.46%

1.80%

Interest Earnings

495,311

32,425

425,373

445,500

578,694

36.04%

0.86%

Miscellaneous

683,521

573,619

247,845

145,400

221,000

-10.83%

0.33%

Interfund Transfers

800,000

885,000

885,000

885,000

885,000

0.00%

1.32%

Subtotal

58,745,615

60,118,373

59,946,893

62,619,231

65,745,444

9.67%

97.70%

Appropriations from Fund Balanc

e 0

0

5,459,600

1,869,987

1,549,900

-71.61%

2.30%

Total General Fund

$58,745,615

$60,118,373

$65,406,493

$64,489,218

$67,295,344

2.89%

100.00%

Debt Service Funds

Interest Earnings

289

243

1,000

200

1,500

50.00%

0.02%

Special Assessments

0

0

775,000

775,000

775,000

0.00%

9.69%

Miscellaneous

5,190

5,538

0

0

0

0.00%

0.00%

Interfund Transfers

5,973,538

4,407,800

6,254,863

6,580,963

7,036,813

12.50%

87.95%

Subtotal

5,979,017

4,413,581

7,030,863

7,356,163

7,813,313

11.13%

97.66%

Appropriations from Fund Balanc

e 0

0

4,200

0

187,612

4366.95%

2.34%

Total Debt Service Funds

$5,979,017

$4,413,581

$7,035,063

$7,356,163

$8,000,925

13.73%

100.00%

Capital Projects Funds

Interest Earnings

208,908

39,525

76,400

190,400

245,370

221.16%

0.33%

Grants/Interlocal/Donations

1,536,455

51,126

1,000,000

210,000

850,000

-15.00%

1.15%

Special Assessment Revenue

1,068,135

1,002,510

273,261

270,000

222,925

-18.42%

0.30%

Loan Proceeds/Contributions

0

10,000

11,960,000

58,596,000

0

-100.00%

0.00%

Miscellaneous

54,495

116,802

10,000

10,000

10,000

0.00%

0.01%

Interfund Transfers

5,001,400

5,965,099

10,283,913

10,283,913

6,002,000

-41.64%

8.12%

Subtotal

7,869,393

7,185,062

23,603,574

69,560,313

7,330,295

-68.94%

9.92%

Appropriations from Fund Balanc

e 12,622,144

6,627,967

24,030,534

0

66,552,040

176.95%

90.08%

Total Capital Projects Funds

$20,491,537

$13,813,029

$47,634,108

$69,560,313

$73,882,335

55.10%

100.00%

Enterprise Funds

Charges for Services

$4,352,717

$6,373,073

$4,981,300

$4,931,700

$5,253,400

5.46%

91.95%

Interest Earnings

28,718

1,840

3,100

12,300

6,400

106.45%

0.11%

Grants/Interlocal/Donations

0

0

0

0

0

0.00%

0.00%

Interfund Transfers

0

0

0

0

0

0.00%

0.00%

Miscellaneous

34,077

18,577

0

46,200

0

0.00%

0.00%

Subtotal

4,415,512

6,393,490

4,984,400

4,990,200

5,259,800

5.53%

92.06%

Appropriations from Retained Ern

gs 109,879

0

419,907

1,516,237

453,821

8.08%

7.94%

Total Enterprise Funds

$4,525,391

$6,393,490

$5,404,307

$6,506,437

$5,713,621

5.72%

100.00%

Internal Service Funds

Interest Earnings

$238,343

-$22,993

$68,500

$93,500

$121,500

77.37%

0.80%

Miscellaneous

$377,132

$1,345,927

$30,000

$45,000

$30,000

0.00%

0.20%

Interfund Transfers

$167,957

$0

$1,876,000

$1,876,000

$1,925,362

2.63%

12.75%

Charges for Services

8,302,203

8,656,780

6,751,500

5,840,735

6,649,102

-1.52%

44.04%

Subtotal

9,085,635

9,979,714

8,726,000

7,855,235

8,725,964

0.00%

57.80%

Appropriations from Retained Ern

gs 0

0

13,884,776

7,455,102

6,370,816

-54.12%

42.20%

Total Internal Service Funds

$9,085,635

$9,979,714

$22,610,776

$15,310,337

$15,096,780

-33.23%

100.00%

Trust & Agency Funds

Intergovernmental Revenue

$830,571

$0

$0

$0

$0

0.00%

0.00%

Interest Earnings

1,540,983

1,760,003

15,919,169

500,000

18,550,000

16.53%

65.44%

Gain/Loss on Investments

27,608,083

25,197,088

0

22,680,000

0

0.00%

0.00%

Charges for Services

2,852,137

3,160,128

0

0

0

0.00%

0.00%

Miscellaneous

75,500

585,086

930,690

0

750,000

-19.41%

2.65%

Contributions

4,726,521

4,720,918

7,171,638

8,085,890

7,470,852

4.17%

26.35%

Interfund Transfers

0

0

1,506,000

1,506,000

1,577,000

4.71%

5.56%

Subtotal

37,633,795

35,423,223

25,527,497

32,771,890

28,347,852

11.05%

100.00%

Appropriations from Fund Balanc

e 0

0

3,247

0

0

-100.00%

0.00%

Total Trust & Agency Funds

$37,633,795

$35,423,223

$25,530,744

$32,771,890

$28,347,852

11.03%

100.00%



Description

Summary of Major Revenues by Fund Type FY15 Budget

FY15 Budget

to FY2015 FY2012 FY2013 FY2014 FY2014 FY2015 FY14 Budget %

Actual Actual Budget Projected Budget % Variance of Total

All Funds

Ad Valorem Taxes

$36,662,916

$37,473,107

$38,647,700

$39,807,131

$43,424,300

12.36%

21.89%

Sales and Use Taxes

7,984,412

8,100,649

7,367,500

7,627,500

7,937,500

7.74%

4.00%

Licenses and Permits

5,880,328

6,959,778

6,588,200

7,288,300

6,835,600

3.76%

3.45%

Intergovernmental Revenue

1,882,003

986,853

1,052,000

1,059,200

1,079,750

2.64%

0.54%

Charges for Services

19,588,317

21,766,136

15,285,075

14,329,635

15,476,102

1.25%

7.80%

Fines and Forfeitures

1,106,435

1,530,787

1,181,000

1,804,000

1,210,000

2.46%

0.61%

Special Assessment Revenue

1,068,135

1,002,510

1,048,261

1,045,000

997,925

-4.80%

0.50%

Loan Proceeds/Contributions

0

10,000

11,960,000

58,596,000

0

-100.00%

0.00%

Contributions

4,726,521

4,720,918

7,171,638

8,085,890

7,470,852

4.17%

3.77%

Interest Earnings

2,512,552

1,811,043

16,493,542

1,241,900

19,503,464

18.25%

9.83%

Gain/(Loss) on Investments

27,608,083

25,197,088

0

22,680,000

0

0.00%

0.00%

Miscellaneous

1,229,915

2,645,549

1,218,535

246,600

1,011,000

-17.03%

0.51%

Interfund Transfers

11,942,895

11,257,899

20,805,776

21,131,876

17,426,175

-16.24%

8.79%

Grants/Interlocal/Donations

1,536,455

51,126

1,000,000

210,000

850,000

-15.00%

0.43%

Approp. from Fund Bal/Ret Earngs

12,732,023

6,627,967

43,802,264

10,841,326

75,114,189

71.48%

37.87%

Total All Funds

$136,460,990

$130,141,410

$173,621,491

$195,994,358

$198,336,857

14.24%

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

FY15 Budget by Revenue Type ‐ All Funds


Grants/Interlocal/Donations, 0.4%

Interfund Transfers, 8.8%

Miscellaneous, 0.5% Gain/(Loss) on Investments,

0.0%


Approp. from Fund Bal/Ret Earngs, 37.9%

Interest Earnings, 9.8%


Contributions, 3.8% Loan Proceeds/Contributions,

0.0%


Ad Valorem Taxes, 21.9%


Special Assessment Revenue, 0.5%

Fines and Forfeitures, 0.6%


Intergovernmental Revenue, 0.5%


Sales and Use Taxes, 4.0%


Charges for Services, 7.8%


Licenses and Permits, 3.4%



Description

Summary of Expenditure Classifications by Fund Type FY15 Budget

FY15 Budget

to FY2015 FY2012 FY2013 FY2014 FY2014 FY2015 FY14 Budget of

Actual Actual Budget Projected Budget % Variance % of Total


General Fund

Salaries and Wages

$23,627,368

$22,943,977

$24,298,881

$23,583,548

$24,927,999

2.59%

37.04%

Employee Benefits

$11,512,417

$11,105,892

$13,082,570

$13,252,412

$13,576,525

3.78%

20.17%

Contractual

8,807,800

7,227,726

8,472,843

8,994,456

8,565,388

1.09%

12.73%

Commodities

1,560,677

1,574,948

1,701,960

1,674,178

1,753,846

3.05%

2.61%

Capital Outlay

1,881,319

62,775

132,645

127,928

59,200

-55.37%

0.09%

Interfund Transfers

8,570,619

12,926,879

14,682,000

14,682,000

15,379,362

4.75%

22.85%

Other

284,901

2,259,958

1,157,659

2,174,696

3,033,024

162.00%

4.51%

Subtotal

56,245,101

58,102,155

63,528,558

64,489,218

67,295,344

5.93%

100.00%

Transfer to Fund Balanc

e

2,500,514

2,016,218

1,877,935

0

0

-100.00%

0.00%

Total General Fund

$58,745,615

$60,118,373

$65,406,493

$64,489,218

$67,295,344

2.89%

100.00%


Debt Service Funds

Debt Service

$5,940,135

$4,397,494

$6,993,700

$4,393,669

$7,983,425

14.15%

99.78%

Other

4,550

3,800

11,500

16,500

16,500

43.48%

0.21%

Interfund Transfers

0

0

0

0

0

0.00%

0.00%

Subtotal

5,944,685

4,401,294

7,005,200

4,410,169

7,999,925

14.20%

99.99%

Transfer to Fund Balanc

e

34,332

12,287

29,863

2,945,994

1,000

-96.65%

0.01%

Total Debt Service Funds

$5,979,017

$4,413,581

$7,035,063

$7,356,163

$8,000,925

13.73%

100.00%


Capital Projects Funds

Capital Outlay

$18,100,837

$12,833,229

$33,743,290

$19,806,913

$72,589,935

115.12%

98.25%

Interfund Transfers

2,390,700

979,800

253,563

520,100

1,087,200

328.77%

1.47%

Other

0

0

205,000

0

205,000

0.00%

0.28%

Subtotal

20,491,537

13,813,029

34,201,853

20,327,013

73,882,135

116.02%

100.00%

Transfer to Fund Balanc

e

0

0

13,432,255

49,233,300

200

-100.00%

0.00%

Total Capital Projects Funds

$20,491,537

$13,813,029

$47,634,108

$69,560,313

$73,882,335

55.10%

100.00%


Enterprise Funds

Salaries and Wages

$1,245,692

$1,223,502

$1,297,374

$1,277,290

$1,330,642

2.56%

23.29%

Employee Benefits

$424,518

$471,991

$542,313

$542,797

$540,897

-0.26%

9.47%

Contractual

1,192,040

1,084,435

1,379,400

1,231,451

1,296,000

-6.05%

22.68%

Commodities

215,396

222,596

246,900

246,085

286,100

15.88%

5.01%

Capital Outlay

523,507

770,526

678,100

2,166,514

175,500

-74.12%

3.07%

Debt Service

126,000

128,000

126,000

157,300

128,000

1.59%

2.24%

Interfund Transfers

798,238

885,000

885,000

885,000

1,684,382

90.33%

29.48%

Other

0

1,500

249,220

0

272,100

9.18%

4.76%

Subtotal

4,525,391

4,787,550

5,404,307

6,506,437

5,713,621

5.72%

100.00%

Transfer to Retained Earnings

0

1,605,940

0

0

0

0.00%

0.00%

Total Enterprise Funds

$4,525,391

$6,393,490

$5,404,307

$6,506,437

$5,713,621

5.72%

100.00%


Internal Service Funds

Salaries and Wages

$128,995

$139,508

$140,824

$140,824

$144,961

2.94%

0.96%

Employee Benefits

4,858,572

4,553,244

5,099,727

4,985,005

5,229,164

2.54%

34.64%

Contractual

-487,448

1,557,632

1,626,943

1,194,140

1,631,184

0.26%

10.80%

Commodities

55,998

3,916

4,855

4,855

4,855

0.00%

0.03%

Capital Outlay

1,566,887

1,646,442

3,012,495

2,601,600

1,585,630

-47.36%

10.50%

Interfund Transfers

0

0

8,725,932

6,358,913

2,498,228

-71.37%

16.55%

Other

504,276

17,881

4,000,000

25,000

4,002,758

0.07%

26.51%

Subtotal

6,627,280

7,918,623

22,610,776

15,310,337

15,096,780

-33.23%

100.00%

Transfer to Retained Earnings

2,458,355

2,061,091

0

0

0

0.00%

0.00%

Total Internal Sevice Funds

$9,085,635

$9,979,714

$22,610,776

$15,310,337

$15,096,780

-33.23%

100.00%


Trust & Agency Funds

Contractual

$18,142,840

$20,376,452

$20,889,544

$19,330,053

$20,407,369

-2.31%

71.99%

Transfer to Fund Balanc

e

19,490,955

15,046,771

4,641,200

13,441,837

7,940,483

71.09%

28.01%

Total Trust & Agency Fu

nds

$37,633,795

$35,423,223

$25,530,744

$32,771,890

$28,347,852

11.03%

100.00%


Summary of Expenditure Classifications by Fund Type FY15 Budget

FY15 Budget

to FY2015 FY2012 FY2013 FY2014 FY2014 FY2015 FY14 Budget of

Description Actual Actual Budget Projected Budget % Variance % of Total


Total: All Funds

Salaries and Wages

$25,002,055

$24,306,987

$25,737,079

$25,001,662

$26,403,602

2.59%

13.31%

Employee Benefits

$16,795,507

$16,131,127

$18,724,610

$18,780,214

$19,346,586

3.32%

9.75%

Contractual

27,655,232

30,246,245

32,368,730

30,750,100

31,899,941

-1.45%

16.08%

Commodities

1,832,071

1,801,460

1,953,715

1,925,118

2,044,801

4.66%

1.03%

Capital Outlay

22,072,550

15,312,972

37,566,530

24,702,955

74,410,265

98.08%

37.52%

Debt Service

6,066,135

4,525,494

7,119,700

4,550,969

8,111,425

13.93%

4.09%

Interfund Transfers

11,759,557

14,791,679

24,546,495

22,446,013

20,649,172

-15.88%

10.41%

Transfer to Fund Bal/Ret Earnings

24,484,156

20,742,307

19,981,253

65,621,131

7,941,683

-60.25%

4.00%

Other

793,727

2,283,139

5,623,379

2,216,196

7,529,382

33.89%

3.80%

Subtotal All Funds

$136,460,990

$130,141,410

$173,621,491

$195,994,358

$198,336,857

14.24%

100.00%


image

FY15 Budget by Expenditure Classification All Funds



Interfund Transfers 10.4%

Transfer to Fund Bal/Ret Earnings 4.0%


Other 3.8%


Salaries and Wages 13.3%


Employee Benefits

Debt Service

4.1%


Capital Outlay 37.5%


Contractual 16.1%

9.8%


Commodities 1.0%


Official-colored-seal.jpg


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e

image

Res rve Status

Y

F 2015


Town of Palm Beach

Reserves


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


Unassigned Fund Balance - General Fund


image

Pursuant to adopted policy, the unassigned fund balance for the General Fund is to be maintained at a minimum level of 25% of current year General Fund budgeted expenditures. This minimum level is to be maintained to protect the Town against economic downturns, temporary revenue shortfalls, unpredicted one-time expenditures, and for tax rate stabilization purposes. Twenty-five

percent of the FY15 General Fund operating budget (General Fund budget less coastal transfer) is $15,629,586. The FY13 ending fund balance was $20,043,760.


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

For the FY15 budget, a transfer of $909,000 from fund balance was used to fund the contingency reserve as directed by policy.


Reser

es - Risk Fund


image

The total reserve balance for the Risk Fund was $8,625,018 as of September 30, 2013. 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. Included in the FY14 budget is a Town Council authorized transfer of

$2,000,000 of the excess Risk Fund

reserves to the Coastal Protection Fund. This amount has been deducted from the

reserve balance.

The trend for the Risk Fund Reserve is shown in the table.


image

Reserve Status

Y

F 2015


Reser

e 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 from a man-made or natural emergen

inancial impacts of response to and recovery y 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.


Recre

tion Enterprise Fund Reserves


The Recreation Enterprise Fund reserve is to be maintained at a minimum level of 25% of budgeted revenues totaling $1,246,100 for FY14. The purpose of the reserve is to provide an adequate level of net assets for unanticipated financial impacts as well as to provide for one-time expenditures to improve the facilities.


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


At the end of FY1

image

, the net asset

balance for the Recreation Enterprise Fund (REF) was $3,753,556.

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


At the end of FY1

, $2,551,321 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 m

st be replaced. The replacement reserve is to be maintained at 100% of

accumulated depreciation plus accumulated interest earned on the reserve.


The Par 3 Golf Course charges an additional $2 per round to fund a maintenance

and improvement reserve.

At the end of FY13, the balance is $212,375.


In FY10, a maintenance and improvement fee was implemented for the Tennis program. This reserve at the end of FY13 is $31,075 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 FY13 is $472,319.


e

image

Res rve Status

Y

F 2015


Equipment Replacement Fund


image

The Townwide 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 FY13 is $15,483,961. The Town Council authorized the use of a portion of this reserve ($4,867,019) as seed money for an internal loan fund for assessment projects that will be repaid by

the assessments.

To date, a total of $2,303,282 has been used for this purpose.


An analysis of the reserves in FY 13, determined an excess balance of $2,858,913 caused by the accumulated interest earned by the fund and identification of equipment that will not be replaced. The Town Council authorized a transfer of this excess amount to the coastal protection fund in FY14. The transfer has been deducted from the total and the reduced reserve is shown in the chart. For FY15, income including the depreciation transfer will total $1,820,202 and expenditures for capital equipment are budgeted at $1,585,630.


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

nd compensatory time and the related

payroll tax liability. The balance in the reserve as of September 30, 2013, was

$3,390,226. The FY15, appropriation for the pay-out of eligible accrued vacation, sick and compensatory time from this reserve is $640,900.


image

Reserve Status

Y

F 2015


image

Health Insurance Reserve


The balance of the reserve in the Health Fund at the end FY13 is $4,025,042.

These

eserves 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.


OPEB (Other Post Employment Benefits) Trust


image

The Town’s OPEB Trust Fund was established to comply with GASB Statements 43 and 54, which required

the establishme

t of a liability for

actuarially determined costs of retiree

health benefits.

This fund is overseen

by the Town’s Investment Advisory Committee. The net asset balance in this trust is $24,814,790 as of September 30, 2013. The actuarially determined transfer from the General

Fund for the OPEB liability for FY15 is $1,577,000. 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

ere separately managed by 3

pension boards

ntil 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 fund at the end of FY12

were $187,286,530. The balance at the end of FY13 is $198,460,764.


image

Reserve Status FY2015


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 use of the contingency reserves for fiscal years 2011 through 2015.


Contingency Reserves FY2011 through FY2015


image

Contingency 2011 2012 2013 2014 2015

General Fund Budget 929,468 807,397 843,000 860,000 909,000

General Fund Actual 421,302 806,988 556,668 293,800 ‐0‐

CIP Budget 186,000 181,000 201,000 205,000 205,000

CIP Actual 45,000 94,000 ‐0‐ ‐0‐ ‐0‐

ERF Budget 500,000 500,000 500,000 500,000 500,000

ERF Actual 51,311 ‐0‐ 156,528 136,869 ‐0‐

Risk Budget 500,000 500,000 500,000 500,000 500,000

Risk Actual ‐0‐ 50,000 ‐0‐ ‐0‐ ‐0‐

Health Budget 500,000 500,000 500,000 500,000 500,000

Health Actual 85,000 ‐0‐ ‐0‐ ‐0‐ ‐0‐

Recreation Budget 176,700 155,000 235,600 249,220 272,100

Recreation Actual ‐0‐ 137,000 35,000 ‐0‐ ‐0‐


image

Reserve Status FY2015


Unassigned Net Position


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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 on the following page summarize the trend of the unassigned net position, net asset balances, compensated absence, and replacement reserve balances for FY09 through FY13.


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Res

e

rve Status

Y

F 2015


Reserve Balances

Fiscal Years 2009 –

2

2014 Est.


p

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Fund

9

200

010

2011

2012

2013

2014 Est.


General Fund

20,980,277

18,394,714

18,155,941

21,424,261

20,043,760

20,000,000

Com ensated

Absence (GF)

3,333,242

3,065,810

3,621,915

3,315,135

3,390,226

3,400,000

Equipment Replacement Fund


10,840,088


11,667,524


13,672,222


14,870,188


12,625,048


12,100,000

Recreation Enterprise Fund

1,050,115

294,764

413,966

707,381

486,466

600,000

Recreation ERF

351,468

426,749

458,002

397,132

472,319

500,000

Dock Replacement

196,718

2,084,181

2,240,125

2,395,723

2,551,321

2,700,000

Par 3 M&I Reserve

0

50,872

108,722

162,138

212,375

275,000

Tennis M&I Reserve

0

8,446

16,418

23,867

31,075

39,000

Health Fund

1,845,717

2,565,197

2,683,896

3,234,334

4,025,042

4,135,763

Risk Fund

7,620,642

6,669,596

6,863,675

7,990,553

6,625,018

7,230,872

Health - OPEB Trust

15,898,539

17,524,179

18,173,086

20,942,253

24,814,790

25,646,315

Pension Fund

163,129,393

174,544,804

170,564,741

187,286,530

198,460,764

210,995,263

Total

225,246,199

237,296,836

236,972,759

262,749,495

273,738,204

287,622,213


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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:



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.

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FY2015 Town‐wide Capital Expenditures



Department/


Equipment Replacement


Recreation

Description

General Fund

Fund

Capital Funds

Fund

Total

Information Systems

$265,558

$250,380

$0

$0

$515,938

Annual Depreciation

250,558

0

0

0

250,558

Major Computer Equip (>$1,500)

15,000

250,380

0

0

265,380

Human Resources

677

0

0

0

677

Annual Depreciation

677

0

0

0

677

Finance

3,363

3,677

0

0

7,040

Annual Depreciation

3,363

0

0

0

3,363

Folder/Sealer Machine

0

3,677

0

0

3,677

Planning/Zoning/Building

33,921

31,971

0

0

65,892

Annual Depreciation

33,921

0

0

0

33,921

Digital Microfiche/Scanner/Comp

0

15,000

0

0

15,000

Vehicle

0

16,971

0

0

16,971

Fire‐Rescue

575,992

304,100

0

0

880,092

Annual Depreciation

540,992

0

0

0

540,992

All Terrain Vehicle

0

7,100

0

0

7,100

Protective Gear

0

170,000

0

0

170,000

Protective Gear Washer/Extractor

0

4,500

0

0

4,500

(4) Styker Stretchers

0

51,000

0

0

51,000

Grant Reimbursable Equipment

35,000

0

0

0

35,000

Vehicle Exhaust Removal System

0

71,500

0

0

71,500

Police

422,559

362,200

0

0

784,759

Annual Depreciation

416,859

0

0

0

416,859

(3) Pursuit Vehicles/Equipment

0

125,500

0

0

125,500

(2) Transmitter/Receivers

0

9,400

0

0

9,400

Furniture System

0

55,000

0

0

55,000

Surveillance Security Cameras/Accessories

0

75,000

0

0

75,000

Audio Synthesizer

0

6,000

0

0

6,000

Vehicle Message Sign Trailer

0

25,000

0

0

25,000

(3) Administrative Vehicles

0

66,300

0

0

66,300

Crime Scene Office Furniture & Equipment

5,700

0

0

0

5,700

Public Works

577,332

633,302

73,657,335

0

74,867,969

Annual Depreciation

573,832

0

0

0

573,832

(2) Ford F150 Trucks

0

35,000

0

0

35,000

Transfer Trailer

0

125,000

0

0

125,000

Int’l Road Tractor

0

131,000

0

0

131,000

Int’l Truck with Body

0

82,802

0

0

82,802

Int’l Truck RS Crane

0

170,000

0

0

170,000

Ford F250 Utility Body

0

28,500

0

0

28,500

Ford F250 Truck

0

20,000

0

0

20,000

(2) Ford Escape SUVs

0

41,000

0

0

41,000

Traffic Controller Equipment

3,500

0

0

0

3,500

Pay‐as‐you‐go Projects

0

0

6,726,133

0

6,726,133

Coastal Projects

0

0

27,676,498

0

27,676,498

Worth Avenue Assessment District

0

0

233,125

0

233,125

2010A Accelerated Projects

0

0

7,015,362

0

7,015,362

2013 Accelerated Projects

0

0

32,006,217

0

32,006,217

Recreation Department

0

0

0

801,182

801,182

Annual Depreciation

0

0

0

725,182

725,182

Golf Course Equipment

0

0

0

76,000

76,000

Total Capital Expenditures

$1,879,402

$1,585,630

$73,657,335

$801,182

$77,923,549


m

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General Fund Revenue Expenditure Co

parison

Y

F 2015


General Fund Revenues and Expenditures Budget Comparison


T


g s


e


m


F

t

image

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Fiscal Years 2014-2015


Budget

FY2014

Budget

FY2015

FY14 vs. FY15

$ Difference

FY14 vs. FY15

% Change


Revenues


$38,647,700


$43,424,300


$4,776,600


12.4%

Ad Valorem Taxes

Non Ad Valorem axes

7,367,500

7,937,500

$570,000

7.7%

Licenses & Permits

6,588,200

6,835,600

$247,400

3.8%

Intergovernmental

1,052,000

1,079,750

$27,750

2.6%

Charges for Services

3,552,275

3,573,600

$21,325

0.6%

Fines and Forfeitures

1,181,000

1,210,000

$29,000

2.5%

Investment Earnin s

425,373

578,694

$153,321

36.0%

Miscellaneous Revenues

247,845

221,000

-$26,845

-10.8%

Interfund Transfer

885,000

885,000

$0

0.0%

Transfer from CIP

0

0

$0

100.0%

Transfer From Fund Balance

5,459,600

1,549,900

-$3,909,700

-71.6%

Total Revenues

$65,406,493

$67,295,344

$1,888,851

2.9%

Expenditures


$95,600


$95,600


$0


0.0%

Department

Legislative

General Governm nt

788,300