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TOWN OF PALM BEACH, FLORIDA


COMPREHENSIVE ANNUAL BUDGET FISCAL YEAR 2014

(October 1, 2013 - September 30, 2014)


Mayor and Town Council


Gail L. Coniglio, Mayor

David A. Rosow, Town Council President Robert N. Wildrick, Town Council President Pro-Tem

William J. Diamond, Town Council Member Richard M. Kleid, Town Council Member Michael J. Pucillo, 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 A. Coniglio

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TOWN COUNCIL



PRESIDENT

David A. Rosow

PRESIDENT PRO-TEM

Robert N. Wildrick

William J. Diamond Richard M. Kleid Michael J. Pucillo


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APPOINTS



TOWN ATTORNEY

John C. Randolph


TOWN MANAGER

Peter B. Elwell


ADVISORY BOARD AND COMMISSIONS



FINANCE DIRECTOR

Jane Struder


HUMAN RESOURCES DIRECTOR

Danielle Olson

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RECREATION AND SPECIAL PROJECTS DIRECTOR

Jay Boodheshwar

SUPERVISES


PLANNING, ZONING AND BUILDING DIRECTOR

John Page


PUBLIC WORKS DIRECTOR

H. Paul Brazil

DIRECTOR OF PUBLIC SAFETY

Kirk W. Blouin


DEPUTY TOWN MANAGER

Thomas G. Bradford


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, 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. A Budget in Brief is also available from the Finance Department on the Town’s web site, www.townofpalmbeach.com or by mail at, 360 South County Road, Palm Beach, Florida 33480.


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

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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, 2012.


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 16

Introductory Information

Map 23

Town Overview/Demographics 24

Assessed Valuation and Millage Rate 25

Town History 29

Financial Policies 31

Budget Preparation Process 36

Budget Calendar 44

Financial Structure 42

Budget Summary

Fund Budget Overview 47

Budget Summary by Fund Type, Revenues and Expenditures 48

Summary of Major Revenues by Fund Type 50

Summary of Expenditure Classifications by Fund Type 52

Reserve Analysis 55

Capital Expenditures 61

General Fund

General Fund Revenues and Expenditures Budget Comparison 63

Revenues

General Fund Revenues 65

Major Revenue Sources 69

Expenditures

General Fund Expenditures 79

Legislative

Legislative (111) 83

General Government

General Government (113) 85

Town Manager

Town Manager’s Office Organization Chart 88

Administrative Management (121) 90

Advice and Litigation

Advice and Litigation (122) 91

Information Systems

Information Systems (125) 93

Human Resources

Human Resources Organization Chart 98

Human Resources (123) 101

Finance

Finance Organization Chart 108

Finance Department Revenue and Expenditure Summary 110

Records Management (131) 111

Financial Management (141) 113

Purchasing (144) 116

Planning, Zoning and Building

Planning, Zoning and Building Organization Chart 120

Planning, Zoning and Building Department Revenue and Expenditure Summary 122

Planning and Zoning (211) 124

Permit Issuance (212) 126

Inspection and Compliance (213) 129

Landmarks Preservation (214) 131

Fire Prevention (215) 133

Code Enforcement (216) 135

Fire-Rescue

Fire-Rescue Department Organization Chart 138

Fire-Rescue Department Revenue and Expenditure Summary 141

Fire Administration (411) 143

Operations (417) 145

Training (418) 150

Ocean Rescue (419) 152

Police

Police Department Organization Chart 156

Police Department Revenue and Expenditure Summary 159

Administrative Management (421) 161

Organized Crime Vice and Narcotics – OCVAN (422) 164

Records Information System Unit (423) 166

Training and Community Relations Unit – TCR (424) 167

Communications Unit (425) 170

Crime Scene/Evidence Unit (426) 172

Patrol (428) 174

Criminal Investigation Unit (429) 178

Parking Control Unit (430) 180

Public Works

Public Works Department Organization Chart 184

Public Works Department Revenue and Expenditure Summary 189

Administrative Management (511) 191

Street Repair and Maintenance (521) 192

Traffic Control (523) 194

Street Lighting (524) 196

Storm Sewer Maintenance (531) 198

Sanitary Sewer Maintenance (532) 201

Sanitary Sewage Treatment (533) 204

Residential Collection (541) 205

Commercial Collection (542) 207

Refuse Disposal (543) 209

Yard Trash Collection (544) 210

Recycling (545) 212

Beach Cleaning (546) 214

Landscape Maintenance (551) 215

Facility Maintenance (554) 217

Meter Maintenance and Collection (558) 219

General Engineering Services (561) 220

Right of Way Inspections (565) 223

Equipment Operation and Maintenance (571) 224

Coastal Management (581) 226

Other

Library Services (321) 230

Transfers to Other Funds (611 to 625) 231

Emergency Management (710) 232

Contingent Appropriations (711) 233

Debt Service

Debt Administration 235

2010A CIP Revenue Bond (Fund 205) 240

2010B Worth Avenue Revenue Bond (Fund 206) 241

Capital Funds

Capital Funds 243

Capital Improvement Fund (Fund 307)

Five Year Capital Improvement Pay-as-you-go/Facilities Program 245

Pay-as-you-go Capital Improvement Fund 246

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

CCMP FY12 Accomplishments and FY13 Action Plan 247

Comprehensive Coastal Management Project Fund 259

Shore Protection Board FY13 Proposed Coastal Management Program Budget 260

Town Facilities Project Fund (Fund 310)

Town Facilities Fund 261

Worth Avenue Assessment District (Fund 311)

Worth Avenue Maintenance 263

Accelerated Capital Fund (Fund 312)

2010A Accelerated Capital Projects Fund 265

Accelerated Capital Improvement Program Budget Report 266

Project Fact Sheets

Worth Avenue Construction Fund (Fund 313)

2010B Worth Avenue Project Fund 301

Recreation Enterprise Fund (Fund 403)

Recreation Enterprise Fund Organization Chart 304

Recreation Enterprise Fund Revenue and Expenditure Summary 306

Marina 307

Golf Course 311

Tennis 316

Recreation Center 321

Administration 324

Capital Program 325

Depreciation Program 326

Equipment Replacement 327

Internal Service Funds

Self Insurance – Risk

Self Insurance Fund – Risk Management (Fund 501) 329

Self Insurance – Health

Self Insurance Fund – Health Benefit (Fund 502) 333

Equipment Replacement Fund

Equipment Replacement Fund (Fund 320) 335

Trust and Agency Funds

Retirement Fund 339

Employees Retirement System (Fund 600)

Employees Retirement Fund 347

Health Insurance Trust (Fund 610)

Health Insurance Trust 349

Retiree Sliding Scale Insurance Premium Rates 2014 353

Appendix

Authorized Positions 357

Donation Reserve Account Summary 362

Financial Policies

Fund Balance 363

Contingency Reserve – General Fund 369

Designation of General Fund Balance - Liability Related to Compensated Absences Leave Balances 370

Reserve for Encumbrances, Continuing Appropriations, and Prepaid Expenses 371

Contingency Reserve – Capital Fund 372

Equipment Replacement Reserve 373

Contingency Reserve – Equipment Replacement Fund 374

Recreation Enterprise Fund Reserve 375

Dock Replacement Reserve – Recreation Enterprise Fund 376

Contingency Reserve – Recreation Enterprise Fund 377

Contingency Reserve – Recreation Enterprise Fund – Capital Fund 378

Equipment Replacement Reserve – Recreation Enterprise Fund 379

Reserve for Catastrophic Exposures/Emergencies – Risk Fund 380

Contingency Reserve – Risk Fund 381

Contingency Reserve – Health Insurance Fund 382

Budgetary Control 383

Debt Management Policy 384

Revenue Shortfall Plan 385

Glossary

Glossary 387

Index

Index… 397


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October 10, 2013


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 fiscal year beginning October 1, 2013, and ending September 30, 2014, 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 extensive public participation and 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 18, 2013.


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.


In preparing this budget, staff started with the long term financial plan forecast for FY14 as a baseline and then identified hundreds of thousands of dollars of additional savings while maintaining all current levels of service and addressing short term coastal funding needs. During the review of the proposed budget, Town Council decided to proceed with Phase 2 of the Accelerated Capital Improvement Program (requiring the issuance of bonds and first year debt service of $2.6 million, but reducing the long term cost to Town taxpayers) and to add an annual discretionary contribution to employees’ 401(a) retirement accounts. Together these two items added approximately $3.2 million to the FY14 budget. Overall, the budget reflects an increase of 9.5% over FY13.


Information regarding the Townwide Vision, Goals and Performance Measures can be found in the section immediately following the budget message.


Maintaining Fiscal Sustainability


Since FY08, the Town’s elected officials and staff have worked diligently to reduce costs and improve efficiencies wherever possible. The FY14 General Fund budget is well below ($1,929,107) the FY09 peak even after a large transfer to coastal protection and the additional debt service for the second phase of the Accelerated Capital Improvement Program. In an “apples to apples” comparison of the operating budget, excluding coastal transfers, expenditures for FY14 are 6.32% less than in the FY09 budget.

The chart below shows the total budget and property tax history for FY07 - FY14.


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The tables below and on the following page compare the FY09 Budget to the FY14 Budget.



Revenue


FY2009


FY2014

FY09 vs. FY14

Difference

%

Change

Ad Valorem Taxes

$42,543,000

$38,647,700

($3,895,300)

-9.16%

Non Ad Valorem Taxes

7,043,000

7,367,500

324,500

4.61%

Licenses & Permits

5,612,900

6,588,200

975,300

17.38%

Intergovernmental

1,261,400

1,052,000

(209,400)

-16.60%

Charges for Services

3,158,400

3,552,275

393,875

12.47%

Fines and Forfeitures

1,521,200

1,181,000

(340,200)

-22.36%

Investment Earnings

1,201,300

425,373

(775,927)

-64.59%

Miscellaneous

309,300

247,845

(61,455)

-19.87%

Interfund Transfers

550,000

885,000

335,000

60.91%

Transfers From Reserves – Contingency/Compensated Absences

2,135,100

1,459,600

(675,500)

-31.64%

Total Revenue Budget

65,335,600

61,406,493

(3,929,107)

-6.01%

Fund Balance Transfer – Coastal Protection

2,000,000

4,000,000

2,000,000

100.0%

Total Revenues

$67,335,600

$65,406,493

($1,929,107)

-2.86%



Expenditure Category


FY2009


FY2014

FY09 vs. FY14

Difference

%

Change

Salary and Wages

$28,624,800

$24,298,881

($4,325,919)

-15.11%

Pension Benefits

6,649,700

6,173,015

(476,685)

-7.17%

Other Employee Benefits

9,166,730

8,415,555

(751,175)

-8.19%

Contractual

7,588,890

8,472,843

883,953

11,65%

Commodities

1,698,390

1,701,960

3,570

0.21%

Capital Outlay

2,804,666

2,010,580

(794,086)

-28.31%

Other

8,802,424

10,133,659

1,331,235

15.12%

Total Operating Expenditures

$65,335,600

$61,206,493

($4,129,107)

-6.32%

Coastal Transfer

2,000,000

4,200,000

2,200,000

110.00%

Total General Fund Budget

$67,335,600

$65,406,493

($1,929,107)

-2.86%


The large reduction of operating expenses and small increase of non ad valorem revenues 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. The current forecast shows deficits beginning in FY15, but they are small and manageable. We will be able to reduce future budgets in order to eliminate the projected deficits.


The three tables below and on the next page represent:

  1. The “original” LTFP forecast presented in April 2009

  2. The LTFP forecast from April 2013

  3. The forecast updated with the FY14 budget


LTFP Forecast as of April 2009

FY14

FY15

FY16

FY17

FY18

FY19

FY20

Revenues

71,388,922

73,565,312

75,625,541

77,746,505

79,930,774

82,179,515

84,495,429

Expenditures

77,238,099

81,876,195

86,140,002

90,562,822

95,221,633

100,114,031

104,748,413

Surplus/(Deficit)

(5,849,177)

(8,310,883)

(10,514,460)

(12,816,317)

(15,290,859)

(17,934,516)

(20,252,980)


LTFP Forecast as of April 2013

FY14

FY15

FY16

FY17

FY18

FY19

FY20

Revenues

61,189,945

62,799,558

64,547,059

66,497,729

68,137,014

69,935,026

71,765,404

Expenditures

58,932,172

60,963,433

62,479,278

64,436,551

67,399,311

70,589,837

72,896,927

Surplus/(Deficit)

2,257,773

1,836,125

2,067,782

2,061,178

737,703

(654,810)

(1,131,522)


FY14 Budget

FY14

FY15

FY16

FY17

FY18

FY19

FY20

Revenues

65,406,493

67,608,271

69,655,287

71,850,971

73,653,150

75,636,418

77,640,360

Expenditures

65,406,493

68,083,367

69,782,065

71,903,679

73,970,263

76,232,173

78,665,882

Surplus/(Deficit)

0

(475,096)

(126,778)

(52,709)

(317,113)

(595,754)

(1,025,523)


GENERAL FUND


FY2014 Budget Highlights


The FY14 General Fund budget is summarized on the next several pages. For details regarding the specific budget for each individual department, please see the pages following the applicable tab later in this budget binder.


Revenues


In the General Fund, total revenues are expected to increase by $5,695,213 (9.54%) from the adopted FY13 budget. The increase is due to a $4,000,000 transfer from “excess” fund balance to the Coastal Protection Fund and an increase in property taxes of

$1,782,300. The changes by revenue type are shown on the table below.



Revenue


FY2013


FY2014

FY13 vs. FY14

Difference

%

Change

Ad Valorem Taxes

$36,865,400

$38,647,700

$1,782,300

4.83%

Non Ad Valorem Taxes

7,477,500

7,367,500

(110,000)

-1.47%

Licenses & Permits

6,202,300

6,588,200

385,900

6.22%

Intergovernmental

1,020,450

1,052,000

31,550

3.09%

Charges for Services

3,652,116

3,552,275

(99,841)

-2.73%

Fines and Forfeitures

1,299,000

1,181,000

(118,000)

-9.08%

Investment Earnings

900,500

425,373

(475,127)

-52.76%

Miscellaneous

251,981

247,845

(4,136)

-1.64%

Interfund Transfers

885,000

885,000

0

0.00%

Transfers For Contingency and Compensated Absences

1,157,033

1,459,600

302,567

26.15%

Total Revenue Budget

59,711,280

61,406,493

1,695,213

2.84%

Transfer from “Excess” Fund Balance For Coastal Protection

4,000,000

4,000,000

100.0%

Total Revenues and Fund Balance Transfer

$59,711,280

$65,406,493

$5,695,213

9.54%



Ad Valorem Revenue

The LTFP called for property taxes to increase by 3% from FY13 to FY14. To provide additional funding for debt service, property taxes were actually increased by 4.83%. A millage rate of 3.2468 was approved for FY14. This rate is slightly less (.13%) than the FY13 millage rate of 3.2512, because property values in Palm Beach increased by 5.16% for FY14.


Non Ad Valorem Revenue

Total non ad valorem revenues (excluding transfers of fund balance) are anticipated to decrease by $389,654 from the FY13 revenue budget. The differences by revenue type are described in detail, as follows:



Fund Balance


As of September 30, 2012, the Town’s unassigned General Fund balance was

$21,424,261. The Town Council authorized a transfer of $2,000,000 from the unassigned General Fund balance to the Coastal Protection Fund during FY13, leaving a

balance of $19,424,261. Town policy requires that the General Fund maintain an unassigned fund balance of 25% of budgeted operating expenditures. This requires a minimum unassigned fund balance of $15,301,623 for the FY14 budget. The budget includes a transfer of $4,860,000 from fund balance reserves to fund the following items: coastal protection ($4,000,000) and contingency reserve ($860,000). This will re-set the unassigned fund balance to almost exactly the 25% minimum set forth in the Town’s financial policies. The budget also includes a $599,600 transfer from the compensated absence reserve of the General Fund balance to provide the required funding for compensated absence payouts.


Personnel Complement


The total personnel complement (for all funds Townwide) for FY14 is 348.44 full-time equivalent personnel (FTEP), which is a decrease of 5.0 FTEP from the adopted FY13 budget. This includes elimination of the following positions: 3 firefighters, a medical billing specialist, and a crime prevention specialist. As with all prior reductions in Town staffing, the elimination of these positions will be implemented without laying off any existing Town employees.


In total, since peaking in FY07, Town staffing has decreased by 66.79 FTEP (16%) with no material reduction in the level or quality of service provided to Palm Beach residents. The Town now has fewer employees than in 1986. A chart of the FTEP by department is shown below.


Department/Fund

FY10

FY11

FY12

FY13

FY14

Town Manager

6.00

5.00

5.10

5.10

5.10

Information Systems

6.00

6.00

6.00

6.00

6.00

Human Resources

4.95

4.57

4.52

4.38

4.38

Finance

17.45

17.45

17.95

18.14

18.14

Planning, Building & Zoning

28.75

27.25

26.75

26.25

26.25

Fire-Rescue

90.20

86.40

82.90

79.90

75.90

Police

115.05

102.85

103.85

104.35

103.35

Public Works

97.75

86.35

86.85

88.02

88.04

Recreation Enterprise Fund

29.03

27.48

25.71

18.57

18.55

Risk Fund

1.00

1.00

1.00

1.00

1.00

Health Fund

1.10

0.53

0.80

0.79

0.79

Kruesler Park

2.20

2.00

0.00

0.00

0.00

OPEB Trust

0.50

0.45

0.72

0.73

0.73

Retirement Fund

0.00

0.00

0.50

0.71

0.71

Total Authorized Positions

399.98

367.33

362.65

353.94

348.94

Inventory of Assets


The inventory of parts, supplies, fuel and materials on hand as of October 1, 2013, was

$460,434 and the total fixed asset inventory (which includes machinery, equipment, and vehicles with a value over $2,500 and computer equipment with a value over $1,500) was

$18,538,094.


OTHER FUNDS


Below are highlights from the budgets for other Town funds. Additional information can be found in the back of the document after 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 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.


The Town’s outstanding debt as of September 30, 2013 is shown below:


Outstanding Principal Year Balance @ September Issued 30, 2013


Purpose

2010A

$53,025,000

Finance the ACIP and refund outstanding debt.

2010B

$12,130,000

Worth Avenue Commercial District Project

Total

$65,155,000


As of September 30, 2013, the Town’s net bonded debt will amount to only 10.4% of the legal limit of $626,486,157 (5% of preliminary FY14 taxable value of $12,529,723,136).


The Town’s credit ratings were reevaluated with the issuance of the 2010 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. Standard and Poor’s recently reaffirmed the Town’s AAA and AA+ ratings. The S&P report is included with the fund balance survey report later in this document.

The 2010A Series Revenue Bonds total debt service appropriation of $3,626,800 is funded from non-ad valorem revenues, including $126,300 funded through the Recreation Enterprise Fund for the Town’s portion of the Par 3 Renovation. The non-ad valorem revenue transfer from the General Fund for FY14 is $3,500,000 and interest earnings are estimated at $500.


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.


The Town Council authorized an additional $2,600,000 appropriation in the FY14 budget for debt service for the upcoming issuance of debt for the second phase of the Accelerated Capital Improvement Program.


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


For FY14 the following are included in the Pay As You Go capital budget:



Projects that are to be funded in FY14 from the Bond Proceeds Fund for the ACIP program are listed under the Capital Funds tab. The budget does not include expenditures for the second phase of the Accelerated Capital Improvement Program, as that list of projects will be finalized later this year.


Coastal Protection


The CCMP Construction Fund (309) is used to fund the construction costs of the coastal projects. The total FY14 budget for coastal protection approved by the Town Council is

$22,844,000. Of this amount, administrative costs are paid out of the Public Works budget in the General Fund, leaving a budget requirement for FY14 of $22,136,000 for the CCMP Fund.


The table below summarizes the Coastal Protection Funding for FY14:


Funding Source

Amount

Current Coastal Protection Reserves

$11,324,632

Transfer from the FY14 General Fund Budget

4,200,000

Transfer from Reserves of Risk Insurance Fund

2,000,000

Transfer from Reserves of Equipment Replacement Fund

2,858,913

Total Available Funding for FY14

$20,383,545


The North Ocean Boulevard Seawall is a bondable project that is included in the FY14 Coastal budget at a cost of $5,600,000. The Town intends to fund the project from Phase 2 bond proceeds for the Accelerated Capital Improvement Projects.


At the October 8, 2013, Town Council meeting, the Town Council approved a funding plan for coastal management program that includes appropriation of $4,776,607 in FY15 and increasing at 3% per year thereafter. Town Council also decided to use ad valorem taxes to fund the coastal program. The Town’s long term financial forecasts have been updated to reflect these decisions.


Recreation Enterprise Fund (403)


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


Revenue


Staff continues to take a conservative approach to projecting recreation revenue for FY14, with an overall increase in revenue of 1.27% from the FY2013 projections. The budget contains decreases for nonresident tennis fees, increases for most dockage rates, and no changes to the golf and recreation center fees. The growth of participation at all facilities continues to be the primary strategy for increasing REF revenue.


Tennis revenue projections are slightly lower for FY14. In an effort to grow participation and to increase level of competition (as requested by our current customers), the adult and family nonresident annual fees will be decreased approximately 15%, with minor adjustments made to other nonresident fees (annual junior and daily drop-in rates).


Recreation Center revenues are also expected to be slightly lower. Although several new and enhanced programs have been planned and recently implemented, FY13 revenues were over estimated. Modest fee increases to individual activities will be in effect for the upcoming fiscal year, but staff is not recommending changes to building rental rates.


Projected Town Docks revenues for FY2014 are lower to correct for an over estimation in FY2013. A 2% increase has been included for most fees, with the exception of annual and seasonal 50’ and 60’ rates, which will remain at the FY13 levels. While the Town Docks has not attained 100% occupancy in recent years, the fee increases will maintain our place in the area market and will not hinder our pursuit of achieving 100% occupancy with long-term leases in the coming years.


There are no increases for the Par 3 Golf Course fees (which was increased in FY13). It is expected with the addition of the new clubhouse, play will increase, which in turn will increase

revenue. The food and beverage operations in the clubhouse will also be a new source of revenue.


Expenditures


The FY14 REF budget represents an increase of 8.38% from the FY13 budget. Administration expenses will increase due to the re-classification of a .75 FTE Equipment Operator position to an Office Assistant I position. In addition, $100,000 has been included in the FY14 budget for various repairs to the shore power electrical conduit at the Town Docks and $50,000 for various repairs and non-routine maintenance at the Par 3 Golf Course. The Par 3 Golf Course repairs are to be paid for from the Par 3 Maintenance and Improvement Reserve. The Tennis and the Recreation Center budgets will see minor increases from FY13. The transfer of fund profits to the General Fund is budgeted at $885,000, the same as in FY13.


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, 520)


The transfer to the Risk Fund (501) has decreased by $16,780 from FY13 to FY14.


The employer contribution for FY14 to the Health Insurance Fund (502) has remained the same as in FY13 due to expected savings from the new wellness program and the modifications to the 3-tier insurance program. A more complete health insurance update is provided behind the Internal Service Funds tab under the Health Insurance Fund section.


The Equipment Replacement Fund (520) 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 FY14 is $1,879,535. This amount represents a decrease of $91,434. Of the total depreciation for FY14, $235,920 represents the annual depreciation for computer equipment and $1,643,615 represents the annual depreciation for other fixed assets. In FY14, the total expenditures for equipment purchases will be $2,977,895. A detailed listing of planned equipment purchases is located in the Internal Service Funds section of this budget document. The Town Council authorized a transfer of $2,858,913 to the Coastal Protection Fund from the excess reserves of the Equipment Replacement Fund. The excess reserves had been accumulated from equipment that was not replaced and interest earned on the fund.


Trust Funds - Retirement (600)


The FY14 actuarially determined contribution to the defined benefit plan totals $5,916,828. A portion of the increase is caused by a change in the investment and wage inflation assumptions ($930,690). This amount is being offset by a transfer from the prepaid contribution reserve in the Retirement Fund. The Town accumulated a prepaid reserve in the Retirement Fund due to the “overpayment” to the fund by systematically contributing the actuarial determined amount rather than the State required amount (which was calculated as

a percent of payroll). A total of $2,169,323 has been reserved as a prepaid contribution in the Retirement Fund. The employer contribution for FY14 after the prepaid offset is

$4,986,138. The remainder of the FY14 increase is caused primarily by accelerated employee retirements and the final year of “smoothing” the investment losses from 2008.


As described earlier, the Town Council approved a change in employee contribution requirements so that all non-union employees contribute the same 2.47% of their salaries to the defined benefit pension plan. The cost of the change is $152,515, which has been included in the FY14 budget.


The Town contribution comparison for FY13 vs. FY14 is shown in the table below:


FY13

FY14

$ Change

% Change

General Employees

$1,223,869

$1,850,688

$626,819

51.2%

Lifeguards

125,294

143,700

18,406

14.7%

Police

1,257,107

1,881,949

624,842

49.7%

Firefighters

1,370,637

2,040,491

669,854

48.9%

Subtotal

$3,976,907

$5,916,828

1,939,921

48.8%

Less: Prepaid Contribution

0

($930,690)

($930,690)

100.0%

Plus: Contribution Change

0

152,515

152,515

100.0%

Amount included in FY14 Budget

$3,976,907

$5,138,653

$1,161,746

29.2%


Employer Defined Benefit Funding for Employee Pensions


FY10

FY11

FY12

FY13

FY14

General

$2,507,174

$2,927,020

$651,882

$1,223,869

$1,850,688

Lifeguards

109,310

148,364

15,600

125,294

143,700

Police

2,261,552

2,828,758

1,213,681

1,257,107

1,881,949

Fire-Rescue

2,647,210

3,189,802

1,635,237

1,370,637

2,040,491

Total

$7,525,246

$9,093,955

$3,516,400

$3,976,907

$5,916,828


The Town contributes a match of up to 4% to the Defined Contribution (DC) plan. In addition, the Town Council approved a 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. Contributions to the DC plan began with the

implementation of the hybrid plan on May 1, 2012. The Town contributions to the DC plan are shown below:


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Employer Defined Contribution Funding


FY12

Actual

FY13

Budget

FY14

Budget

General

$123,785

$309,235

$759,611

Lifeguards

2014

5,428

11,180

Police

43,163

211,200

310,024

Fire-Rescue

47,748

180,642

201,867

Total

$216,710

$706,505

$1,282,682


Health Insurance (OPEB) Trust (610)


The actuarially determined transfer to the OPEB trust from the General Fund in the FY14 budget is $1,506,000. This amount is $263,000 less than FY13. The trust was established to account for and fund the liability for 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 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.


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 FY14.


Strategic Planning


In 2001, the Town Council formed a Strategic Planning Board comprised of then Mayor Lesly Smith and four other Town residents. The board held a series of meetings and community forums to receive input from citizens, the business community, staff and others. The strategic plan was formally approved by the Town Council in 2003. The strategic plan is summarized below:


A Legacy Worth Keeping


Palm Beach is a fully developed community, world renowned for its extraordinary beauty, quality of life, and small-town character. Our permanent and seasonal residents love our barrier island community and are determined to preserve our legacy. We do not seek to change Palm Beach, but rather to protect our community’s assets, correct any deficiencies, and to manage inevitable change so as to maintain our tradition of excellence.


As we envision our future ten years from now, we see Palm Beach remaining true to the inspired legacy of our founders, a Mediterranean-style mecca of stunning architecture and natural beauty, acclaimed shopping, restaurants and hotels, a cosmopolitan culture, and an involved citizenry committed to civic and philanthropic causes and excellence in Town Government.


Quality and Responsive Town Government


Town government is supported by a respected Mayor and Town Council, a skilled and dedicated staff, and by the active volunteer participation of many citizens.

Palm Beach provides residents with the highest level of safety and security through its vigilance and commitment to high quality training and state-of-the-art equipment. The Town has maintained its fiscal strengths with resourceful budgeting and prudent management.


In the future, we envision...


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


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


Solid fiscal strength and strong alliances with state and federal partners. Actions will be taken and communicated to residents to instill confidence that optimum services are provided for taxes paid.


Public Facilities and Infrastructure


While completely developed, the Town of Palm Beach recognizes a number of redevelopment challenges and functional deficiencies among its current capital facilities. Traffic has increased and parking is at a premium. Beach erosion has become severe, threatening oceanfront property and diminishing a key scenic and recreational asset. Drainage deficiencies and occasional water shortages continue to pose a threat.


In the future we envision...


Beaches fully restored and maintained for the protection of oceanfront property, enjoyment of residents, and scenic enhancement.


Modernized, reliable infrastructure systems, including improved facilities for water distribution and storm drainage. Capital projects will be completed expeditiously and with an effort to limit the disruption they inevitably will cause to adjacent property owners.


Convenient network of roads and parking, less hampered by congestion and sufficient to meet local needs without encouraging additional traffic or visitation.


Character and Quality of Life


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


In the future we envision...


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


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


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


Town Staff Vision


In 2005, Town staff developed and implemented an organizational vision and values statement. A Visioning Committee of 20 employees representing each department and every level of authority developed the draft vision and values statement that was reviewed by all Town employees. The final vision and values statement is shown on the following page:


OUR VISION


The Town of Palm Beach delivers the highest quality service by continuously improving and always striving to be the standard by which others are measured.


Our Town Rich in history… Rich in service…

Always exceptional!


OUR VALUES

The employees of the Town of Palm Beach commit to and are guided by the following values:

Respect for everyone Highest ethical standards Cooperation and teamwork Commitment to quality Spirit of innovation

Open, timely communication Personal responsibility and accountability


This is a commitment by the employees of the Town of Palm Beach.

Our success as a team is dependent upon our actions being consistent with the vision & values we profess.


The Vision/Strategic Plan/Performance Measurement Process


The Townwide vision and strategic plan developed by the Strategic Planning Board and the organizational vision developed by Town staff complement each other. The Staff recognizes the Town’s rich history and commitment to excellence that has made the Town an exceptional place to live and work.


The strategic plan and organizational vision guide the decision making process as the elected officials and staff develop annual Townwide, department and program goals, and the annual budget. We then use KRM’s to track our progress in achieving the goals that have been set.


The process is depicted in a flowchart on the following page and elements of the process are described in greater detail in this section. The department and program performance measurement methodology are described in greater detail in the department sections of this document.


The Vision/Strategic Plan/Goals and Performance Measurement Process


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Townwide Budget Priorities for FY2014


The Town Council’s annual budget priorities for FY2014 are outlined below. These priorities were developed with input from the Mayor and Town Council, Town Manager, Department Directors, and staff at the March 14, 2013, Town Council meeting.


Once the Mayor and Town Council set the FY2014 priorities, the Departments developed goals and objectives that would accomplish the priorities. In addition, the Departments developed other major initiatives for the year. The Council priorities and Departmental goals will be reviewed on a continual basis throughout the fiscal year.


The following is a breakdown of the Town Council Priorities 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

Begin implementation of a long term coastal protection plan (consistent with scope and funding decisions to be made during the remainder of FY13).

Department

Department Goals

Town Manager

  • Work with the Town Council and advisors to develop a coastal protection financing plan that is both cost effective and equitable.

  • Work with Public Works and others to accomplish all approved FY14 coastal protection projects.

Finance

  • Develop Financing Plan for the Coastal Protection Program.

Public Works

  • Participate in Cost Allocation Modeling to Determine Funding Process.

  • Continue to Pursue Required Permits in Accordance with BMA.

Town Council Priority #2

Decide the scope and timing of Phase 2 of the Accelerated Capital Improvement Program, and if appropriate, begin implementation by issuing bonds to fund the program and designing projects to be constructed during FY15.

Department

Department Goals

Town Manager

  • Work with the Town Council and advisors to develop a cost effective financing plan for Phase 2 of the ACIP.

  • Work with Public Works and others to accomplish all “year 1” projects for Phase 2 of the ACIP.

Finance

  • Develop Financing Plan for the Accelerated Capital Improvement Program.


Public Works

  • Complete and close out Phase 1 projects from ACIP program.

  • Initiate Design Scopes of Services for Phase 2 Projects.

  • Participate in assisting with bond issuance with input as required.

Town Council Priority #3

Monitor the ongoing effects from the closure of the Flagler Memorial Bridge. Promote public safety and the efficient movement of traffic, take action to mitigate impacts to residents and the business community, and maximize communication with FDOT on the course of construction and completion timeline.

Department

Department Goals

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

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.

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.


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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Town of Palm Beach


Introductory Information


Location FY2014


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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

FY2014 General Fund Budget $65.4 Million

Taxable Property Valuation $12.5 Billion


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Town of Palm Beach Demographics


Population

2012 (Univ of Florida Est)


8,358

Service Statistics

Police Stations


1

2011 (Univ of Florida Est)

8,350

Fire-Rescue Stations

3

2010 (Census) (a)

8,348

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 Revenue Bond

Issuer’s Rating

Nature Islands 39 acres

Moody’s Aa1 Aaa

S&P AA+ AAA Registered Voters 8,237

(a) Under Review by Census Count Resolution Program

Taxable Value and Millage Rate


The Town Council approved a millage rate of 3.2468 for FY14, a slight decrease from the FY13 millage rate of 3.2512 that had been in place since FY09. Taxable value increased 5.16% to $12,529,723,136 for FY14. Ad Valorem revenue of

$38,647,700 is included in the FY14 budget. Town adopted final millage rate is above rollback but below maximum millage rates. The increase in tax revenue from the rollback rate is $1,765,520. The chart below identifies the millage rate options available to the Town and the Town’s adopted final millage rate.


Millage Rate

Tax Revenue

Rollback Millage Rate

3.0985

$36,882,180

Majority Vote Maximum Millage Rate

3.8021

$45,257,297

2/3 Vote Maximum Millage Rate

4.1823

$49,782,908

Town Adopted Final Millage Rate

3.2468

$36,647,700


The majority maximum millage rate is the prior year rolled-back rate adjusted to the rolled back rate if the prior year majority vote rate had been levied. This newly calculated rolled-back rate is then adjusted by the percentage change in per capita Florida personal income to arrive at the current year majority vote rate. This year the percentage change is Florida personal income was 1.69%. 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 has declined by 12.8% through FY13. For FY14, the taxable value increased by 5.16%. Due to the decline and the stable millage rate, property tax revenue has declined by $3,895,300 since the FY09 peak. The tax revenue trend is shown on the chart on the following page.


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The Town millage rate represents 17.99% of the total tax bill. The table below illustrates the difference between the FY13 vs. FY14 total tax bill by taxing district for a Palm Beach property owner with a taxable value of $1 million.


Impact on owner of $1 million property



Taxing Authority

FY13

Millage Rate

FY14

Millage Rate

FY14 Tax Change Per

$1 Million Value $1 million Value % Change

% of Total Tax Bill


Palm Beach


3.2512


3.2468


$3,247


-$4.40


-0.14%


17.99%

Palm Beach County

4.9902

4.9852

$4,985

-$5.00

-0.10%

27.62%

Palm Beach County School District

7.7780

7.5860

$7,586

-$192.00

-2.47%

42.04%

South Florida Water Mgmt

0.3676

0.3523

$352

-$15.30

-4.16%

1.95%

Children Services

0.7300

0.7025

$703

-$27.50

-3.77%

3.89%

Florida Inland Navigation

0.0345

0.0345

$35

$0.00

0.00%

0.19%

Health Care District

1.1220

1.0800

$1,080

-$42.00

-3.74%

5.98%

Everglades Construction

0.0613

0.0587

$59

-$2.60

-4.24%

0.33%

Grand Total

18.3348

18.0460

$18,046

-$288.80

-18.62%

100.00%


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


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


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Property Breakdown by Number of Parcels


The Town has a total of 9,482 total parcels. Residential units total 8,947 or 94% of all parcels. Condominiums and Cooperatives represent the greatest percentage of total parcels in the Town at 68% or 6,413 parcels. Single family residential parcels are the second largest group at 2,309 parcels or 24% of the total. Commercial and industrial parcels total 404 and the balance is made up of multi-family, government, institutional and miscellaneous parcels.

Properties with a Homestead exemption represent 38% 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 $12.4 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 7.6% of the total value of parcels. Properties with a homestead exemption represent $5.58 billion (45%) of the total taxable value.

Historical Single Family Building Permits


Beginning in 2008, building permit revenue declined due to the downturn in the economy. For the past three years, permit revenue and permit activity increased. A total of 8,345 permits were issued in FY11, 8,424 permits were issued in FY12 and 9,275 permits were issued in FY13, compared to 7,727 for FY10. Total permit valuation for FY11 was $179,215,325, $191,604,640 for FY12, and $223,157,589 for FY13 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 FY14. The improvement in permit activity and new construction has resulted in an improvement of the Town’s taxable value.

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.


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

several hotels in the St.

Augustine area, Flagler

extended his holdings

southward. He bought and

improved existing railways

anticipating the tremendous

potential for South Florida.

His railway was named the

Florida East Coast Railway.


Flagler’s agents soon were

buying acres of land on the

island of Palm Beach. Many

early homesteaders

found themselves very wealthy,

as orders had been given to

buy “at any price”.

Ground was broken May 1,

1893, and on February 11,

1894, the Royal Poinciana

Hotel, the largest wood structure

in the world, opened in

Palm Beach and welcomed 17

guests. A month after the

opening, the first train pulled

from the station on Loftin

Street (later used as an office

and warehouse by the Town of

Palm Beach) in West Palm

Beach on the newly built

bridge across Lake Worth to

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


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

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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FY2014 Approved Budget Calendar

Task Date Task Date


Finance to distribute FY14 Budget instructions

03/01/2013

Town Manager’s Review of Risk Management and Human Resources Budget

05/17/2013

Submit initial CIP request forms to Public Works

03/15/2013

Town Manager’s Review of Town Manager and Finance Budgets

05/24/2013

Public Works reviews CIP requests with Departments

03/22/2013

Property Appraiser Issues Preliminary Property Values

06/01/2013

Public Works Forwards CIP requests to Finance

04/8/2013

Final Budget Document Pages Returned to Finance

06/10/2013

Department’s Budget Requests are due to Finance

04/8/2013

Notice from Property Appraiser of Preliminary Certification of Taxable Value

07/01/2013

Town Council Meeting – Discussion of Long Term Financial Plan

04/09/2013

Special Town Council Meeting to Consider Proposed FY14 Budget and Initial Resolutions(s) Adopting Special Non‐Ad Valorem Assessments

07/11/2013

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

04/18/2013

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

Week of August 19


Town Manager’s Review of Recreation Enterprise Fund Budget


04/19/2013

Town Council Meeting – First Public Hearing to Approve Tentative Budget and Proposed Tax Rate for FY14 and Final Resolution(s) Adopting Special Non‐Ad Valorem Assessments

09/10/2013

5:01PM

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

04/26/2013

Town Council Meeting – Second Public Hearing to Adopt FY14 Budget and Tax Rate

09/18/2013

5:01PM

Town Manager’s Review of Public Works and Capital Budgets

05/2/2013

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

10/01/2013


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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.


Fund Budget Overview

FY2014


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Fund Budget Overview


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Debt

Capital

Internal

Trust &

General

Service

Projects Enterprise

Service

Agency

Totals


Revenues

Ad Valorem Taxes

$38,647,700

$0

$0

$0

$0

$0

$38,647,700

Non Ad Valorem Taxes

7,367,500

0

0

0

0

0

7,367,500

Licenses and Permits

6,588,200

0

0

0

0

0

6,588,200

Intergovernmental

1,052,000

0

1,000,000

0

0

0

2,052,000

Charges for Services

3,552,275

0

0

4,981,300

6,751,500

0

15,285,075

Fines and Forfeitures

1,181,000

0

0

0

0

0

1,181,000

Bond/Loan Proceeds

0

0

11,960,000

0

0

0

11,960,000

Contributions

0

0

0

0

0

7,171,638

7,171,638

Interest Earnings

425,373

1,000

76,400

3,100

68,500

15,919,169

16,493,542

Miscellaneous

247,845

0

10,000

0

30,000

930,690

1,218,535

Special Assessments

0

775,000

273,261

0

0

0

1,048,261

Interfund Transfers

885,000

6,254,863

10,283,913

0

1,876,000

1,506,000

20,805,776

Subtotal

59,946,893

7,030,863

23,603,574

4,984,400

8,726,000

25,527,497

129,819,227

Appropriations from

Fund Balance

5,459,600

4,200

24,030,534

420,207

13,884,776

3,247

43,802,564

Total Revenues

$65,406,493

$7,035,063

$47,634,108

$5,404,607

$22,610,776

$25,530,744

$173,621,791


Expenditures

Salaries and Wages

$24,298,881

$0

$0

$1,297,374

$140,824

$97,397

$25,834,476

Employee Benefits

13,082,570

0

0

542,313

5,099,727

2,512,747

21,237,357

Contractual

8,472,843

0

211,125

1,379,400

1,626,943

18,279,100

29,969,411

Commodities

1,701,960

0

0

246,900

4,855

300

1,954,015

Capital Outlay

132,645

0

33,532,165

80,200

3,010,895

0

36,755,905

Depreciation

1,877,935

0

0

597,900

1,600

0

2,477,435

Debt Service

0

6,993,700

0

0

0

0

6,993,700

Interfund Transfers

14,682,000

0

253,563

1,011,300

8,725,932

0

24,672,795

Other

1,157,659

11,500

205,000

249,220

4,000,000

0

5,623,379

Subtotal

65,406,493

7,005,200

34,201,853

5,404,607

22,610,776

20,889,544

155,518,473

Transfer to Fund

Balance/Retained

Earnings

0

29,863

13,432,255

0

0

4,641,200

18,103,318

Total Expenditures

$65,406,493

$7,035,063

$47,634,108

$5,404,607

$22,610,776

$25,530,744

$173,621,791


Financial Ratios

Debt

Capital

Internal

Trust &

General

Service

Projects

Enterprise

Service

Agency

Total

Ad Valorem Taxes as

percentage of total

fund budget 59.09%

0.00%

0.00%

0.00%

0.00%

0.00%

22.26%

Ad Valorem Taxes per

capita (8,358

population) $4,624

$0

$0

$0

$0

$0

$4,624

Total expenditures

per capita (8,358

population) $7,826

$842

$5,699

$647

$2,705

$3,055

$20,773

Personnel as a

percentage of the

total budget 37.15%

0.00%

0.00%

24.00%

0.62%

0.38%

14.88%


Capital expenditures

as percentage of total

fund budget 0.20%

0.00%

70.40%

1.48%

13.32%

0.00%

21.17%

Capital expenditures

per capita (8,358

population) $16

$0

$4,012

$10

$360

$0

$4,398


Debt

Capital

Internal

Trust &

General Service

Projects Enterprise

Service

Agency

Totals


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FY14 Budget by Revenue Type All Funds


Appropriations from Fund Balance 25.4%


Interfund Transfers


Ad Valorem Taxes 22.4%

Sales and Use Taxes 4.3%


Licenses and Permits

12.1%


0.0%


Contributions

Charges for Services 8.9%

3.8%

Miscellaneous

4.2%

6.9%

Fines and ForIfnetieturgroevsernmental

0.7%

Interest Earnings 9.6%

0.7%

Revenue 1.2%


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FY14 Budget by Expenditure Classification All Funds



Commodities 1.1%

Contractual 17.3%


Capital Outlay

21.2% Depreciation

1.4%


Debt Service 4.0%

Interfund Transfers

14.2%


Employee Benefits 12.2%


Personnel 14.9%

Other 3.2%

Transfer to Fund Balance/Retained Earnings

10.4%



Description

Summary of Major Revenues by Fund Type

FY14 Budget

FY14 Budget

to FY2014 FY2011 FY2012 FY2013 FY2013 FY2014 FY13 Budget %

Actual Actual Budget Projected Budget % Variance of Total

General Fund

Ad Valorem Taxes

$36,635,343

$36,662,916

$36,865,400

$37,473,108

$38,647,700

4.83%

59.09%

Sales and Use Taxes

8,093,648

7,984,412

7,477,500

7,950,388

7,367,500

-1.47%

11.26%

Licenses and Permits

5,749,007

5,880,328

6,202,300

6,959,779

6,588,200

6.22%

10.07%

Intergovernmental Revenue

1,319,119

1,051,432

1,020,450

939,240

1,052,000

3.09%

1.61%

Charges for Services

3,461,768

4,081,260

3,652,116

3,623,763

3,552,275

-2.73%

5.43%

Fines and Forfeitures

1,297,226

1,106,435

1,299,000

1,325,034

1,181,000

-9.08%

1.81%

Interest Earnings

495,649

495,311

900,500

33,220

425,373

-52.76%

0.65%

Miscellaneous

765,686

683,521

251,981

934,420

247,845

-1.64%

0.38%

Interfund Transfers

2,039,000

800,000

885,000

885,000

885,000

0.00%

1.35%

Subtotal

59,856,446

58,745,615

58,554,247

60,123,952

59,946,893

2.38%

91.65%

Appropriations from Fund Balanc

e 1,601,861

0

1,157,033

0

5,459,600

371.86%

8.35%

Total General Fund

$61,458,307

$58,745,615

$59,711,280

$60,123,952

$65,406,493

9.54%

100.00%

Debt Service Funds

Interest Earnings

73

289

1,500

243

1,000

-33.33%

0.01%

Special Assessments

0

0

0

0

775,000

100.00%

11.02%

Miscellaneous

0

5,190

0

5,538

0

0.00%

0.00%

Interfund Transfers

4,480,427

5,973,538

4,469,709

4,407,800

6,254,863

39.94%

88.91%

Subtotal

4,480,500

5,979,017

4,471,209

4,413,581

7,030,863

57.25%

99.94%

Appropriations from Fund Balanc

e 128,616

0

300

0

4,200

1300.00%

0.06%

Total Debt Service Funds

$4,609,116

$5,979,017

$4,471,509

$4,413,581

$7,035,063

57.33%

100.00%

Capital Projects Funds

Interest Earnings

241,934

208,908

112,200

21,788

76,400

-31.91%

0.16%

Grants/Interlocal/Donations

3,531,595

1,536,455

810,000

71,399

1,000,000

23.46%

2.10%

Special Assessment Revenue

989,815

1,068,135

1,130,405

1,002,510

273,261

-75.83%

0.57%

Loan Proceeds/Contributions

0

0

0

10,000

11,960,000

100.00%

25.11%

Miscellaneous

16,213

54,495

0

116,802

10,000

-100.00%

0.02%

Interfund Transfers

4,664,641

5,001,400

3,939,514

5,965,103

10,283,913

161.05%

21.59%

Subtotal

9,444,198

7,869,393

5,992,119

7,187,602

23,603,574

293.91%

49.55%

Appropriations from Fund Balanc

e 0

12,622,144

34,057,605

5,861,177

24,030,534

-29.44%

50.45%

Total Capital Projects Funds

$9,444,198

$20,491,537

$40,049,724

$13,048,779

$47,634,108

18.94%

100.00%

Enterprise Funds

Charges for Services

$4,305,704

$4,352,717

$6,152,300

$4,564,380

$4,981,300

-19.03%

92.17%

Interest Earnings

27,312

28,718

17,500

1,957

3,100

-82.29%

0.06%

Grants/Interlocal/Donations

0

0

1,000,000

1,835,801

0

-100.00%

0.00%

Interfund Transfers

0

0

0

0

0

0.00%

0.00%

Miscellaneous

2,764

34,077

1,500

9,349

0

-100.00%

0.00%

Subtotal

4,335,780

4,415,512

7,171,300

6,411,487

4,984,400

-30.50%

92.23%

Appropriations from Retained Erng 50,495

109,879

114,358

0

420,207

267.45%

7.77%

Total Enterprise Funds

$4,386,275

$4,525,391

$7,285,658

$6,411,487

$5,404,607

-25.82%

100.00%

Internal Service Funds

Interest Earnings

$242,297

$238,343

$215,000

-$22,598

$68,500

-68.14%

0.30%

Miscellaneous

$0

$377,132

$0

$1,004,747

$30,000

100.00%

0.13%

Interfund Transfers

$0

$167,957

$0

$0

$1,876,000

100.00%

8.30%

Charges for Services

10,304,812

8,302,203

8,806,349

8,933,421

6,751,500

-23.33%

29.86%

Subtotal

10,547,109

9,085,635

9,021,349

9,915,570

8,726,000

-3.27%

38.59%

Appropriations from Retained Erng 0

0

7,967,480

0

13,884,776

74.27%

61.41%

Total Internal Service Funds

$10,547,109

$9,085,635

$16,988,829

$9,915,570

$22,610,776

33.09%

100.00%

Trust & Agency Funds

Intergovernmental Revenue

$786,402

$830,571

$0

$0

$0

0.00%

0.00%

Interest Earnings

904,013

1,540,983

16,010,975

1,552,980

15,919,169

-0.57%

62.35%

Gain/Loss on Investments

55,891

27,608,083

0

13,045,155

0

0.00%

0.00%

Charges for Services

1,533,000

2,852,137

1,769,000

3,160,128

0

-100.00%

0.00%

Miscellaneous

14,448

75,500

0

590,198

930,690

100.00%

3.65%

Contributions

10,342,085

4,726,521

6,316,214

4,720,917

7,171,638

13.54%

28.09%

Interfund Transfers

0

0

0

0

1,506,000

100.00%

5.90%

Subtotal

13,635,839

37,633,795

24,096,189

23,069,378

25,527,497

5.94%

99.99%

Appropriations from Fund Balanc

e 3,331,156

0

0

0

3,297

100.00%

0.01%

Total Trust & Agency Funds

$16,966,995

$37,633,795

$24,096,189

$23,069,378

$25,530,794

5.95%

100.00%



Description

Summary of Major Revenues by Fund Type

FY14 Budget

FY14 Budget

to FY2014 FY2011 FY2012 FY2013 FY2013 FY2014 FY13 Budget %

Actual Actual Budget Projected Budget % Variance of Total

All Funds

Ad Valorem Taxes

$36,635,343

$36,662,916

$36,865,400

$37,473,108

$38,647,700

4.83%

22.26%

Sales and Use Taxes

8,093,648

7,984,412

7,477,500

7,950,388

7,367,500

-1.47%

4.24%

Licenses and Permits

5,749,007

5,880,328

6,202,300

6,959,779

6,588,200

6.22%

3.79%

Intergovernmental Revenue

2,105,521

1,882,003

1,020,450

939,240

1,052,000

3.09%

0.61%

Charges for Services

19,605,284

19,588,317

20,379,765

20,281,692

15,285,075

-25.00%

8.80%

Fines and Forfeitures

1,297,226

1,106,435

1,299,000

1,325,034

1,181,000

-9.08%

0.68%

Special Assessment Revenue

989,815

1,068,135

1,130,405

1,002,510

1,048,261

-7.27%

0.60%

Loan Proceeds/Contributions

0

0

0

10,000

11,960,000

0.00%

6.89%

Contributions

10,342,085

4,726,521

6,316,214

4,720,917

7,171,638

13.54%

4.13%

Interest Earnings

1,911,278

2,512,552

17,257,675

1,587,590

16,493,542

-4.43%

9.50%

Gain/(Loss) on Investments

55,891

27,608,083

0

13,045,155

0

0.00%

0.00%

Miscellaneous

799,111

1,229,915

253,481

2,661,054

1,218,535

380.72%

0.70%

Interfund Transfers

11,184,068

11,942,895

9,294,223

11,257,903

20,805,776

123.86%

11.98%

Grants/Interlocal/Donations

3,531,595

1,536,455

1,810,000

1,907,200

1,000,000

-44.75%

0.58%

Approp. from Fund Bal/Ret Earngs

5,112,128

12,732,023

43,296,776

5,861,177

43,802,614

1.17%

25.23%

Total All Funds

$107,412,000

$136,460,990

$152,603,189

$116,982,747

$173,621,841

13.77%

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

FY14 Budget by Revenue Type ‐ All Funds

Interfund Transfers, 12.0%

Miscellaneous, 0.7%



Gain/(Loss) on Investments, 0.0%

Interest Earnings, 9.5% Contributions, 4.1%

Loan Proceeds/Contributions, 6.9%

Grants/Interlocal/Donations, 0.6%


Approp. from Fund Bal/Ret Earngs, 25.2%


Special Assessment Revenue, 0.6%


Fines and Forfeitures, 0.7%


Charges for Services, 8.8%


Sales and Use Taxes, 4.2%


Ad Valorem Taxes, 22.3%

Intergovernmental Revenue, 0.6%

Licenses and Permits, 3.8%



Description

Summary of Expenditure Classifications by Fund Type FY14 Budget

FY14 Budget

to FY2014 FY2011 FY2012 FY2013 FY2013 FY2014 FY13 Budget of

Actual Actual Budget Projected Budget % Variance % of Total


General Fund

Salaries and Wages

$24,396,539

$23,627,368

$24,464,929

$22,947,477

$24,298,881

-0.68%

37.15%

Employee Benefits

$16,906,261

$11,512,417

$13,086,050

$12,878,534

$13,082,570

-0.03%

20.00%

Contractual

6,839,969

8,807,800

8,258,348

8,987,461

8,472,843

2.60%

12.95%

Commodities

1,493,951

1,560,677

1,528,071

1,511,708

1,701,960

11.38%

2.60%

Capital Outlay

2,547,679

1,881,319

2,084,014

2,040,617

2,010,580

-3.52%

3.07%

Interfund Transfers

7,090,000

8,570,619

7,265,099

9,265,099

14,682,000

102.09%

22.45%

Other

2,183,908

284,901

3,024,769

288,989

1,157,659

-61.73%

1.77%

Subtotal

61,458,307

56,245,101

59,711,280

57,919,885

65,406,493

9.54%

100.00%

Transfer to Fund Balance

0

2,500,514

0

2,204,067

0

0.00%

0.00%

Total General Fund

$61,458,307

$58,745,615

$59,711,280

$60,123,952

$65,406,493

9.54%

100.00%


Debt Service Funds

Debt Service

$4,485,001

$5,940,135

$4,397,600

$4,397,494

$6,993,700

59.03%

99.41%

Other

8,851

4,550

11,500

3,800

11,500

0.00%

0.16%

Interfund Transfers

115,264

0

0

0

0

0.00%

0.00%

Subtotal

4,609,116

5,944,685

4,409,100

4,401,294

7,005,200

58.88%

99.58%

Transfer to Fund Balance

0

34,332

62,409

12,287

29,863

-52.15%

0.42%

Total Debt Service Funds

$4,609,116

$5,979,017

$4,471,509

$4,413,581

$7,035,063

57.33%

100.00%


Capital Projects Funds

Capital Outlay

$7,413,267

$18,100,837

$38,863,446

$12,068,975

$33,743,290

-13.17%

70.84%

Interfund Transfers

1,939,804

2,390,700

1,041,709

979,804

253,563

-75.66%

0.53%

Other

0

0

0

0

205,000

0.00%

0.43%

Subtotal

9,353,071

20,491,537

39,905,155

13,048,779

34,201,853

-14.29%

71.80%

Transfer to Fund Balance

91,127

144,569

13,432,255

9191.24%

28.20%

Total Capital Projects Funds

$9,444,198

$20,491,537

$40,049,724

$13,048,779

$47,634,108

18.94%

100.00%


Enterprise Funds

Salaries and Wages

$1,226,627

$1,245,692

$1,296,582

$1,201,855

$1,297,374

0.06%

24.01%

Employee Benefits

$625,654

$424,518

$478,478

$470,595

$542,313

13.34%

10.03%

Contractual

1,024,504

1,192,040

1,148,650

1,297,406

1,379,400

20.09%

25.52%

Commodities

204,215

215,396

231,700

217,106

246,900

6.56%

4.57%

Capital Outlay

540,737

523,507

2,881,648

2,066,267

678,100

-76.47%

12.55%

Debt Service

125,338

126,000

128,000

128,000

126,000

100.00%

2.33%

Interfund Transfers

639,000

798,238

885,000

885,000

885,000

0.00%

16.38%

Other

200

0

235,600

0

249,220

5.78%

4.61%

Subtotal

4,386,275

4,525,391

7,285,658

6,266,229

5,404,307

-25.82%

100.00%

Transfer to Retained Earnings

0

0

0

145,258

0

0.00%

0.00%

Total Enterprise Funds

$4,386,275

$4,525,391

$7,285,658

$6,411,487

$5,404,307

-25.82%

100.00%


Internal Service Funds

Salaries and Wages

$118,128

$128,995

$136,653

$135,643

$140,824

3.05%

0.62%

Employee Benefits

5,612,399

4,858,572

5,129,808

4,120,570

5,099,727

-0.59%

22.55%

Contractual

1,655,304

-487,448

1,691,791

2,500,116

1,626,943

-3.83%

7.20%

Commodities

2,358

55,998

4,855

48,550

4,855

0.00%

0.02%

Capital Outlay

1,470,085

1,566,887

1,158,703

1,473,442

3,012,495

159.99%

13.32%

Interfund Transfers

0

0

4,867,019

1,100,000

8,725,932

100.00%

38.59%

Other

64,229

504,276

4,000,000

17,880

4,000,000

0.00%

17.69%

Subtotal

8,922,503

6,627,280

16,988,829

9,396,201

22,610,776

33.09%

100.00%

Transfer to Retained Earnings

1,624,606

2,458,355

0

519,369

0

0.00%

0.00%

Total Internal Sevice Funds

$10,547,109

$9,085,635

$16,988,829

$9,915,570

$22,610,776

33.09%

100.00%


Trust & Agency Funds

Contractual

$16,966,995

$18,142,840

$19,138,090

$19,613,211

$20,889,544

9.15%

81.82%

Transfer to Fund Balance

0

19,490,955

4,958,099

3,456,167

4,641,200

-6.39%

18.18%

Total Trust & Agency Funds

$16,966,995

$37,633,795

$24,096,189

$23,069,378

$25,530,744

5.95%

100.00%


Summary of Expenditure Classifications by Fund Type FY14 Budget

FY14 Budget

to FY2014 FY2011 FY2012 FY2013 FY2013 FY2014 FY13 Budget of

Description Actual Actual Budget Projected Budget % Variance % of Total


Total: All Funds

Salaries and Wages

$25,741,294

$25,002,055

$25,898,164

$24,284,975

$25,737,079

-0.62%

14.82%

Employee Benefits

$23,144,314

$16,795,507

$18,694,336

$17,469,699

$18,724,610

0.16%

10.78%

Contractual

26,486,772

27,655,232

30,236,879

32,398,194

32,368,730

7.05%

18.64%

Commodities

1,700,524

1,832,071

1,764,626

1,777,364

1,953,715

10.72%

1.13%

Capital Outlay

11,971,768

22,072,550

44,987,811

17,649,301

39,444,465

-12.32%

22.72%

Debt Service

4,610,339

6,066,135

4,525,600

4,525,494

7,119,700

57.32%

4.10%

Interfund Transfers

9,784,068

11,759,557

14,058,827

12,229,903

24,546,495

74.60%

14.14%

Transfer to Fund Bal/Ret Earnin

1,715,733

24,484,156

5,165,077

6,337,148

18,103,318

250.49%

10.43%

Other

2,257,188

793,727

7,271,869

310,669

5,623,379

-22.67%

3.24%

Subtotal All Funds

$107,412,000

$136,460,990

$152,603,189

$116,982,747

$173,621,491

13.77%

100.00%


image

FY14 Budget by Expenditure Classification All Funds


Transfer to Fund Bal/Ret Earnings

Other Salaries and Wages

10.4%

3.2%

14.8%


Interfund Transfers 14.1%


Debt Service 4.1%


Capital Outlay 22.7%


Contractual 18.6%


Commodities 1.1%

Employee Benefits 10.8%


image


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Town of Palm Beach


Reserve Analysis


Town of Palm Beach Reserves


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


Unassigned Fund Balance - General Fund


image

Pursuant to adopted policy, the unassigned fund balance for the General Fund is to be maintained at a minimum level of 25% of current year General Fund budgeted expenditures. This minimum level is to be maintained to protect the Town against economic downturns, temporary revenue shortfalls,

unpredicted one-time expenditures, and for tax rate stabilization purposes. Twenty-five percent of the FY14 General Fund operating budget (General Fund budget less coastal transfer) is $15,301,623. The FY12 ending fund balance was $21,424,261.


The General Fund Undesignated Fund Balance has consistently exceeded the required minimum level of 25%. The chart


25,000,000


20,000,000


15,000,000


10,000,000


5,000,000


0

General Fund


2009 2010 2011 2012 2013


40.00%


35.00%


30.00%


25.00%


20.00%


15.00%


10.00%


5.00%


0.00%

details the General Fund Undesignated Fund

Balance and the percent of budgeted expenditures the balance represents. For

Fund Balance 20,980,277 18,394,714 18,155,941 21,424,261 16,000,000

% of budget 33.39% 30.60% 31.02% 35.88% 26.14%

the FY14 budget, a transfer of $860,000 from fund balance was used to fund the contingency reserve as directed by policy. During FY13, the Town Council approved a budget amendment transferring $2,000,000 from the undesignated fund balance to the coastal protection fund for future coastal projects and the FY14 budget contains an additional transfer of $4,000,000 to the coastal protection fund. The estimated FY13 ending fund balance is $16,000,000 which is 26.14% of the FY14 operating expenditure budget.


Reserves - Risk Fund


image

Risk Fund Reserve

9,000,000


8,000,000


7,000,000


6,000,000


5,000,000


4,000,000


3,000,000


2,000,000


1,000,000


0

The total reserve balance for the Risk Fund was $7,990,553 as of September 30, 2012. Out of this reserve balance, the Town funds the Reserve for Catastrophic Exposures/Emergencies - Risk Fund in the amount of $2,500,000 and the Contingency Reserve for $500,000. The estimated balance at the end of FY13 is

$8,528,465. Included in the FY14 budget is a Town Council authorized the transfer of

2009

2010

2011

2012

2013

Reserves 7,620,642 6,669,596 6,863,675 7,990,553 8,528,465

$2,000,000 of the excess Risk Fund reserves to the Coastal Protection Fund. The trend for the Risk Fund Reserve is shown in the table.


Reserve for Catastrophic Exposures/Emergencies - Risk Fund


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


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.


image

The Town’s enterprise fund includes the operations of the Town Docks, the Par 3 Golf Course, tennis activities and

youth and adult recreation programs.


At the end of FY12, the net asset balance for the Recreation Enterprise Fund (REF) was $3,697,167.

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


3,500,000


3,000,000


2,500,000


2,000,000


1,500,000


1,000,000


500,000



M&I Tennis M&I Golf

Equipment Replacement

2009

2010

2011

2012

2013

-

8,446

16,418

23,867

31,075

-

50,872

108,772

162,138

212,375

351,468

426,749

458,002

397,132

410,000

Dock Replacement

196,718

2,084,181

2,240,125

2,395,723

2,555,723

-

Recreation Enterprise Fund Reserves


At the end of FY13, an

estimated $2,555,723 had been set aside in the Dock Replacement Reserve. The Dock Replacement reserve was created to fund the replacement cost of the construction of the Town’s docks whenever it is determined they must be replaced. The replacement reserve is to be maintained at 100% of accumulated depreciation plus accumulated interest earned on the reserve.


The Par 3 Golf Course charges an additional $2 per round to fund a maintenance and improvement reserve. At the end of FY13, the estimated 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 estimated at $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 estimated balance in the REF Equipment Replacement Fund for FY13 is $410,000.

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 estimated balance in the Equipment

Replacement Fund for year-end FY13 is $13,059,804. For FY14, income including the depreciation transfer will total $1,959,535 and expenditures for capital equipment are budgeted at $3,010,895. An analysis of the reserves identified an excess balance of

$2,858,913 caused by interest earned by the fund and equipment that will not be replaced. The Town Council authorized a transfer of this excess reserve to the coastal protection fund for FY14.


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


A Reserve for Compensated Absences reduces the budgetary fluctuations due to the payout of accrued leave time to employees when they leave Town service. This reserve is funded at a rate of 100% of the fiscal year end accrued leave balances. Funds are appropriated annually from this reserve based upon estimates of pay-outs of eligible accrued vacation, sick and compensatory time and the related payroll tax liability. The balance in the reserve as of September 30, 2013, was $3,390,226. The FY14 appropriation for the pay-out of eligible accrued vacation, sick and compensatory time from this reserve is $599,600.


Health Insurance Reserve


The balance of the reserve in the Health Fund at the end FY13 is estimated to be

$3,516,903. These reserves guard against any deficiencies in the Town’s self insurance health fund for active employees’ insurance expenditures. The trend in the reserve balance is shown in the chart.


image

Health Fund Reserves


3500000

3000000

2500000

2000000

1500000

1000000

500000

0

2009

2010

2011

2012

2013

Reserves

1,845,717

2,565,197

2,683,896

3,234,334

3,516,903

4000000



OPEB (Other Post Employment Benefits) Trust


The Town’s OPEB Trust Fund was established to comply with GASB Statements 43 and 54, which required the establishment of a liability for actuarially determined costs of retiree health benefits. This fund is overseen by the Town’s Investment Advisory Committee. The estimated net asset balance in this trust is $21,986,340 as of September 30, 2013. The actuarially determined transfer from the General Fund for the OPEB liability for FY14 is $1,506,000. The Town continues to be well ahead of other government agencies in funding this liability.


Retirement Fund


The Town provides pension benefits for General Employees, Lifeguards, Police Officers, and Firefighters. The funds were separately managed by 3 pension boards until the consolidation on April 1, 2012 into the Employee’s Retirement Fund. The Retirement Board oversees all of the Town’s pension assets and retirement programs. The net assets of the consolidated fund at the end of FY12 were $187,286,530. The estimated balance at the end of FY13 is $190,711,900.


25,000,000


20,000,000


15,000,000


10,000,000


5,000,000


195,000,000

190,000,000

185,000,000

180,000,000

175,000,000

170,000,000

165,000,000

160,000,000

155,000,000

150,000,000

145,000,000

image

OPEB Trust


image

0

2009

2010

2011

2012

2013

OPEB Trust

15,898,539

17,524,179

18,173,086

20,942,253

21,986,340

Retirement Fund


2009 2010 2011 2012 2013 Est.

Retirement Funds 163,129,393 174,544,804 170,564,741 187,286,530 190,711,900


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 FY14 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 on the following page identifies the contingency balances appropriated in the FY13 and the FY14 budgets:


Contingency Reserves FY2013 and FY2014


Fund

FY2013

Budget

FY2014

Budget

General Fund

$843,000

$860,000

Capital Fund

$201,000

$205,000

Equipment Replacement Fund

$500,000

$500,000

Risk Fund

$500,000

$500,000

Health Fund

$500,000

$500,000

Recreation Enterprise Fund

$235,600

$249,220


Undesignated Fund Balance/Retained Earnings Summary


image

All reserves are at or over the policy established minimum. The financial strength of the Town can be measured by the health of its reserves. The rating agencies look closely at the fund balance levels and the financial policies in place when rating a municipality. In 2010, the rating agencies reviewed the Town’s credit ratings in preparation for the issuance of the 2010 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 Revenue Bonds and confirmed the Town’s Aaa issuer credit rating. Standard and Poor’s issued a AA+ credit rating on the 2010 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. During 2013, Standard and Poor’s reaffirmed the Town’s AA+ Revenue Bond rating and the AAA issuer credit rating.


The table and the chart on the following page summarize the trend of the unassigned fund balance, net asset balances, compensated absence, and replacement reserve balances for FY09 through estimated FY13.


Reserve Balances Fiscal Years 2009 – 2013



Fund

2009

2010

2011

2012

2013

General Fund

20,980,277

18,394,714

18,155,941

21,424,261

16,000,000

Compensated Absence (GF)


3,333,242


3,065,810


3,621,915


3,315,135


3,390,226

Equipment Replacement Fund


10,840,088


11,667,524


13,672,222


14,870,188


13,059,804

Recreation Enterprise Fund

1,050,115

294,764

413,966

707,381

162,994

Recreation ERF

351,468

426,749

458,002

397,132

410,000

Dock Replacement

196,718

2,084,181

2,240,125

2,395,723

2,555,723

Par 3 M&I Reserve

0

50,872

108,722

162,138

212,375

Tennis M&I reserve

0

8,446

16,418

23,867

31,075

Health Fund

1,845,717

2,565,197

2,683,896

3,234,334

3,516,903

Risk Fund

7,620,642

6,669,596

6,863,675

7,990,553

8,528,465

Health - OPEB Trust

15,898,539

17,524,179

18,173,086

20,942,253

21,986,340

Pension Fund

163,129,393

174,544,804

170,564,741

187,286,530

190,711,900

Total

225,246,199

237,296,836

236,972,759

262,749,495

260,565,805



2009

2010

2011

2012

2013

General Fund

20,980,277

18,394,714

18,155,941

21,424,261

16,000,000

OPEB Trust

15,898,539

17,524,179

18,173,086

20,942,253

21,986,340

Equipment Replacement Fund

10,840,088

11,667,524

13,672,222

14,870,188

13,059,804

Risk Fund

7,620,642

6,669,596

6,863,675

7,990,553

8,528,465

Compensated Absence

3,333,242

3,065,810

3,621,915

3,315,135

3,390,226

Health Fund

1,845,717

2,565,197

2,683,896

3,234,334

3,516,903

Recreation Enterprise Fund

2,955,244

2,867,062

3,315,215

3,697,167

3,447,167

25,000,000

image

Reserve Trends


20,000,000


15,000,000


10,000,000


5,000,000


0

image

image


Town of Palm Beach


Capital Expenditures

Capital Expenditures

Per Town of Palm Beach policy, capital expenditures for tangible property are defined as having a useful life of more than one year and meeting the following threshold values:

  1. Infrastructure - $50,000

  2. Machinery, Equipment (other than computers), Vehicles and Office Furniture - $2,500

  3. Computers - $1,500

A summary of FY14 budgeted capital expenditures can be found on the following page.


Infrastructure


Infrastructure construction valued at $50,000 and greater is budgeted for in the Capital Improvement Fund. Construction Projects for Beach Restoration are budgeted for in the Comprehensive Coastal Management Fund. Minor construction valued at less than $50,000 is budgeted for in the General Fund ($96,300).


Tangible/Intangible Property


Purchases for new tangible/intangible property are budgeted in the General Fund ($35,545) and purchases for replacement tangible/intangible property are budgeted in the Equipment Replacement Fund (ERF)($3,010,895). The ERF was created on October 1, 2001 and was initially funded with Undesignated General Fund Balance to cover the accumulated depreciation through September 30, 2001 based on the initial purchase price of the property. On September 30, 2006, additional Undesignated General Fund Balance was transferred to the ERF to bring the funding to accumulated depreciation on the replacement value of the property. On an annual basis, depreciation is budgeted within the general fund departmental program budgets and transferred to the ERF. FY2014 budgeted depreciation is $1,879,535.


Recreation Enterprise Fund


The Recreation Enterprise Fund budgets for Recreation infrastructure (Town Docks Repairs (100,000), depreciation ($597,900) and tangible property ($80,200).

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FY2014 Town-wide Capital Expenditures



Department/ Description


General Fund


Equipment Replacement Fund


Capital Funds


Recreation Fund


Total

Information Systems

$245,920

$505,200

$0

$0

$751,120

Annual Depreciation

235,920

0

0

0

235,920

Major Computer Equip (>$1,500)

10,000

505,200

0

0

515,200

Human Resources

677

0

0

0

677

Annual Depreciation

677

0

0

0

677

Finance