City Commission - Regular Meeting

I don't think we're, oh, now we're on. Are you on now?

Deputy Vice Mayor Marker.

Here.

Commissioner Mollica. Here. Commissioner Casale. Here. Vice Mayor Burns. Here. Mayor Carney.

Here. Thank you very much. Okay. This is the budget workshop meeting. We're opening up to public comments to start. If there are any members of the public wishing to address the commission on the budget matters, please come to the lectern, give your name and zip code for the record. You will each have three minutes. Seeing none, no throngs running to the front, public comment will be closed. Follow-up regarding the fiscal year of the 2026-2027 proposed budget considerations. Mr. Moore, you said you wanted to add some opening remarks.

I do, Mr. Mayor. Thank you, ladies and gentlemen. I appreciate it. So ladies and gentlemen, good evening. And I see this as an opportunity for a productive ability for a commission to offer its final expectations so that we can hopefully achieve a very smooth September 8th first hearing regarding the fiscal year 2026-2027 proposed budget, as well as the final hearing consideration two weeks later, September 22nd. Many meetings have taken place, I've had individual dialogues with each of you all to discuss why we are where we are econometrically and financially. In addition, some other considerations as it relates to Amendment 3 and a whole host of other challenges for which not only the city of Derry Beach will experience but other municipalities throughout the state. That's widely known, that's widely being discussed and Actually, Mayor Kearney, you and I had a discussion when we could go yesterday about the merits of a workshop meeting. So I'd like to offer credit where credit's due because, of course, this is an opportunity, as I just stated, to productively discuss a path forward in terms of military position and opportunities to get to the absolute best place possible. Nevertheless, both the Office of the City Manager and the Department of Finance have a cogent responsibility to provide as much information, data, analytics, and metrics as we can so that a sound decision can be made as it relates to the expectation communicated to me by each of you all individually as well as in group settings, quite frankly, relative to maintaining levels of service and, in some respects, expanding what we do as a city operation. The city of Delray Beach, ladies and gentlemen, in comparison to many other municipalities in the South Florida marketplace, the Miami metropolitan area specifically as it is, is quite frankly far more busy in terms of project implementation, level of service, and expanding quality of life offerings across the board. As such, we take those observations into consideration when we apply econometrics, data analytics, and metrics to offer proposals for review and consideration. Part of that does take under consideration a review of the marketplace in terms of what their fiscal policies are. And in many respects, over the last 10 years, as we've attempted to underscore over the last few months, as well as the past couple fiscal year processes, we made adjustments that other municipalities did not. I think about my previous city manager assignments in which we consider the millage rate recommendation and the goal is to maintain a healthy millage rate position and do what we can to not increase it. That's paramount, that is appropriate, and that has not been the case in this community as we demonstrated via numerous other presentations and various discussions along these lines. So some of the information that we'll be sharing as far as our formal presentation may be a bit repetitive. However, it does underscore the important point of why we are where we are. And it's important that we get our arms around that so that proper decisions can be made in everybody's best interest based on the realities of what's being implemented as municipality number one, and number two, what the expectations are moving forward. So with that, Mr. Mayor, ladies and gentlemen, thank you for the opportunity to engage and indulge us today. Nevertheless, after the formal presentation concludes, it will be City Commission's time and opportunity to offer its expectations. And from the day it's here, I'll do what I can to help facilitate a productive outcome. Thank you. So thank you very much.

I appreciate the city managers and the city's position. You have your job. We have our job, which is to give direction. Yes, sir. I will say that one of the reasons that I thought this would be important for us all is that each one of us, you know, we all speak to you about what we would like to see and all the cuts we want to have, but nobody really knows what the others think. Because maybe Commissioner Malika has a great idea, but I don't know what it is. She shared it with you, but you don't share it with me because she shared it with you because you're not allowed. No, sir. Same with Commissioner Casale, same with Commissioner Burns. So what I'm hoping is that we can all lay out where we think we can do budget. And maybe we conclude, well, we can't do that. That's fine. But I believe that in budget discussions, it's incumbent upon the commission to understand where all the other commissioners are in terms of where they think they can and they can't save money and what are the priorities and what aren't the priorities. So this is what I'm really hoping that we come and, you know, I have one view. Commissioner Markham may have a different view, and that's fine. But then I can understand his view, or he can understand my view. And we don't know what anyone up here thinks about what they would like to cut and what they wouldn't like to cut or what they want to expand or don't want to expand. So I'm hoping that after this presentation, we have a really frank discussion up here as to And we may decide. I don't know where we would decide.

Yes, sir.

But anyway, I'm going to turn it over to Mr. Dakowitz now for your...

So one other statement prior to Mr. Dakowitz beginning his dialogue. We provided an initial draft presentation Friday. We uploaded it as we typically try to do in advance of a regular meeting or a workshop meeting. We've been working during the weekend, Monday, Tuesday, providing as much information. Given the fact that this is a budget workshop, I ask for you all's indulgence and support and us having that latitude because again, our interest is to do as much as we possibly can to provide as much up-to-date information possible. So it's been moving along those lines. Nevertheless, because this is a workshop meeting, I would ask you to view this exercise as a week in advance presentation of the first public hearing as it relates to the proposed budget consideration, not to mention what you talked about, Mayor, an opportunity for the commission to chime in publicly with respect to expectations and direction. So that's what this is for. Please support us in that regard. We mean very well. Got you. Mr. Dacus, if you would, please.

Thank you. I wanted to start with the Florida statute and city charter regulations governing budgets and how we operate. 2025 Florida Statute 166.241, fiscal year's budget's appeal of municipal law enforcement agency budget and budget amendments 3A. The tentative budget must be posted on the municipality's official website at least two days before the budget hearing held pursuant to 200.065 or other law to consider such budget and must remain on the website for at least 45 days. The City of Delray Beach Charter Article IV Administrative Executive Section 4.05 Budget Procedure. Letter B, budget submission. The city manager shall submit his or her recommended budget for the ensuing fiscal year to the commission on or before the first regular meeting in August. Complete copies of the proposed budget shall be on file and available to the public for inspection during office hours in the office of the city clerk commencing the following business day. Here's a little bit of timeline of what we have been working with in this year's budget. On June 9th, we had the first budget workshop. We presented a PowerPoint summary, general fund operating initial budget with preliminary taxable values. The capital program was not included. It was posted four days before on June 5th, with the city clerk through their SharePoint OneDrive. July 14th was our second budget workshop. It was a PowerPoint summary of the general fund. It was the first city manager-recommended operating budget with certified taxable values. Those are coming from the tax collector of Palm Beach County. CIP was not involved, and several days before, July 10th, 26th, The city clerk had the information on their SharePoint OneDrive. 7-23-26, we held a town hall meeting. It's primarily for citizens, taxpayers, although several commissioners joined us. We appreciated that. PowerPoint summary, all funds. and preliminary operating budget, no CIP. That same day, we sent the documents to the communications department because it was primarily for the citizens. And Gina would take that and make sure it got disseminated or was available to the appropriate parties. On August 21st, 26th, there was no meeting, but the preliminary budget worksheets for all funds operating and preliminary CIP budget were sent to Communications for Distribution It was posted on our finance webpage, and the city clerk had a hard copy. We're talking over a 300-page document. So our concept was it's posted on the finance webpage, communications can distribute it through their vehicles, and the city clerk had a hard copy for inspection by anybody who comes in person to inspect the budget. September 1st, that would be today, our third budget workshop. PowerPoint summary general fund, the second city manager recommended operating budget with certified taxable values. As previously, it was uploaded on the 28th. Again, City Clerk SharePoint OneDrive. A week from today, first public hearing, PowerPoint summary, and tentative budget worksheets, all funds operating, and a balanced capital project program. Again, we anticipate uploading that September 4th. SharePoint, OneDrive, City Clerk would be the PowerPoint only, and the finance webpage and City Clerk hard copy for the extensive document. Two weeks later, September 22nd, the second and final public hearing with the vote, PowerPoint summary, adopted budget worksheet after your vote, all funds, operating and balanced CIP, We would get it on SharePoint, OneDrive, City Clerk, the PowerPoint only several days in advance. The deadline for the finance webpage and City Clerk hard copy is by October 22nd. If we have the final numbers, we would upload it sooner than that. Just want to give you a context. We have one senior budget manager and one junior budget analyst And that's it. We have a very lean department. We spend a lot of time in between all these dates uploading data, getting better data from the tax collector, from different departments, from the state on what they're giving us in grants, and it all comes together. We feel we honor the duty of communicating along the way, and by the end we'll have complete data with a bound hard copy as well. You've seen this slide before, historical and proposed operating millage rates, actual expenditures, and municipal cost index. The green rectangles represent the millage rates, and we're looking at 10, 11 years. So as we all know, the millage rates have been reduced every year for eight years. from 6.9611 down to 5.9063 in the rollback year of 2025. The current year we're in, last year's budget cycle, we increased the 5.9 to 6.1611, and we're proposing the city manager's proposal for 2627 budget is 6.4371. You can note That's still below the military of 2023. The upper yellow line is the municipal cost index, which just shows how costs for municipalities across the country are going up. Inflation has affected everyone. And the orange line in the middle is our actual expenditures here in Delray Beach. If you notice, it pretty much models the municipal cost index. So costs are going up. We have 60 to 70% of our budget are salaries. which get increases anywhere from 3% to 8%, depending upon which departments. And we have contracts that go up with accelerator clauses. We're subject to inflation like everyone is in their personal economy. We did a peer review to look at other cities near us. City of Delray Beach, in left on the green, we have a proposed millage rate this coming year of 6.4660.

Since 2016, that- Mr. That number takes into consideration the debt millage application as well, just to be clear. So it's the 6.4371 operating millage in addition to the remaining debt service millage for an aggregate total of- The number you just shared, just to be clear.

Thank you. Yes, the debt is a separate line item on our real estate bills. So the total is 6.4660. Since 2016, our proposed 2027 millage is down 10.3%. The taxable property value in our city is a little bit over $21 billion. and a proposed fire assessment fee, annual per dwelling unit, we have zero. Let's look at the other cities. Fort Lauderdale, their millage is 4.3409, but the growth of their millage rate over those 10 years was a positive 5.4% increase, and their taxable property value is three times what ours is, and they have a separate fire assessment fee of $338. At Boca Raton, again, 4.6971, their increase has been 7%, and they have more than double our property value of 42.71 billion, and they charge $224 per dwelling for fire in addition. Palm Beach Gardens, the most similar to us, has a 5.0537 millitrate, a little bit below ours. Their reduction over the 10 years is 10.8. Their property value a little bit larger than ours, 23.57, and they do not have a fire assessment fee. Pompano Beach, 5.6063, a little bit less than ours. But they've increased it by 2.2% over 10 years. Their property value is 24.68, higher than ours. And they charge per dwelling $361 for the fire fee, which is built into our millage rates. Deerfield Beach, 6.1642. They've decreased their millage rate by 7.8, a little bit less than we have. Their taxable property is smaller, 12.78. and they charge $365 for their proposed fire assessment fee. Coral Springs, 6.1813, a little bit lower than ours, but their increase in the millage rate has been over 21% over the 10 years. Their taxable property value is about 75%, 80% of ours, and they charge $308 for their fire assessment fee. The last three cities have higher proposed millage rates, Miramar 7.1172, Boynton 7.75, West Palm 8.184. Millage rate growth, Miramar has increased by 5.2, Boynton a decline of 1.9%. A little bit like 2% of what we've done. And West Palm Beach, a negative 3.7, one-third of our reductions. The property value, Miramar is $16.97. Boynton Beach, $11 billion. Palm Beach, $27.85. But each of them have fire fees. $479. 170 for Boynton, 250 for West Palm. The two footnotes are the real takeaways. Most peer municipalities leverage fire assessment fees and maintain stable millage rates. The city of Delray Beach does not collect fire assessment fees and continues to maintain low millage rate. So compared to our peers, plus minus, we're doing better overall compared to almost all the cities except for maybe Palm Beach Gardens, which is close. You've seen this before when we presented the city manager's operating budget and millage rate. So on the left-hand side, the revenues went from 201 million to 205.8 million as we did our process. Our millage rate from the current year, 6.1611, going up to 6.4371 recommended, and we split that into two parts. 8.5 million was due just to the increase in the taxable value of our properties, which is a good thing. Property tax revenue from the millage increase was 5.7 million. Okay, but now if you go to the upper right-hand corner, we show a little bit more detail. So we have to, when we increase the taxable value, there's a reduction because the CRA TIF funding has to go down a corresponding amount. So this past year's budget, With a $118 million property tax revenue, the reduction was 25.3, so we netted only 92.7 million property tax revenues. With the proposed budget, it looks like an increase of $14.1 million from $118 to $132 million. 8.5 from the taxable value of our homes and 5.7 for the millage, but then we have the reduction of CR8, 2.1 million because of the taxable values and 1.2 million because of the millage. So the net property tax revenues are going from 92.7 million to 103.5 million. an increase of about $11 million. If we go back to the left side and we looked at the fund balance, the projected fund balance drawdown for the recommended budget for 2027 is 8.1 million. So both the millage rate, real estate tax revenues, and the fund balance drawdown are considered revenues in our budget. If you add the two, $13.7 million. You take the 205.792 at the top and you add that 13 million, you now get total revenues of 219.6 million. Bottom right-hand corner, let's just analyze the fund balance drawdown a bit. We had an audited last year fund balance of $49.13 million. The finance department estimates that this year, fiscal year 2026, we will draw down on reserves $2 million. Historically, for the last at least four or five years, we have not drawn down what we ended up budgeting on drawdowns. The managers did a great job coming in with revenues and expenses close to budget, and overall, we did not have to draw down what we budgeted. Taking the 49.1 audited number minus the estimated 2 million, we project the fund balance, the end of this month would be $47.13 million, which is 21.94% as a percentage of expenditures, less transfers, which is the way the Commission has directed us to make that calculation. The projected drawdown, which we took from the left side, 8.1 million, would reduce the 47.1 million down to 39.024 million, projected a year from now, September 30, 2027. Projected expenditures at that moment, 13 months from now, less the transfers for the fund balance calculation, are projected to be $214.8 million. Our fund balance as a percent of expenditures is 18.17%. I have spoken to the bond rating agencies extensively about fund balance. They say it varies by part of the country. In the western part of the country, they can see fund balance ratios of 50 to 75%. They're much more conservative. In the northeast where I came from, if you got 15 to 20%, that would be a lot. Norwalk, the city I was CFO of for five years, we had the largest rainy day fund balance in the entire state of Connecticut, 169 towns. And the mayor made a point when COVID hit, That's why we like to have a rainy day fund, because it's for unexpected anticipated. So as a CFO, the higher the better, but I believe this drawdown is necessary to juggle all the different demands on this coming fiscal year 2027 budget. We're now looking at the Delray Beach projected operating budget for fiscal year 27, general fund expenditure details by department at the city manager recommended level. We did this in size order. Police budget recommended, let's call it $60 million. We were asked what was reduced there and what was retained in those numbers so attrition which is the assumption that someone leaves and we don't replace them for a period of time let's say on average three months so instead of putting the full amount into the budget we take out the attrition piece and some operating supplies as well. What was retained were COLAs, two tech support analysts, and one evidence custodian. Next, we look at the fire budget, $57.3 million. We had reductions of attrition, the Control the Bleed program and AED, which are the defibrillators, some training, explorers uniforms for some student program and pressure washing of the firehouses. What was retained were colas, one lifeguard, one special services manager, and overtime. So it's a balancing act. This is the product of five to six months of negotiations and juggling. Parks and Recreation, which is composed of four different departments, recreation facilities, special events, cemetery, and other recreation facilities, $24.8 million. So the reduction was attrition. What was included? COLAs, one administrative office coordinator, repairs to the baseball field, janitorial supplies, equipment for new building, which was not included, in new buildings being built, backflow irrigation maintenance, Recreation facilities had colas, irrigation, maintenance, parking lot, root removal, I guess roots from trees which had to be removed, and because of higher attendance, there were costs associated with that. Special events had colas also, higher attendance. Cemetery was colas, mausoleum maintenance, and the fountain. Other recreation facilities was an increase in the grant to DD8. Public works, engineering and parking facilities included, $15.1 million. Attrition was reduced. COLAs were included. Pavement preservation, I believe that was a request of the commission. One building maintenance worker from two part-times. So the additional cost was not that much. It's more of converting two part-times into one full-time. Engineering with COLAs and certifications and trainings, which are important to keep that level of excellence. Parking COLAs and parking management services. Information technology, $6.7 million budget. The reductions were attrition, near map software, which was transferred to utilities. So we're keeping the software, but it's being paid for from the utility fund rather than the general fund. Retention was the COLA. Neighborhood and community services, $5 million. The reduction was attrition. The retention was COLAs, radios and operating supplies, certifications, and training. Miscellaneous was primarily That's the funding for nonprofits, which are at your discretion. Development services, $3 million. Attrition was reduced. The retention were COLAs. Two-thirds of a planner, one-third will be paid by the building fund, not general fund. One supply service specialist and Crywolf software. finance three three million attrition was reduced we have colas true comp labor software this is software that will help us in labor negotiations but also In finance, we want to use that to help verify and confirm payroll and headcount expenses. So that's a piggyback. We are paying 25%. If you drop down three lines to human resources, because it's for labor negotiations, human resources are picking up 75% of that cost. City attorney, attrition reduction, COLAs included, $2 million. City manager, $1.7 million, attrition reduction, COLAs, audio for external meetings. I believe when meetings are off-site, we have the ability with audio to project it in-house. Palm Beach County Certified City Manager Association, got my acronym here. IEDC must be something with economic development and certifications and training. Human resources, 1.5 million. Attrition reduced. COLAs included. The TruCom software, 75%. And some additional job fairs, which have been very well received. Communications, 1.3 million. Reduction for attrition. COLAs. Creative arts school, additional offerings. It's been very successful. We want to feed the good ones, and we're giving more money to expand that program. City clerk, $810,000. Attrition reduction, COLAs included. Purchasing, similarly, about $800,000 attrition and COLAs. City commission, $421,000. Internal auditor, $306,000. Attrition for reduction, COLAs were retained, and one outside specialty audit So if there's a specialized audit, we might go outside and contract with someone with that specialty. Grant total, $219.6 million.

sir can i ask a quick question when you use the the word for attrition am i getting the definition right from my past that's when people leave we don't replace them right away and and and we absorb some savings that way it doesn't mean we're eliminating positions no no no that's correct we're talking about from a budgeting perspective that's what i thought historically yeah

You would have turnover, but you budget every position for the full year.

Correct.

And you're going to have a savings.

You will.

Two months, four months, whatever. We are very tight. So we went to each department. We looked at historical turnover. expectations for this coming year that the department has informed us. So we tried to tighten that up and gain some savings.

Savings, I get that.

That's what we did.

Okay. Was every department different or did you, the attrition is three to four months in every department? I think it goes by the department.

Some departments can fill a position pretty quickly. Right. Some take a while. So we just try to use common sense. We look at historical trends to try to, as a reality check, but we tend to go with what the department head says. They may have two openings. They say, this one is so critical, we're going to fill it quickly. And the other one, it may take a while. It's hard to find a replacement.

So it depends on the department. It's by department. Got it.

Any other questions?

I've finished, yeah.

That ends this presentation.

Well, it was question time anyway, so there you go.

I have another question.

I have a question.

Go ahead, yes. I'm hoping we're going to have a discussion now about what we've just seen.

So, and thank you, Mr. Moore. I met with Mr. Moore yesterday, and I asked for these additional slides to be. to be put in there, so thank you. So this is at the anticipated, this is at these, considering the millage of 6.437.

Yes, ma'am. Okay. Yes, ma'am, it absolutely is.

Okay.

I'm just going to, I want to, before we get started, you know, you talk about Palm Beach Gardens, and I've spent a lot of time looking at Palm Beach Gardens. Okay. You know, similar population and all that other kind of stuff. In almost every single category, they have fewer people working in there.

Can you go to that slide? Can we look at the slides while you're talking?

I'm just talking generally speaking in terms of they have 20% fewer employees. And that's across the board, by the way. They have 10 or 12 fewer uniformed police officers, for example. They've got fewer fire people. And I understand the dynamics are different in the town because they have more gated communities. So I understand a lot of the distinctions. But city employees, they have about a good 20% to 25% fewer city employees.

Just to address that for a second. Sure. I think one of the subtle things that doesn't come through is you have to look at the computer systems. when you have efficient computer systems the workers can do the work faster they could do it more accurately but it takes historical investment of getting upgraded software and training so i would just i would just say that that's something that we don't look at i personally am working on four different computer systems including a full erp change okay so what happens is They have to conduct today's operations on old systems. We have an AS400, IBM AS400, which was state of the art in 1990. I've told friends of mine, and they say that should be going to the IT museum. We're in the process. We're in the process. I wasn't here when Jay Stacey came, but you can't – we didn't get here overnight. It doesn't get fixed overnight. But all I'm saying, and I would predict that as those systems come on board and we gain efficiencies – We may have real attrition where when someone leaves, we can combine some of the tasks and reduce the headcount.

I understand what we're trying to get to. And in fact, in 2012, when I sat in that chair where Commissioner Mollick is, Palm Beach Gardens instituted online submissions in the planning and zoning department for zoning applications. And I brought it up at that point to do. And we finally got around to starting to do it some 14 years later. So I understand Palm Beach Gardens has been ahead of us for a long time certainly in the in the technology area I think we're frankly a better run city but that's just my own view but I do worry when we talk about attrition I do worry that you know we are we've had a 30% increase in personnel in like a seven or eight year period where the population hasn't been 30% increase in population. There hasn't been, you know, we are spending a lot of money. And in my view that, and no one wants to hear this, but we need to start talking about every other company, every other place in the country is doing things reducing the number of people that are in the day-to-day engagement. You know, again, I had this argument a couple years back. We were talking about fire, about trying to bring, you know, private ambulance services in to do the non-emergencies. You know, the person falls off a bike, they break their leg. I don't think we need a high class paramedic, you know, to be answering that call. But viruses, they all want to do it. So we have all these union people doing all these other jobs, and we're paying pensions, and it gets very expensive. But other places are changing. Other places are saying, how do we save money? How do we privatize certain components? How do we get, instead of hiring additional people to be inspectors, to do outsourcing of that? I mean, there's so many different ways that people are doing it. We don't do any of it. We don't do any of it.

Any of it. I'd like to take a first stab at that.

If I said a presentation that features the city's police, I think that's important.

Features what, I'm sorry?

The comparable city analysis.

Oh, okay. I would just say 53% of our expenses is police and fire.

I'm agreeing. Okay? Nobody's disagreeing with you.

And we're not doing much to try to save in those compartments. But my point is, you know, I come from New York where in politics they talk about the third rail. Because when you're on a subway, there are two rails to get the subway going, and the third is the electricity. And if you touch it, you get electrocuted and maybe die. So in politics, they talk about the third rail of certain topics. I understand that police and fire is the third rail down here in Florida.

Certainly South Florida.

South Florida, Southeast Florida, whatever. Okay. So the point is, when we go from 2448 to 2472, because arbitrators are looking at what the other towns are doing and you have to be competitive, that's a headcount increase that I don't know. Before we went to 2472, did we not have adequate fire service and coverage? I don't know. Same thing with the police. I wasn't here. All I'm saying is, like Willie Sutton says, I go to the banks because that's where the money is. When I look at headcount, some of the departments you talk about are very lean. They don't have a lot of excess people. I think that if I were doing a cost reduction study on headcount, I would start based on how many people are in which department, and then you have to figure out what the appropriate staffing is. We agree on a lot of things about trying to reduce the costs.

See, my view is I don't think we should be raising the millage. And I've made that point. And everyone says, oh, we have to do it because we had that rollback. Untrue. Untrue. I've looked at statistics about the increase in the percentage of the property value increases for all these other places. And ours outpaced them. So by our rollback, really only brought us back to where the others were in terms of their increases. So when you look at what the percentage of the property value increase was in Delray for that same period, we really did great. I mean, we were a bubble. We did great. We did better than Boca. We did better than Palm Beach Gardens. Actually, Palm Beach Gardens was pretty close. But we did better than, I'm sorry, yes?

May I just comment in this realm? When we look at our population, though, everybody says, oh, you know, you've got so much more money coming in and your population hasn't increased. That's not at all true. Yeah, you see a 6% increase. But when you look at the census, the census only calculates people who are permanent residents here. What you really need to look at is the development in the number of housing units that have come in to talk about the needs. And we're talking like there's thousands of them.

I would love to discuss housing units. Like over 3,000. I've actually had this conversation with the city about the number of housing units. Everybody's always saying, oh, we've got all this increased housing and all this. No, we have the actual percentage of increased housing is much less than you think.

I don't think so.

People are taking four-unit buildings and they're building two. They're taking two lots, they're building one.

We've got all those apartments that are on Congress. There's over 1,000 units in a couple of years approved and developed. Disagree with you totally.

Those are people using our roads, using our police. You'll get your chance. you get your chance mr mayor respectfully i've looked at all those things and i and we i understand your argument i understand your argument and i do understand that a police department needs to have a complement to be able to have not just the 67 000 people that are here full-time residents as we would say you have to account for the 105 000 that are really here because you have all those people that are down here seasonally I understand all that too. I've calculated. We have been a lot of figuring out what all the numbers are.

Well, give them to us. Let's work on the numbers.

I want to hear from everybody else about what, because all I keep hearing is we have to raise our millage.

Okay, let's get to the conversation then. Without any effort to try to. Let's just get to the meat of it, because talking theoretically about cutting, it's all great, but let's get to the cuts. I have some if you want me to lay them out.

Sure, I'd like that.

Mr. Mayor, before you all chime in, may I offer a point, please? One of the reasons why page five was included in this presentation, the municipal peer review, is comparable full service municipalities in South Florida for which we are involved. And one of the reasons for the millage rate growth metric being incorporated in this regard is because of what I stated during the introduction comments is Many of those municipalities, all of them in this case, with the exception of Palm Beach Gardens, maintained millage rates over the last 10 years or so more. They did not have the reduction that the city of Delray Beach experienced.

Because they did not have the increase in the base property values. And I've got all those. I mean, that analysis has been done. But they did. They actually did.

They actually did.

To put the city of Pompano Beach, the city of Miramar, and the city as comparables is ridiculous.

May I please? Yes. So again, with the analysis, and again, I'm speaking on experience with all due respect. So we had... illustrated a number of times the decreases in millage rates over the past 10 years, the past decade or so, with the exception of the last year of tweak, rollback rate included. Typically what occurs is municipalities get to a place in which they can maintain a millage rate and keep it comparable for the coming years so that any increases in revenue will simply offset the municipal cost index or the municipal rate of inflation. That's also, I like to put it, the term I use. So that's pretty much been experienced not only throughout many municipalities of comparable scope. I emphasize scope, not size, scope. But throughout the country as well. And Derry Beach is unique in that regard because direction was offered over the last 10 years to reduce the military.

Why? Why do we reduce our military? Because we had exploding tax values.

You did.

Increase in our tax base. We had exploding compared to everybody else around us.

Other municipalities in South Florida had a similar experience. However, they did not tweak it down.

We eclipsed every single one by sometimes several digits. We eclipsed every single one, with the possible exception of Palm Beach Gardens. because only because they had the PGA and other things that were building in those big developments. But other than that, we eclipsed the property values for Boynton, percentage-wise, based on our population of things, not total numbers, because Boynton's always going to be bigger than us. But if you look at Boca's increase in valuation from one year to the next, that percentage was much less than the appreciations in Delray.

They have way more commercial property tax revenue. Boca has way more commercial property tax revenue than we do. We can't keep on arguing these numbers line together.

You're talking over each other truly hard.

I'm trying to finish, but if I can finish, you'll get your turn. So I understand the point. All I'm saying is that we are not paying enough attention to try to figure out ways to Trim our costs so that we don't have to raise our millage. That's the sum total of what I'm saying. And I believe there are ways to do it. Now, if you'd like to talk about cuts, let's talk about cuts.

I'll do it. And I just would say to you, though, even if... We also have to look at our reserves in this and what we want them to be. And at the end of this budget, you're going down to 18. So even if you cut things out, I would argue it would be better to cut and leave things and allow our reserves to be back up to the 21% where we want them to be, where we agreed. We used to have reserves, when I sat here last time, at 35%. Then they went down to 25%. Now they're below 20%. That should raise flags for people. And look, I think there are cuts. But you have to ask yourself, why are the costs increasing? Because we're making the votes that are causing those increases. That's the point. We're voting on salary increases. We're voting on COLA. We're voting on contracts. We're voting everything in. When these costs are increasing, don't ask people why. We are why. That's the point. We are the reason the costs are increasing. But we can't consistently vote yes to contracts and higher compensation, additional spending, and then act surprised when we get the bill. Because being fiscally responsible means we shouldn't be voting for those things in the first place. Or B, we pay for them because we did vote for them.

You and I have been on the same side on a lot of these issues.

You and I are a lot on the same side.

On these cost matters. And all I'm trying to do is to get us back.

Okay, let me throw out a couple things. I sat with Mr. Moore and I went.

Seriously, because I don't know what you've said to him.

Listen, I'm going to tell you right now.

He will rightly and correctly. He doesn't say, well, Commissioner Casale suggested it. He doesn't do that. I can't do that. I know that. And I won't. You're obeying the law. That's fine. This is why I want us to know where everybody thinks about it.

Because maybe she has a great idea. Maybe Judy has a great idea.

Maybe I don't. But I'm expecting others to have great ideas.

Can I just make a point on your comment? Yes. If we reduce the millage rate from what the city manager has recommended, it will have a compounding negative effect. Not only will it reduce our revenues for this coming year, but if the referendum passes in November, that's going to be the base, which has limits on increases in the future. So if we don't increase the millage rate this year, this particular year, it has a double effect. than any other year. Secondly, you talk about the reserves. We have a whole bunch of financings where we are looking to go to the market. We're looking at police and fire, public safety. We're looking at parks. We're looking at wastewater, stormwater. Stormwater. Stormwater. And we're looking at working with... Community redevelopment?

No.

Yes.

Yes.

Community redevelopment.

Community redevelopment agency.

So we're working on four finances. Last week's report. Yes. Okay.

And somewhat not related, but in a way it is, the remainder of the water utility bond, they look at the city's aggregate position in terms of that consideration, although that's a separate transaction process, but it is taken into consideration.

So the point is that the rating agencies are looking... at our reserves, especially knowing that Florida has this referendum coming. So if we could find savings but use it to beef up the reserves while we keep the millage rate as high as we can this year so that we don't get double penalized,

It might be an approach that is exactly what I just said even if we make these cuts I still think we leave where we are and we build up our reserves because we are down to 18% where we were at 21 we were at 25 and Just a few years ago. We were at 35. So let me go through a couple So people should understand when you're looking at this budget ten point five four million of it is just for personnel That's pay, COLA, retirement contributions, FICA, insurance, workers' comp, and special pay. So what is left over for us to cut isn't very much. I was speaking with Mr. Moore because, and I said this in our meeting earlier, We were told when we jumped with the fire contract to 2472, we would see a substantial decrease in the overtime, yet it's gone up considerably. The overtime for the fire department total is $3.3 million, and it was... Less last year and less the year before. So with that contract, now Mr. Moore had indicated to me that he thought that was due to vacancies in the department. But it's actually not. I contacted the chief and talked to him. And what he said is the way you have to look at what you need is taking two vacancies uh individuals in a day for an unplanned vacancy and calculate that out mathematically it comes to 2.2 million dollars he said that he'd like to have a buffer to not be coming back to the commission and asking for additional money and i think 2.5 is a very fair amount you could take 500 000 right there out of the fire overtime and put it back into your budget And I didn't go that in depth to the police department, but now that we have full staffing in the police, I feel like we should have a little bit of money to move in there as well. There's a few things we could look to do. We could freeze portions of the travel training and membership, not membership that's required. and we could gain $150,000. We could reduce down some of our professional services by 50% because every year we put in every subcategory professional services, and I think those are buffers. We could save $390,000 there. If we could defer some of our equipment in the police department, I don't know if we can, but Chief, if you can, we could save ourselves $390,000. some money there and potentially about four hundred thousand if we reduce our other overtime by five percent not those two departments you'll save a couple hundred thousand dollars if we reduce down our rental and lease growth by twenty percent right vehicles that in equipment we're renting at least you could save a hundred and fifty thousand dollars and if we defer some of our non-critical maintenance you could save 129 000 This isn't a lot of money. It's only $1.6 million. But if you can grab $500,000 overtime from the fire, add it to the $1.6 million, you're over $2 million. You grab some from the police department, you can get yourself to $2.5 million. Then what you can do is you can go into, and I added all that other contractual stuff. I'm sorry. I can't. You can't speak now. I apologize. Office supplies in some departments are up 40%. I think that's one of those buffers you could look to pull a little down. Workers' compensation is a varying number in different departments. In some, it's over 56%. And in some, it's well over 199% and 5,000%. I can't figure that out. But I think workers' comp... Maybe you have some flexibility in there. That may be one of those areas where we're padding. Promotional activities and food seems to have gone up in every department, along with operating supplies and books. And another thing, and this is just one silly thing that I marked. I have a ton of tabs. FICA. went up in our department 16%. FICA is across the board 10%. So we don't have anybody new in our department, so it shouldn't go up 15%. But you see the FICA number varying in all the departments where it may be is because people are coming, going, or what have you. But in our department, it should not be. And then there's one other thing, and I gave you a lot. But page 130, we're buying a special events vehicle for $35,000. And look, when we're in the situation we're in here, you have to question, do we really need that? And that's what I would say maybe we don't. My concern is the reserves, as I've said. So even if we make these cuts, this could maybe bring our number down slightly, Mayor. But I still think we have to be monitoring the reserves number. And we should be very concerned about it going below 21%. Thank you.

Commissioner Cassell, I'd like to make a contribution, if I may.

Thank you.

Because you talked a little bit about fire rescue. And again, as you shared publicly, you and I had an opportunity to visit previously. So a big part of the overtime analysis Fire rescue police. You offered a figure of about a half million dollars on a fire rescue set. We sharpened that point so further, and we can contribute about $600,000, actually.

Right. You could actually do eight, but you've got to give them the buffer so they're not coming back in front of us. That's correct.

And I'd like to go with that. And we had a similar exercise working with leadership of the Delray Beach Police Department, and that figure is about $800,000.

Thank you. I appreciate you taking that.

So $800,000 for police, $600,000 off on overtime for fire rescue. So that's $1.4 million there. In addition to some of the other considerations you discussed, that is where we are.

Thank you. I appreciate you taking that recommendation. So I've endorsed that.

I've met with all appropriate leadership, and I think we're all in alignment in those regards.

There you go, Mayor. I did my job.

Well, no, you did. I mean, you had two of the, I have these on my, that's great. The overtime was a real, I remember the same conversation. Commissioner Burns.

Yeah, well. The overtime was the only suggestions that I had, but my concern is that if we go with a rollback rate, is it?

No one's talking rollback. I would love to talk about rollback myself.

My understanding is we voted on the maximum rate and that if we don't get a supermajority, it goes to the rollback rate. Is that correct?

No, no, you can't do.

That's what the city attorney is saying, yes.

You can't do more than 10% of your prior year without a supermajority.

No, that's a different question. The law as of July 1st, 2026, ladies and gentlemen, in the case of Derry Beach, Florida, because there are five board members, it has to be a two-third vote. Two-thirds of five equals 3.6, which means four of you would have to be on the same page.

You're not allowed to round up. I think it's a supermajority.

It's a supermajority. Four out of five. Four out of five.

I'm not saying anything. You need the four. That's correct.

Right. And that's all we're here to offer. So ladies and gentlemen, why this exercise is especially important this evening is because it's an opportunity to offer that direction as we prepare for September 8th. We talked fairly robustly relative to adjustments and expenditures to take a look at that, and we'll be able to sharpen our pencils. I think we're halfway there already. based on what I just articulated in response to Commissioner Casale. Nevertheless, there needs to be a supermajority position with respect to military policy. And again, we've offered our recommendations thoroughly and eminently. And therefore, this is why we are where we are. But of course, there's merit to do what we can to do the best possible with with respect to fund balance. Let me also mention, going back to the July 21st, 2026 City Commission meeting in which we had our presentation from CBIS, we talked a little bit about the fund balance position being roughly 24.79%. As I recall, Mr. Dakowitz, it was somewhere in the neighborhood. So despite our maintaining a budget position of roughly 21% throughout the course of the year, we do what we can to identify efficiencies and administer financial practices such that we can strive to even have higher fund balance position, of which we were able to accomplish over the past couple years. And that was highlighted in the presentation, as I just mentioned, during the July 21st visit. So that's part of the rolling process as well. This is for budgeting purposes. However, to be able to demonstrate sound financial management practices in that regard to demonstrate a higher fund balance position from what was initially contemplated in the proposed budget process is a step in a meaningful direction as well. And that was highlighted by CBIS during that presentation. So that will be a continuous part of our effort and practice as we lead operations in the city.

Thank you.

I apologize, Vice Mayor Burns.

No, I'm going back to my original question. So we need a supermajority to get to okay, and if we don't have that, it goes to the rollback rate, correct?

No, it goes to the current. It goes to the rollback.

It would go to the rollback rate. So what needs to happen at this level is a discussion to yield four out of five of you all being on the same page with respect to fund balance policy, or excuse me, military policy, pardon me.

Okay, so knowing that if we don't come to a consensus on the rate, it goes to the rollback. So my concern is that, is that a sustainable under our financial circumstances that we have right now? And, you know, are we digging ourselves a bigger hole than we're already in? I mean, we're already saying that we're going to go 8.1 million for reserves at the suggested millage. If we go to the rollback, we're looking at a huger amount.

I can discuss those metrics if you like. That's correct. Commissioner Malika just commented, what would the rollback rate be? Absolutely. One, and how much revenue would be lost if the rollback rate were to be realized? The rollback rate would be 5.855. 5.855. Five. Another five. Another five. Yep. 5.8555.

You're making the assumption that there's no millage rate adopted because you don't have to adopt the 6.4. You can adopt the 6.2 or 6.1. That's correct. You can. That is correct. We're making the assumption that we can't come to agreement with any millage rate. And I do believe that there is some number out there that we will all – I mean –

That's correct, Mr. Mayor. So I'd like to continue to offer a response to Vice Mayor. That's all I was doing. But absolutely correct, Mr. Mayor. As long as they're for on the same accord with respect to a millage rate outcome, that's where we need to be. So again, the millage, the rollback rate would be 5.8555. That would impact revenue in excess of about $5 million, in excess of $5 million to the general fund.

Okay.

So to answer your question in terms of a deeper hole, as you eloquently put it, so to speak, that would be the case.

Right, yeah, yeah. And so, you know, my interest is just, you know, based on whatever to maintain an appropriate level of service that we have now. And, you know, okay, I'm good. I'm good. I'm done, Mayor.

Thank you so very much for your input. You're welcome.

I don't have a whole lot of I agree with the $35,000 vehicle that we probably don't need and of course with the overtime although they might need overtime but and and I don't know how much this cutback how much flexibility that allowed those departments or to fill in when needed. I also, I always think of the teen center as a waste of our money. I don't think it's very utilized. I don't know what the summer numbers look like. I don't know what any of the numbers look like. I just know it's not very used. Did you? How'd it go?

I didn't go very well.

Well, let's talk about that. We spent $473,000 on the teen center so that roughly 18 kids could use it at the cost of $35,000 a kid.

Weren't we talking about a Y or somebody coming in and taking over?

We're a number of people that have expressed an interest in trying to take it over, but I got nowhere with it. Thank you for bringing it up.

Sure. Actually, my office was paid a visit by leadership from YMCA not terribly long ago, months ago, earlier this year, and they have an interest in receiving resources from the city of Delray Beach, well and above and beyond. what our capacity would be, if that makes sense. So I don't think there was any interest once they got to that place.

So the 473, is that the staffing of it?

No.

It's the total cost. I mean, it's owned by the women's club. Women's club. And we rent it. We pay them rent. Not very much. And how much? We pay them rent. How much? We sub-release it from them. Oh, it's not. We don't pay them much.

OK. So the financial piece you just discussed, Ms. Mollica, Commissioner Mollica, pardon me, It's actually intertwined with other operations of Parks and Recreation. It's not solely allocated. Mr. Mital, I think I may have to secure your help in terms of explaining the specifics behind that since the question came up. But it's not all allocated specifically to the 18th Center, per se. So, Mr. Mital, I need you to help offer clarification in terms of how that actually works. And, oh, excuse me.

Sorry, I'm okay. Thank you. I need some water. Until the budget's done.

Yes, sir. So in any event, as well as the relationship with the Greater Derry Beach Women's Club, if you would, please.

Yes, good afternoon, Mayor and Commissioners. Sam Metot, Director of Parks and Recreation. Just a couple points to try to touch on a number of the things you just mentioned is that number is an all-encompassing number. That's your staff number as well as, you know, insurances and taxes like FICA and other things that are covered under staffing, as well as the resource needed to run the center itself, you know, normal routine stuff for the center, supplies and so forth. Just to remind everybody that part of that agreement is that the Women's Club hosts all of their meetings there at the center, as well as it's a skate park as well, and sometimes that gets lost when we look at participation numbers in a camp or summer program. So that operates each night and weekend as a full-on skate park as well. So they have teen programming for different demographics throughout the week where they do different things. One of the new things they've been starting is like podcasting and introducing teens to programs like that where they learn to use those type of programs. technologies and more modern settings.

So it's being utilized by how many students in that programming?

Each program's a different number, and that's what I was just about to touch on. One of the most challenging demographics in all of Parks and Recreation departments countrywide is your teen programming. It's when you get the least engagement from teens, when parents are no longer registering them and bringing them. And it is the most challenging place to get them. And you usually don't get major participation numbers again until they get more into their late 20s and 30s, where they're settling into programming back into their community. They tend to drift away in their teenage years, whether they're off to college or focused more on high school activities. But it does serve a real need for those that utilize it. And again, that participation number doesn't register those people that are using the facility for the skate park as well.

In addition to all of that, some staff actually...

Right, we didn't get into the staffing yet, but I was talking more to those participation. Each program is a different number. We usually average somewhere between 10 kids in a program, anywhere up to maybe 30 kids in a program.

And that's only in the afternoon or summers, right?

It's mostly afternoons and summers or whenever there's school breaks, right? Holiday dates or winter break, things like that, spring break. Those are when you get more programs.

Is it staffed during the day when there isn't any activity?

We have an overlap of staff. We have a daytime person that's a supervisor there on a regular shift from 8 in the morning until 5 at night, and then an evening shift that comes in midday and covers until the evening, overlaps into the nighttime hours. We then bring in part-time to cover in the evening as well for additional staff, and then weekends as well as more part-time staff. And then there's two full-time staff members at the scene center as well as a full-time maintenance person That's the morning shift the afternoon shift and then the full-time maintenance those three full-time employees and then the part-time staff around that now so what mr. Moore is speaking about is the full-time maintenance person assists us at multiple sites right so they help that maintenance person is more custodial than anything else they help us at Veterans Park as well as the teen center and anywhere else we might need them And then the part-time staff we can utilize at other locations as well. And then that other full-time position again where mr. Morris speaking is We cover certain shifts over at Catherine strong So we're offsetting some and where we don't have enough staff maybe to cover all the activity at Catherine strong They spend two days a week over at Catherine strong to cover and that's that's where he meant that it covers all

I'm great with staff bouncing to fill in, as long as... We've tried to cross-train and utilize that.

A couple years ago, we added Pickleball to Captain Strong, for example, and it really increased our demand. We went to earlier hours in the morning. So rather than hiring new staff, we've used staff to offset that, and that's where some of that comes into. Play is where we utilize them in other locations.

So that $473,000, we're using them elsewhere sometimes. Correct. So that money is going to cover some of our other events.

Correct. And one more thing I would add is not only do all of your staff help during all your special events. One of the challenging things about running an operation is if you only had one and, say, you only had the person come in for the evening and then you didn't have another person, any time they're sick or vacation is taken... or any kind of issue, you don't have a coverage. And that's one of the challenges. If you go down to just a single person running a building, whenever they're not there, you lose all your coverage. So I just caution that. To reduce it any more, you essentially can't run a functioning site very well.

I just say every time I go by it, there's nothing happening there. Maybe I'm not going by at the right time.

No, and listen, and I hear this about a lot of things within parks and recreation, and this is kind of a way I put it in perspective. So if I go to buy any one of my parks in the middle of the day on a Tuesday, they're mostly empty. All your sports fields are empty during the day. But if you go there at 6.30 p.m., you can't park.

It's hopping.

Right? And I use the same analogy at LA Fitness. If I go to LA Fitness at 3 o'clock in the afternoon, you can get on any treadmill you want. But if you go at 7 in the morning or 7 at night, you can't get on a treadmill. So that's kind of the analogy I use. But depending on the time you go, it's very busy. And depending on the time you go, it cannot be.

Okay, thank you. Of course. I see where you didn't have any luck last year.

And I'm not trying to be excited.

I'm happy to support you. If it's getting use and kids are benefiting from it, then I love it.

Look, the budget's not done yet, so we still have time to make any... I mean, we're not voting on millage tonight. That's next week, so we're going to be...

However, I am seeking some sense of consensus as to what we are to prepare for September 8th and September 22nd. And this discussion is productive, so we'll be prepared.

So far, we've only saved a couple million dollars. I'm just saying.

We saved a couple million dollars. I'm pretty proud of that. I am, too. And I have some thoughts and ideas. Just to Ms. Malika, you had said you want to make sure there's enough of a buffer with the overtime. I did actually... I sat down with Mr. Moore in finance, and I found the number kind of surprising since it had increased substantially from the past years. But I reached out to the chief, and that number will work for the fire. I didn't talk to the police, but our chief is shaking his head, and I think that's good.

I think the overtime was a- Thank you. And then some of the others that were I mean I go ahead and are you I think that's it, but I reserved the right to speak Inject good Commissioner market.

Yeah, you're out. I just want to declare that.

Sorry just before you get going. I'm all set.

Oh, yeah. Thanks Until you're not

I'll try to let you sit down, Sam. A couple of things on my end. First of all, I think the cuts that Commissioner Casale outlined are the right ones. I saw many of them myself when I was going through the budget. Those are where we should go. I think the challenge that we have sitting up here, and it was somewhat highlighted earlier, is two-thirds of our budget is police and fire, basically. And those are pretty fixed numbers, so it leaves us with about a third of the pie. That's left. So that's one of the challenge that we have and and I would say looking at the budgets myself they they appear very very tight to me and that's why the cuts that have been suggested and Have been discussed a little bit are relatively small when you use in my experience when you're using attrition as a way of saving and That means your budgets are darn tight. So it's not meaning you're eliminating people or you're eliminating events or you're cutting programs completely. We're not. We're basically, you know, as people leave our organization, we're going to deliberately go a little bit slow on hiring to save a couple of months of sour here and there. It's not a bad strategy, but It's a much harder one. As stated earlier, the city right now, we are behind on technology. I've had a chance to spend a lot of time with Jay recently. I think we're on a good path to getting that resolved, but we are behind, and that's causing us to have people band-aids. which we had in the corporate world for a very long time as well. Not good. You don't want them long term. But as technology comes along, we need to be at a level with technology and not racing behind. And AI is coming very soon as well. And we need to be in a position like every business and municipality. to be able to adapt to that and use that where we can. In many ways, I feel like we are victims of our success here. We are doing things pretty darn well, and we should not lose sight of that. we are attracting visitors like crazy we're winning awards like crazy um and it's driving our property values we all know that so let us not lose sight of that that's that is adding to the bottom line of all of our residents and full-time and partenheim residents so we are being victims of our our own success and by the way i would also throw in we're because of that success we are attracting growth and development we have we have big companies that are making proposals to us um to to come in and potentially add enhancements to our city that's great that means we're we're on target we're vibrant we're doing good um what what i'm fearful of is The next round of cuts will be ones that we're all going to feel. We could cut things like parades. The Christmas month-long event could be a Christmas one-week event. Events like the drone shows could go away. So I think we have to ask ourselves that hard question. Are we prepared to go backward as a city on stuff like that? I don't personally think it's a good idea, but some may. I am a fan of building up and holding our reserves. I've talked about this before, given the work I do in Washington. I am fearful that we're going to get walloped with a hurricane at some point and FEMA is not coming. We are going to be on our own and these reserves are going to be what is going to get our city through a potentially nasty period of time. So I think it's good that we have these reserves. And reserves aren't a bad thing. In fact, they're actually, Henry and I have laughed about this, reserves are actually a good thing. He makes money on his reserves. I mean, that money's being managed, and that income is being brought to the city. I mean, so these reserves are bringing cash to our city. So it is like having a savings account at home. It's not a bad thing. So, you know, I think we've got to be very careful with reserves. And lastly, just my opinion to put it on the table, given what we're facing in November with the issue that we're all aware of, I think holding the millage is the right thing to do. I believe if we don't do that and that bill ends up passing, we will find ourselves very vulnerable to some bad things. So those are my comments. Sorry I went a little long.

I agree with everything. I mean, it's interesting because my number of saving police was about 500, so you were 300 more than I thought we were going to be able to grab out of them. And I was also at 500 for fire, so we got another 400,000 added to the pot, which is always a good thing. I do think that we need to look at... uh whether we can't have additional savings in in police and fire in terms of number of personnel that we have because i'm seeing that i mean everyone i mean everybody says well you know it affects public safety i don't know if it does or it doesn't i know technology can help it i know that we're trying to do cameras i think we're doing very well with our cameras we have the best real time i mean our real-time crime unit is really It's so exceptional compared to what other people have. It just puts us way ahead of everybody. And I compliment the police department every day for the work that they do for that department because we're all safer as a result. You know, when we talk about how do you save money, and someone said, well, you can cut out the not-for-profits. I don't want to cut out the not-for-profits. We have to support the not-for-profits. But I think we need to follow... what the rules are as it relates to not-for-profits. Some of our not-for-profits have a lot of cash, but we still give them money. We have agreements with not-for-profits who we're not supposed to pay their salaries, but we're paying their salaries. This is an issue. So we have to go back and look at those contracts and say, well, why are we making these expenditures when the contract says we're not supposed to? No one wants to talk about the library, but our agreement with the library is they're supposed to pay their own salaries. They are not. We are paying them. We are paying substantially all of the salaries for the library. That's not the deal. That's not the agreement. So when you look at all this, now the library's going to call me tomorrow and say, I can't believe you raised that. Well, I did. That's what the contract says. I'm a lawyer. That's what the contract says. Not salaries. Maintenance, this, that, and the other thing, but not salaries. I had this discussion with Lynn the other day. I said, am I reading this wrong? She said, well, no, you're not. There are a lot of ways that we can save money for the taxpayers. And I don't think we're sharpening our pencils enough to do that. You know, I personally, and I've made this point several times, you know, I won't get my role back. But, you know, I mean, I think we should hold the millage. We are the only, if you go to the Delray Beach tax bill, everyone got their millage. Every single person is either at the same they were last year or lower, except one line item, city of Delray Beach. Every single one across the county is this way, except Delray Beach. This is why I did the analysis before I said it. They're saying, oh, well, it's because we had that rollback rate. We have to make it. No, because we eclipsed them all in terms of the increase in the taxable base of our city by a decent measurable standard. It was time. We were increasing tax. We should have been, instead of lowering it to 1 mil each time, we probably should have been lowering it to 2 mils or 3 mils to keep up with where that really should have been. But we were. So when we do a catch-up, it makes it look like, oh, well, you know, no. So I am, I mean, I'm very happy with Commissioner Casale's analysis and Commissioner Marker's analysis and Commissioner Byrne's analysis, Commissioner Malka's analysis. You know, we picked up a couple of million bucks, which is great. It's something, it's something. About 2.5.

Huh? About 2.5, right? 1.6 and then the, you know. 1.4.

You know, and I mean, we can argue, we each can have a different view of reserves, and I mean, Mr. Dockowitz and I are probably closer to what we think that number is than Commissioner Cassal, but the point is the savings of the actual operating costs is going to be relevant to all of us because i mean look i am very confident that the city manager and mr dakowitz and the department heads you know overestimate their costs and underestimate their revenues which is which is great because their costs come in less and the revenues come in higher so we're always ended up which has been the experience the past couple years and that's sound budgeting that's sound budget yes it is i believe that we have sound budgeting which is why the rating agencies love us because we do actually have sound budgeting so But I just want to try to find more ways. Well, already we are saving money from where we were when we walked in. Right, a lot. And I just think we can sharpen it a little more and see if I can do a little better. We can do a little better. And that's all I'm trying to do.

Mr. Mayor and ladies and gentlemen, if I may please. At this juncture, I'd like to serve as your facilitator slash advisor. So I'd like to fully endorse. I've already endorsed and prepared for half of the identified cost adjustments based on the analysis of overtime on police and fire. Leadership in both departments are comfortable in that regard. We're squared away in that regard. in addition to some of the other observations that haven't been offered this evening, I think we can endorse and support that. So as we prepare for September 8th, we will have a presentation to reflect that as a start.

But I'm saying we also, some of the other things mentioned that I want to make sure you include is, and it was mentioned by Mr. Dock, which is, you know, a delay in the start of some of the projects. You know, there's things we can push back. Which projects, though? We could talk about, you know, delay in acquisitions of new vehicles. There's things we can look at.

Right, that was in my leasing program. If you go back 20%, you save money.

And all of these things are...

Understood. If I may, sir, please. Thank you. So my interest is to take all that into account. I think we have the ability to proceed in that regard. The interest is to productively prepare for September 8th and September 22nd, as I've outlined in my introductory comments. Wonderful feedback by all of you, ladies and gentlemen. For that, I'm grateful. Thank you. Because much of it aligns with some of what we've been thinking as we were preparing for today, a lot of police and firefighters. over time budget adjustment considerations based on calculations, analysis, et cetera. So we have that there in addition to some of the other thoughts and observations. We are prepared. We heard all of it for the record. We are prepared to offer direction to that effect. The question therefore remains, what would the comfort level be in terms of millage rate position? I've heard all of you speak a little bit about that, but the fact of the matter is we do need to prepare for September 8th. So an opportunity to strike a balance in terms of what the millage rate would be based on the identified savings opportunities or straight acceptance of the recommendation by four of you all in terms of the 6.4371, as well as to update the reserve, the fund balance position based on the savings having been identified. I would like to have a productive discussion to that effect. so that we can come back with specific formal recommendations, first reading a week from today, final reading two weeks thereafter. So if we can talk about that, please. We need everybody to be squared away.

From my standpoint, I am not for keeping the same millage rate. I want to reduce the millage rate. by how much that number i don't know yet um i'd like to keep it where it is if you want to know the truth we can discuss you know the whole con i mean i happen to think that we were over reserved everyone talks about reserves but yeah but we're not like a pizza store that when a storm comes all of a sudden we're out of money i mean the taxes still keep continuing to accrue and and every single time in the prior i've gone through several times uh with this it's not like I mean, you redeploy. The city redeploys its assets. Parks and Rec gets into clean up. All these people get into clean up. I mean, it's not like we are shut down. I understand there's a worry about whether there's enough money, but we still get our tax revenue. Our money doesn't dry up. It's not like a pizza store where we need to have business interruption insurance. We still have our revenues. We still have our taxes. So, I mean, and the standard that they use up there and that thing that you talked about, whatever that accounting board.

GFOA.

GFOA, which talks about two months. You know, we're over two months. That's fine. I think two months actually works fine. I'm actually looking for a meaningful reduction in the millage rate. Because we always will have the ability, we can always raise our reserve. We're at the low end. When I met with the League of Cities some years back, they talked about you're already in the low end because we're allowed, if we had to, we could go to 10 mills and tax everybody and pay for all our debts. They would hate us.

Not anymore.

We can no longer do that. If it doesn't pass, correct. But we have the ability to raise money when we need to. So let's talk about trying to Just because my property values go up doesn't mean I should be giving all that benefit to the city. So I'm just trying to find a way to, I don't want to do the 6.4. I mean, I can't get my rollback, but, you know, unless you want to give me my rollback, I'd love my rollback.

Well, I would support holding the line where we are. I would support that. That's what I want to do.

I would support that.

If I may, I'll need to think about that. But this GFOA two months is the baseline starting point. You build from there depending on if you're a coastal community or what have you. Our auditor did a report for us on – the reserves and the suggested balance based on the surrounding communities and all the factors that we should consider as a city ourself was 21%. That was just given us in an audit report. I don't care what they're doing. But you're talking about one community. The study presented a bunch of coastal communities. That's an expert study done for us at request That's adjusted 21%. And I think that's a good place to be. And that's where we should be aiming for. Is it going to go lower occasionally? Yes. But let's not drop it down to balance our budget and then tell the residents we're doing them a favor because we're not long term. And I would just say that I don't think we should be looking at necessarily reducing our police force. I take my puppy out and walk at night. It's a very different environment in the downtown at night. We are unique in that we need excessive policing in our downtown in the evenings. And if you take away from our police force, then whatever is downtown is not going to be policing our neighborhoods anymore. And safety is in every question you ask the residents. What's their primary concern? Safety. And right now, we're in a great place. Let's keep it going. I love it. Thank you, Chief.

So we can't have both, guys. We can't keep our reserves and then keep the original millage. And I think that when we first got the presentation about the original or last year's millage versus this new increased one, my understanding is that the deficit was $5 million. But then you just said if we go back to the rollback rate, it's also $5 million.

That's a loss of $5 million plus.

I mean, but how about – I kind of remember a presentation – with our budget with the last year's millage rate that our deficit was also 5 million. Is that accurate or am I hallucinating?

No, you are correct. However, there are a couple of different calculations because we take under consideration what the community redevelopment agency impacts are.

Got it. Yeah, because that... Wasn't a wash, right?

So that's that adverse impact in that regard as well. Yes, ma'am Yes, ma'am. So speaking in general without going into specific calculations, but that's the distinction And if I may ladies and gentlemen I have I have a couple recommendations to strike a balance that I like for everybody to consider I'm Commissioner Malik any other further observations or questions? I

No, just like the obvious mutually exclusive goals.

I'm sorry, Mr. Mayor. I'm asking to be facilitated.

You're looking for direction, and I think we're trying to give you direction.

And I have a couple thoughts, please. I'm going to try.

Mr. Marker. Mr. Marker.

So a couple of you all talked about a lower military position from what we were recommended. So Of course, there's an interest to do what we can to tweak the fund balance position on a budget basis. Given what's been accomplished in terms of public safety overtime, 1.4, that would provide an opportunity to

I gave you the 1.6 originally in that whole list of things. I gave you 1.6 and then the overtime is 1.4. That's $3 million.

I got it. I got it. I got it. If I may, Commissioner? I'm coming. The interest is to strike a balance in terms of tweaking the fund balance position a bit while coming down on our initial millage rate recommendation. Based on all the feedback, based on honor synergy and the plea... for four of you to support this consideration. Given the public safety side of 1.4, we could proceed with the millage rate position instead of the 6.4371 to maybe 6.3501. That would be the calculation. So a millage rate recommendation of 6.3501 and the aggregate savings as I'm sorry.

What's the debt in that part and what's the where?

How much of that millage is the debt?

The debt millage rate is the same. That doesn't change. That's the total? Yes. So the operating millage I'm referring to, instead of the 6.

I'm just making sure it's not a combination of the two. You're just talking about operating millage.

Operating because the debt is flat. That's done. That's not to change until it's done. So as opposed to 6.3, excuse me, as opposed to 6.4371, We offer a formal recommendation next week of 6.3501 based on the public safety adjustments number one. The remaining savings haven't been identified. We tweaked that and that would go towards supporting a better fund balance position. That's what I would sincerely like to recommend. You have the ability to demonstrate that, hey, we reduced the millage rate position from what you tentatively adopted during the July 21st meeting by way of this workshop discussion, as well as we'll be able to calculate for you what the new fund balance position will be once we factor those savings. If I can have consensus to proceed to that effect, I will come back to you all. September 8th, September 22nd, you have a lower millage position from what we initially recommended to our heart's content, as well as the ability to tweak the fund balance position. It's a great scenario. I would ask for you all's support in that regard, and we will sharpen our pencils over the next few days to prepare for next week's agenda transmittal.

please i'm just all i'm going to say is that you keep referring back to the fund balance i'm very happy with the fund balance that mr dockwood's you know the percentage that he came up with so if i can i would really would like to drop them all into savings for what people are paying out of their pocket because that is what they feel that is what you know as the as they're paying increased uh insurance every everything everything everything about their daily lives It's gotten more expensive.

What could it be down to without the fund balance, with this fund balance of 17 or 18%?

I'd like to look at it, you know, if we wanted to keep Mr. Dakowitz's recommended fund balance, whether our financial directors...

I'd like to talk about that for a second, please. Like Mr. Dakowitz, I've also spent time with the... external professionals, the rating agencies, and so forth for the past couple years, and they endorse us having as high of a fund balance as we possibly can get it. If we were to be at 18%, 19%, 20%, somewhere in that neighborhood is what we're working to accomplish based on the recommendation or suggestion I just offered, that would be of immense help. So again, my interest is to strike that balance because

we are on the same court with respect to what that should be and that's the feedback coming back up externally mr moore may i if you go back and look at the bond rating letters when we got the bonds one of the things that they highlighted in those letters was that our reserve level was high enough to justify that bond rating and i remember what you remember what the the i'm going to put you on the spot here but do you remember

When the city projected, when they gave the information to the bond agencies, what they said that the reserves were going to be?

30%.

No, no, no, no, no, no, no. We came in with, what was it, a 10%, 12%? What was it? I'm trying to remember what the bond thing was. It wasn't. I'd have to go back and find the letter.

I'll find the letter.

I have the letter. I mean, I was there kind of when we did it.

It wasn't anywhere near 18.

I'm just going to tell you that. Well, we could argue that point.

I'll grab my computer right now. Let's work on one at a time.

Let's work on the millage. Let's get our millage determined first. I'm asking. Let's figure out how much we can save. I made a recommendation separate from what we did. You made 6.3501, which is a good start. But I think I'd like to see where we can do.

Here's the problem. May I just one second, Judy? Sure. If we were just going to have a regular calendar year and there was no consideration of what is happening at the state level, then I would say to you, we're in a great position today. Let's kick it down a little. But we are facing unprecedented uncertainty, and I think it's irresponsible Just this small tweaking, we should be celebrating. Going below that at this point is not a good idea. And here's what we can do. Somehow we can figure it out. If we can find savings, if this doesn't go through, maybe we go back and we reassess some of the other billing that the residents are getting somehow. I don't know if that's possible. But I would say to you, We have no idea what's going to happen, and we need to be prepared for the worst. The worst is a loss of $21 million in the first year and $42 million in the second year.

Maybe next year. Yes. I mean, I've absolutely, you know, I've spoken about this thing. Right. So let's be fiscally responsible to our taxpayers. Look, as I said, I'm just trying to tweak it as best I can. And we are... We're getting there.

We're not suggesting going below the 18%. No, we're not.

No, it's probably going to be higher than that. I have two questions, please. I'm sorry?

I have two questions. None of it's going to lower the millage or the reserves. My questions are, Mr. Dockwood, you mentioned that we're better prepared at a higher millage rate should the November thing happen. Why?

Is there only a certain amount? Because there's a calculation in the new bill that limits your increases to your millage rate, and they're using this coming year's millage rate as the base.

What is that limited to? I don't know.

You can't do more than 10%.

10%? Okay, got it.

Without a referendum, right? Right.

It needs to be an anonymous decision of the commission to go above that.

We've never really done it. We haven't done a 10% increase. And I don't want to.

My second question, unrelated to our own millage, does the library have any ability? I thought they did have an ability that they could, in fact, tax a certain millage. Do they have that ability?

They would actually become part of, my understanding is that they would become of the Palm Beach County system. They have a separate millage rate. Derry Beach residents do not have that separate millage rate because they have their own separate library.

The millage rate tied to a library is .5411.

The Palm Beach County Library millage.

I don't know what .5411 translates into dollars. You could tell me that. Probably you'd have to look it up. So I guess my point is. We could take that off our payroll.

And our donation to them makes good sense then. Just saying.

No, I'm not making that a judgment, whether it's a good or bad thing. There may be a time when we have to, at our own operating budget, be able to have more money on our own operating budget. And under the statute, we are allowed to let the library essentially be paid for by the county, which also does include salaries. Their .5411 includes payment of salaries and things such as that for the library personnel. That's what they do. But it would become part of the Palm Beach County Library.

So aside from being part of the county, they don't have any ability to? Yeah, you're correct. Okay, got it. Thank you. I love having our own library.

Okay, here we are. The bond rating letter says our very strong reserves, which have averaged more than 30% of expenses over the past three years. Right, so now we're at 18.

When we made the application for the bond rating, that's the letter you want to look at, what the base number was.

No, I'm looking at their letter that they gave when they gave us the rating and their explanation as to why. Both Moody and S&P said it was because our hefty reserves at 30%. That's two years later, we're at 18. So, come on.

And recent discussions with analysts in that, ladies and gentlemen, they were somewhat critical of the fact that the...

Didn't our rating drop?

No, because they were critical of the city in a way because of our impact to revenue, going back to military reductions over the past couple years and so forth. That was the basis for it. It wasn't because of... going from 30% to 20% or 25%, whatever the case may be. I understand, I'm just clarifying. However, they were critical of the fact that we positioned ourselves to adversely impact the revenue outcome, a la the millage rate reductions haven't been experienced. That was communicated clearly in my engagements with Moody's investor service and S&P global ratings in particular, because in 2025, last year, I provided you all with updates via the information letter reports in terms of what the outcomes were. And I'm really grateful professionally that we did quite well in terms of the military, excuse me, in terms of the the rating positions we've been able to enjoy. But that was the specific reasoning, ladies and gentlemen, because there was an adverse impact to the revenue, the ability to collect revenue as a result of reducing millage rates, because as I stated several times now, Most other municipalities maintain a healthy, appropriate millage rate and enjoy revenue increases as a result of maintaining a stable millage rate as opposed to what's been the experience in Delray Beach. That was a thorough discussion we've had in our experiences in the last recent time. It was.

I'm sure in Mr. Markert's experience, certainly in mine in doing finance, the auditors, you cannot give them enough reserves. They just love having reserves.

Yeah, well, they do it.

We went from 30% in 2020.

That was from 2024 to 18. That was the battle constantly with the examiners. Well, you've got to do this. Okay, fine.

Ladies and gentlemen.

But those reserves, we can't forget this. Those reserves are not bad things. I'm not saying they're bad. They're throwing off 7%, 8% interest.

I suggest that the auditors don't care what our reserves are. They add up the numbers and present financial statements. The bond rating agencies are protecting the bondholders who are lending us money, hundreds of millions of dollars. And when we have larger reserves, that gives them a level of comfort for those investors, which gives them a higher rating, and we would then be able to borrow money at a lower rate. If we deplete our reserves and at the same time cut our millage rate, I think if the referendum passes, I know you don't think it's going to do, but... I like to prepare for the worst if that passes. So we're going to have a hit of revenue right off the top, and we're going to have a limit as to what we can cut because we're not allowed to cut police and fire, and we're going to have a problem because we can't raise our military. Then what do you do? You're left with no optionality.

One of the things we're trying to do is retain our flexibility. I acknowledge that we are in a quagmire at this time, a political quagmire at this point. We are. And I, look, you may be right. It's not political, it's financial. I know I stand alone in thinking it's not going to pass.

They won't loan us money.

But I'm just.

I have to plan that it will pass.

I know. And try to keep our flexibility.

We all do. So if we cut our millage rate, we are not only going to return and tell the taxpayers, look, you don't have to pay as much of an increase as the city manager's recommended budget. But by the way, it's going to hit you twice because we can't catch up.

Listen, we've just got to make a decision here. If you want to think on it, my feeling is we found savings. I almost think because we don't know what we're doing, we stay where we're at and we build our reserves up. And if somehow we have large savings at the end, We figure out a way to filter it if this doesn't go through back to our taxpayers, either some reduction on their utilities or something like that. There's ways we can do this, but I think we're very irresponsible at this point to not consider the tremendous loss of finances that we could see in the very near future for our taxpayers.

I absolutely acknowledge it. It's just we're differing as to how much money we need to operate. That's where I'm at, Mr. Moore, so you understand.

So what that tells me is that you're at 6.4371.

Yes.

Or not?

Well, or the 6.4660. That includes the... Waiting for my colleagues. Yes, the 6.4371.

I am certainly back at this.

I'm certainly... And I'll offer the suggestion, ladies and gentlemen, to try to take under consideration. So, Ms. Burns? No, I'm just waiting for your suggestion. That's all. And that was the suggestion I made earlier about... 6.4371.

6.3501. That one? 6.3501.

6.3571. 6.3501. I'm at the current. I'm not changing.

Well, can I just ask you, what do you want to cut?

I don't want to be disrespectful, Mayor, but how do you want to pay for all the things you voted for that we have to pay for in the upcoming fiscal year?

You voted for the police contract.

I didn't vote for it.

That's his job.

No, it is your job. You're voting for these things.

I just think we've had a huge...

Over $10 million of the increase is just for our employees at the current level.

That is the cost of their- Well, we can argue about the current level then.

So then make suggestions. You can't sit up here and keep on saying you want it lower. If you don't have suggestions, you keep voting for these raises. You voted for all the increases. You voted for the police contract, which, as we noticed in the CRA, was a 23% increase to the budget, staying at the same level of employees.

I voted against the police contract.

No, you didn't. You voted for it, Mr. No, go back and watch.

Oh, no, no. No, no, no, you voted for it. The ministerial part after was approved by the commission I voted for. Oh, yes. Stop. Please don't make the nuance.

Ladies and gentlemen.

You voted for it.

Ladies and gentlemen.

Can't keep voting for the things that cost us money and then not pay for them up here.

Ladies and gentlemen, as this is a workshop, free flow discussion, so that's why I'm inserting myself yet again. More or less. I made what I think is a cogent, reasonable suggestion in terms of a millage rate position, in terms of our abilities to update the fund balances as a result. So, frankly, I'd like to hear. I've heard from Commissioner Cosell, Commissioner Markert, Commissioner Mollica, Commissioner Burns, any thoughts regarding what's been suggested?

I just have one. I think, and I know this is a workshop, and we're going to come back in a week or so on this. In a week. If there are cuts that we're contemplating, I want to have a reckoning of what those cuts are.

We're going to summarize that for you as part of next week's presentation.

I know you can only go down to a certain level, but I want to see the cuts that are sawing through the bone. And your department heads are going to know what those are.

So based on all the feedback we've received this evening, we'll offer an updated presentation to show what that looks like and what the numerical specifics will be towards what policy consideration on the millage rate on the fund balance position so that's part of what we'll come back with we have work to do beginning tomorrow once we conclude this exercise but again i would love to have your consensus on the millage rate and that will open the door to all the rest please so

Commissioner Cassell, are you still at the 6.437? Yes.

Yes. Yeah. I think it's responsible. And I think we have to consider that possibility. You're at the 6.3501?

I'm actually at the current one of 6.1 something. But, I mean, I'm willing to – to look at a higher number as we try to address the cost. So I came into this with trying to make sure that we could reduce what was being proposed. We've already got a $2 million give or take reduction.

And I made a suggestion to get there.

Which is a great start. I mean, do I think that there's more that we can tweak during this? I mean, at this point, I think

Mayor, I've gone through this document four times line by line.

I appreciate your comments, but I'd like to have mine too. So you've asked me for my view. That's my view. I mean, right now, I'm not at the 6.4. I'm closer to the 6.3. So I'm going to see whether we can tweak it a little further. But I think that we should proceed based on the savings that have been identified tonight. And you should come back. I think Commissioner Markert is correct. We'd like to see it on paper, see what the true impact is so that we can look at all the numbers ourselves. Because we don't have them in front of us, so we're all talking hypothetically based on what

So what numbers are we giving him to give us numbers on?

Well, I mean, I think he's going to come back. He's going to propose a budget of 6.3501. Okay. Although I'm going to try to look farther to see if I can dig deeper to see if we can get any other savings that have not been identified tonight. That's all I'm saying.

And I said earlier that I'm okay with holding where we are. As Commissioner Cassell said, we have to pay the bill, so I'm willing to go with the 6.350. One. Yes, I'm willing to go there.

The only other thing I'd throw in is it's okay if we come in under budget, by the way. I always loved that when I was running big companies. We've done that a lot. Just because we've got a budget of X doesn't mean we've got to spend it. Along the way, if we can find savings and throw those as a surplus at the bottom line.

And we've done that.

Henry will start smiling again. No, we've done a good job doing that. We've done that.

That was part of the July 21st presentation about CBIS.

That's part of the practice. Several departments did that, so yeah. That's correct. That's happening.

Okay.

Are we good? Are we done? May I summarize then, based on what I'm hearing?

To come back with a military position of 6.3501, what the adjustments are in that regard, and what the fund balance position will be because it will actually come up a bit higher based on the feedback relative to adjustments having been offered this evening. Some coming from us, coming from you all, and we'll provide a budget presentation during the September 8th meeting. So if I could have consensus to proceed along those lines, would that be fair? I think it is.

I'm gonna say that I'm happy with the understand analysis that was done by the by the by our finance director and I'd like to dedicate the reductions to saving saving the taxpayers money otherwise I

Are we?

Yes. Otherwise, we're fine. Come back for something.

OK. Everybody, Mr. Marker, Ms. Mollica, Ms. Burns, and Mayor said yes. And we understand Cassell, so we will go from there.

Yeah. I like it. Thank you. Wait, before we close, let's thank the chief for this shirt. I'm honored. I'll be honored to wear it to the gym.

Don't we all get one?

Yes, it's in your cubby. Wait a minute, what's going on here? You have to check your mail. You all have a shirt.

We had to cut the t-shirts. Sorry, I haven't been in the office.

Yes. Can't wait to wear it.