Town Council - Regular Meeting

Good evening. The time is now 6.01. I'm a minute late. Regrets. And I call to order the Town Council workshop of Thursday, June 18th. We have roll call, please.

Mayor Koretsky.

Here.

Councilor Delaney.

Here.

Councilor Geisinger.

Here.

Councilor Sundstrom. Here. Town Manager Kitzerell.

Here.

Are there any citizen comments?

No, sir.

Seeing none, move on to the one agenda item, a discussion of the proposed operating budget. Turn it over to staff.

Good evening, Mayor and Council. Scott Reynolds, CFO for the Town of Jupiter. This evening, we are here to discuss the proposed operating budget for fiscal year 2027. So one thing, just a matter of housekeeping, just to make sure that the council is aware, we will, with the property reform discussion that's been happening, I just wanted to remind you that we will be having a, scheduling a special workshop to discuss that very item in July, maybe early August. So that is coming. I know that'll probably be part of all the discussions surrounding the budget, but we do plan on having a special workshop just for that one item. So I wanted to make sure that everybody's aware of that. So with the highlights of the FY27 budget and some of the assumptions that went into it, again, here in June, we're still early in the process. We're still receiving estimates coming in from the state. We're waiting on the property appraiser to release their July 1 estimates for the taxable values. So this is still a living, working document. I want to make sure everybody's aware of that. But just we'll jump right in. So continuing to structure the budget and organize to live within our means. The town's always been very lean. We're all aware of that. We live it every day and making sure that we're good stewards of the public's funds. We're supporting the first year of fire operations with a significantly lower replacement millage rate that's being proposed. Also, we're not proposing indexing of water or stormwater within the budget for next year. Investing in public safety, we've all been talking about that over the last three years. We're set to go live October 1, 2026 with Jupiter Fire Rescue. Also, this budget continues to invest in town employees to attract and retain the best and brightest, trying to be competitive in the area market. And I think we've been very successful in doing that over the last few years. And this budget reflects that we would like to continue that trend, meaning into continuing to achieve service levels to meet the needs of the community, regards into relating to public safety, public works, public information, infrastructure, maintenance, and focusing on organizational enhancements and improvements for operational efficiency by leveraging technology. We can give you some actual examples of that if you wish. We've been very successful in leveraging technology throughout the organization. Overall expenditures reflecting investments in fire and police services, community improvement projects, and infrastructure enhancement. So one of the things that we wanted to highlight here just for the reason that we actually started the Jupiter Fire Rescue. We're in the last quarter here going in of a three-year-long process of implementing the Jupiter Fire Rescue. But just to go back prior to the council making the decision to proceed forward, the original ask was for the county-wide millage that everybody else pays if they contract with Jupiter Fire Rescue. the millage rate of 3.4581. If we calculated it going into the values that we've estimated for FY27, that'd be a $64 million cost to the taxpayer. So we wanted to reflect that here and just remind everybody why we even started the whole process.

Can I just want to add to that? And I add this just for the benefit of the two council members that were not involved on that, Councilor Geisinger and Vice Mayor, who's not here. And so, you know, as we were trying to negotiate a contract, and there was two members of the five that were fine with going full millage rate. So we negotiated, there's a timeline for this. I'm just saying approximate. But we negotiated for an entire year where they were trying to get the third vote and to where they decided to go ahead and agree to something different. So just everybody really needs to understand. And I'm not talking to my colleagues that were there. I say this for the public and the newer members. This is real. And begrudgingly, they agreed to something lower. But even at that, as I spoke the other night, they had built in adders that were going to hit us. But I just want to make sure everyone understands this is real. And it was very clear to us that this was going to be the last contract that we were going to proceed. And it took us a year to get there with anything less than full millage. I asked my two colleagues that were there. Is that correct?

Yes, it's a great point.

100% correct.

100%.

Okay.

Great point.

So thank you Mayor for the clarification because it was initially a very difficult discussion to have and then like you stated we ultimately did wind up with a contract We saw that the other night when we talked about the non-avalorant assessment. Even with their estimate of the $35 million, we have the $10 million estimated savings going into $27 million. But ultimately, the real reason we started talking about this was the countywide millage rate that was trying to be imposed on us, which you can see there would be $64 million based on the taxable value estimate that we have.

And I had implied this on Tuesday, but just for the public. So Palm Beach County has purchased a piece of property in Palm Beach country estates. We knew they intended to build a fire station and they had built into our contract that we're going to be paying for it based on a number of Jupiter service calls from that station in a year one in service. So we knew quite frankly, we're gonna be paying for 80% of the station in the contract. Well, we might as well build one of our own, and that's what we did, but I just wanted to emphasize that. I'm sorry, I just want to, you know, for the public, we're hearing people suggest things, and I just want to continue all of us to correct the record. I know you know it. I'm not speaking to you, Mr. Reynolds. You lived through it.

Well, thank you, Mayor. Continuing on with the budgetary highlights and assumptions, one of the main focuses is the Avalorum taxes, early Avalorum taxable values, so we're seeing an anticipated increase growth of 5.99%. Again, what I stated earlier, we're still waiting on the property appraisers to release their July 1 estimate. We had originally thought it was going to be around 6%. We're still very close. That was the estimates that's in our cash flow. Right now, we're sitting at a 5.99%. I think when we get the July 1 estimate, I think it's actually going to be around 6%, maybe a little bit more. They always try to be conservative early on. We're estimating no General fund operating millage increase for the 2.3894. Expected gross increase in the general fund operating at $2.3 million for FY27. The gross amount excludes the CRA tax allocation. Distribution of the ad valorem between community investment program and the general fund operating at an 85-15 split. anticipated JFRD operating millage of 1.2023 will fund 21.6 million, replacing the county's fire MSTU being charged on the tax bill. Now, one thing I want to point out, and this was discussed on Tuesday, those two numbers will be rolled up into one number, and we'll discuss that as we actually get into the millage discussion. No indexing of water or stormwater. being projected for FY27. The building permit revenues remain somewhat static. There is a slight increase there. Fire non-Avalorum assessment to fund the Jupiter debt, $2.1 million after discounts, and I can talk about the discounts if you like. EMS transport revenue estimated at $1.5 million.

Just one item, if I may, to add again for the benefit of my colleagues and the public. So the 85-15 split has been used for decades, and therein it somewhat worked for decades. There were times in difficult, when revenues really declined in some bad times when we adjusted that. But I say that, so while that's an adjustment, I more wanted to say that traditionally, based on the number of improvement projects the public asked for, It has somewhat worked for us, 85-15, but it's a lever that we have used before.

We have. We had during the recession, the housing recession, we did throttle back on that. And it's a tool to be used, and especially during recessionary periods.

And I wasn't suggesting in this year we do it. I just wanted to make sure as we're looking forward, everybody knows the tools that we have already deployed.

So this slide here, we talk about it every year, the values and how it's affecting each of the funds and what the historical valuation looks like. And you can see the peaks and valleys. And to hit home on what the mayor was even hinting to is that you have these peaks and valleys that occur with the taxable values. You can see there in 23 and 24, we had some exponential growth during COVID or shortly thereafter. And then there's been the steady decline back to what considered to be somewhat of a normal pace for the town of Jupiter. But jumping right back into the slide, early estimates indicate a $1.1 billion valuation increase for the 5.99. We're still waiting for the July 1st. The overall estimated average tax revenue increase for all funds, including the CRA and first-year JFRD, is just over $24 billion. over the previous year, bringing the total to just over $67 million. You can see how it gets broken down to each of the operating funds, $36.5 million in the general fund operating, or a $1.9 million increase over FY26. The CIP, we talked about the 85-15 split. $6.4 million or $350,000 increase over FY26. The CRA, $2.1 million or an $891,000 increase. They are seeing the benefit of the increase in the millage rate that's being discussed due to JFRD. And then JFRD at $21.6 million, which will be the first year of the operating contract. The total millage for the town, I just want to reemphasize this, those millages are rolled up. They'll see it on their tax bill. The citizens will be 3.5917. That's based on these early estimates. That most likely will change a little bit as we receive our new values. So looking forward with the increase in the millage, we always look to see how we compare with others in the jurisdiction. Even with that increase for the JFRD, you can still see here that jurisdictions that use Palm Beach County Fire, that contract, were number one on the list as far as the lowest. Municipalities that have their own fire department were at number four. I do anticipate that some municipalities will be adjusting their millage, but we'll see. But right now, as it stands, based on what was reported, At the end of fiscal year 25, we're at number four. And then municipalities that have their own fire and use non-Avalorum assessment to help augment their Avalorum, we're still, we're number four on that list, or actually the lowest. So the revenue assumptions, I like to point this out. We talk about this every year. We're still waiting on the state. I think they've just started to do their state revenue conferences. They started late. Nothing unusual. We are anticipating the estimates to start coming in in July. They've been coming in later and later every year. I hope to get them early, but I can't rush the state. But overall, increase in the general fund revenues, including Avalorum taxes of $4.4 million. excluding reserve balances when you look at the summary sheets, slight increase in FD&L utility services tax, interest earnings. We've talked about interest. It's kind of a double-edged sword. When the interest is high, primarily due to inflation, we're going to see larger amounts or stable stability in the interest earnings. When the interest rates are low, it's good for borrowing, which we're going to be talking about later in the summer. Continuing to watch revenue forecasts, including state-shared sales tax, interest earning, and projected reductions in water surcharge fee due to statutory changes. You all, on Tuesday, approved a water rate study for the water. There's been some statutory changes in which the surcharge for outside city residents is projected to go away next July. So we've lost a quarter of our estimated surcharge for next year. We usually bring in about $1.4 million in surcharge revenue into the general fund, so we've lost about a quarter of that, but the study should be able to replace some of that.

Can I just ask a question about that? Sure. Weren't the rules and what it could be used for changing? Where was the surcharge funds going before?

They were coming into the general fund.

Right. and now they're stating that they have to be rolled into the into the utility rate right right so i just want to make sure everybody understands what he was just saying here and i just had the benefit he had explained it to me well i know you already heard it but in case you hadn't so this is another one of those uh changes that our friends in the legislature did is so we used to use this for like we all know that our parks 50% are outside of the town. So we were able to use this surcharge, you know, to fund those kind of things. There's one mechanism to collect. Now, even though it can continue, and there's a study being done, and there's a cost to the water utility, so there's no doubt that that's valid. But I'm just suggesting, so where we look at this as a loss, the real loss I look at is is it's going to go away next year. And therein, we really got hit with a $1.4 million hit. We're only seeing a quarter of it, but it's never going to come back to the general fund. Thank you, legislators. Go ahead. I just want to make sure we all understand.

I'd like to add one more thing to that, too. Town residents pay the 6% utility fee for water. that will not apply to unincorporated Palm Beach County residents. So town residents could potentially be paying more for water than what unincorporated areas do until we get through the study. Is that correct?

That is correct. That's the point. That's the other point that when we read the legislation is that now you're going to have a disparity between inside and outside city residents or rate payers, I'm sorry, that you would have outside city users that could be paying less than inside city residents. Now, The residents or the taxpayer of the town is the stakeholder in the utility. They're on the hook for the utility. They are the stakeholder of the utility, which that would never happen in our circumstance with our utility, but some jurisdictions have financial problems. And if that were to occur, who's really on the hook for the solvency of the utility? It's the taxpayer, not the outside city residents. And that was the whole point years ago when they implemented the surcharge or the availability was to level the playing field of responsibility for that utility. And now they're taking it away from them, like the mayor said, and then there could be some disparity. But hence, we're going to make sure that when we do the study that that is recaptured.

But it won't be recaptured ever for general funds.

For the general fund, correct.

So that's a significant loss. And I just can't overemphasize that. So I'm already knowing we're in the hole, even if the other referendum doesn't pass. And it's really kind of disappointing the legislatures don't check with us before they really... And there's a small group of municipalities that are impacted by this, the county sure isn't right. And a lot of municipalities don't have, you know, and therefore, and only the big ones like the gardens and Boca and Wellington and Jupiter are the ones that, you know, cover parks and recs for unincorporated areas. So, you know, this hits us more than it hits anybody else. But go ahead, I just think I asked one more question.

So that you said three months, July, August, September, so that 25% of the year has been removed from the water fund for next year.

Well, it's been removed from the general fund and not made up anywhere else because we haven't went through the study yet. That'll be for the FY28. Or earlier if we can enact the rates earlier.

Well, and that's your goal. Your goal is to complete the study so we can do something effective July 1 so when this terminates we have the other one go into place.

Correct. That is correct. And then the other thing that goes along with that piece of legislation is there's a bunch of administrative aspects to it as well that's really going to cost the town money as far as not just time and effort, but now we have to report to the Public Service Commission. We also have to go and meet with other jurisdictions that utilize our water, Tequesta, Juneau, the county. Amanda and I would have to go to each of those jurisdictions, justify our rates, have public meetings. So there's a whole other aspect to it that's going to cost the utility money to do these presentations and do educational campaigns. So there's part of that, too. Continuing on, the budgetary highlights and assumptions. Expenditures of 1.1 million budget increase over all the funds in 2026. Primary drivers of that, it's very simple. You can see it here on the slide. You can see $11.9 million reduction in the general fund. That's primarily the driver from the JFRD transfer that we did from the general fund over to fund this year's operating of JFRD. And then you can see JFRD going live. So you can see the increase of $8.6 million there. So those are the primary drivers for these increases. And then you should start, once they go live in the following years, you should see some leveling out there. General fund revenues, overall increase of $4.3 million. We've talked about some of these already. The estimated increase in the ad valorem revenue due to the taxable values. We'll see a little shift in that once we get past July 1st. Intergovernmental revenue increases of $433,000 due to sales tax and state shared revenues. Again, we'll see the estimates coming in from the state, but we feel pretty confident with those early estimates. The increase of $233,000 in charges for service. What makes up our charges for service is solid waste and charges. Now that's an in and out, you'll see a revenue line item, then you'll see an expense line item. So it's an in and out number. Also the surcharge revenue and allocation costs. Actually, you'll see some allocation costs actually go down for some of the enterprise funds because of the allocation with JFRD. Interest earnings, we are anticipating that the trend that we're seeing here in the summer is going to continue with the interest earnings. The feds are indicating that they are not really keen on reducing the rates any further. We've been watching that very vigorously. So right now with these early estimates, we're anticipating an increase in those revenue streams. And then also the $1.5 million use of fund balance. Now I say here, I want to clarify, I say splash pad, that's only one of the elements that make up the total of 1.5. That portion, the splash pad itself is $600,000. There's $450,000 that was programmed in the CIP for fine park for some equipment. Also, I believe it was $25,000 for design work. And then there's an additional amount, which was FF&E funding for Station 16. I believe it's now Station 13. But there's some FF&E funding that was programmed in the current year CIP to start October 1 next year.

Can I comment on this particular topic here? So first of all, I had the benefit of having worked with their finance chief financial officer with a presentation of League of Women Voters earlier this year. And at that time, you know, there was conversation about this. referendum but and so one of the slides we did was how would we in mitigate our impacts you know after I presented a bunch of other stuff and I just want to read this because the order because really tonight in our furry force workshop which is the first time we started giving some policy directions or thoughts or whatever we don't finalize them per se but So first I said, and I realized the audience, I said, step one is to understand the scope of state mandates and restrictions upon local governments. I said, we do that every year. You know, I was making sure they understand. No, this isn't new. This happens every year. So that's a step one, understand. That's why we're going to be understanding more what the legislation was that could happen or the referendum in November. But then spending reductions. Cancel all discretionary capital improvement projects and expenditures. and pursue spending approvals by voter referendums for new capital debt. I want to pause at that point because I've lived this in my other career, and that's the first thing you do. If something is a discretionary, you put a pause on it. And I want to make sure that my comments going forth are not misheard because notice I said pursue spending approval by voter referendums for new capital debt. Hey, we just heard a couple of meetings ago the county was considering a referendum for libraries and parks and recs. And we would too, and I believe we've had a good history that the things that we do, the public typically wants and supports. Legislature and the governor maybe don't understand that, but that's the way it is. So, I believe we have to, at this moment in time, as we go into this budget, I'm gonna be advocating for not doing any project that could be considered discretionary. And for example, that'd be the splash pad, right? That doesn't mean I'm not supportive of it. We all had agreed to it. but the timing isn't now, because we could end up next year with a significant budget shortfall. That project probably wouldn't even be finished, but I don't think we should be proceeding with projects like that. And then even more importantly, Mr. Reynolds reminded us of that in this presentation, that I went back, the CIP last year already had it included, that is being funded from reserves. So a decision we made last year, unknown about all these other things that are gonna happen and could happen, right? I think, I would hope that the consensus would be here, we would change that, push it off, right? But I would not want to use any general fund reserve to cover any shortfall this year, right? I think we should hold onto it. So I'm just kind of, you know, this is operational, but they really go hand in hand here because he's showing a million and a half, you know, roughly in revenues from general reserve, the funds balance. And I'm suggesting that a guidance should be, that should be zero this year, right? And we're not saying we're not going to do these projects. We're just saying, you know, until we find out what happens in November, it doesn't, and not to mention the optics of proceeding with something like that, right?

So would you suggest then that we would do a referendum on like a parks? Well, That's right, similar to what the county did, but for the recreation program.

Well, look, if the referendum passes, right, we're going to lose so much money, we're not going to be able to do the projects that the public would support. So I'm hoping we have the right to do a referendum, right? But don't know all that, right? But yeah, I mean, because anyway. I just wanted to make sure what I'm saying is not misinterpreted by people that, gee, Jim, you're cutting parks. No, I'm not. I still think they need to be done. But I think an enhancement that we never had, I don't think I'm not going to be able to support. Maybe I was OK with it last year, right? But the world's so different. So I just wanted that as a guidance here, that my guidance, and hopefully we agree, tonight's not CIP. It's and was flagged by Mr. Reynolds. Great, thank you. Now we get a chance to say, gee, when we go through the CIP, we're going to be looking at things differently on what could be done in fiscal year 27, right? You know, we may move things out like that would be an example of one. We may choose to keep it in the five-year plan but push it out but then not be consuming so our general fund reserve is a million point four higher as you're projecting it right and these are the type of projects that are i would call not essential they're going to be you know put on hold or cut down the road if this goes forward or again i want to emphasize that's where you go with a voter referendum yeah

Yeah, I think, I mean, we're discussing this at a very conceptual level. We don't have the CIP in front of us. We don't have all these projects.

But in theory, it sounds... And I only brought this up because it shows up on here in our general fund revenues because of the way it works. We were going to be consuming $1.45 million. And I'm saying let's eliminate the consumption of it because that's all capital projects. that we'll have to fund, either we'll defer them, or in the case of the Abacoa Station, we'll have to figure that out when we do the CIP, right?

Well, again, like we stated earlier, we have a couple more workshops coming, one of them specifically to talk about the legislation. that's that's just recently passed. And then the CIP budget workshop as well. That way everybody's seeing the numbers and seeing the impacts of what could come and be able to help the council look at the some of the projects with that we currently have budgeted and some of the updates to some of the numbers because that's what we're doing right now. We're going through we're updating the CIP and preparing it with updated numbers.

This being the first, just to be clear here, this is the first workshop. You're hearing maybe stuff I thought more about until now, and you probably have thought more about stuff I haven't. And we throw it out. We don't have to reach agreement, but we want to coalesce to get to that point. And so that's why I was just raising that. I wanted to kind of explain my logic in saying no. I don't want to use fund balance. And then the way we avoid doing it is those projects that were consuming it that were already, the irony here is what was unique is it was already in last year's five-year budget plan. We wanted it so bad, we were going to use, but we weren't in this situation we are in now, right? So I'd like to believe people would have done differently if now knowing that. But again, you could weigh in now or it doesn't have to be, but we're all given a chance to give kind of items to consider as it's continued to be worked.

And this includes other items, including the Station 13. I assume that's a temporary station. So I wouldn't.

The Station 13.

Correct. Yeah, that's not discretionary. So I don't want to lump it into here and say that. But the general concept of looking at those types of projects, absolutely. I think CIP is going to be a really interesting exercise this year.

So looking at reserves, that's actually the next slide. We talk about this every year during the budget process of what our reserve balances are, what they look like going forward. You can see at the beginning balance in FY25, we started out at $62.5 million. This was part of our funding plan for JFRD. And then we've utilized over $20 million of those dollars rolling forward. for the funding of this year's JFRD. But one thing that we talk about every year is we look at the three months of worth of operating that we want to have available for storm type activity or catastrophic activity. I want to talk about that for a second. You can see there at the bottom we have a note in 2004-2005 hurricane season. there was some events that hurricane events that cost the town $11 million. And we did recapture that money, but it took a long time to do it. Rolling forward, what would that be with current dollars? You can see here is $18.7 million is what it would cost the town in today's dollars for those same type of events. But what's important is that FEMA is is looking to start pulling back, meaning that they're going to start raising their levels of what they're will consider for reimbursement. Right now, for example, this they'll raise the limits, think of it as a deductible on your car, they're going to raise those deductibles for what's allowable to be considered an event in the state of Florida. For reimbursement, they'll drip that will go down to the local level as well for at the county level of what's acceptable and what's otherwise there could be some instances where the town may not be able to apply for or seek reimbursement based on localized events. Depends on the dollar value. And also, the other thing that they're looking at right now, FEMA will pay 75% of those costs if it's allowable. They're looking to reduce that to 50%. So those things, as we start looking at our reserves, we think in terms of natural disasters and being able to have cash available to make sure our citizens are taken care of. Because in those instances, we don't want to be waiting on the state. We don't want to be waiting on the federal government. We want to make sure that here locally, we're making sure our citizens are taken care of. So that's kind of important. We're watching that go through. It hasn't happened yet, but there is discussions. And it's real important when we start looking at our reserve balances. Looking at the reserves, Projecting forward into next year, the $1.4 million that we just discussed, you can see that coming out in 27. We still wound up with $40.3 million in our reserves. That's a decent reserve for a community of our size. I would say it's pretty accurate of where we probably should be. I would always like to have more, but I understand that we have to be cautious of the taxpayers' money and just have only what we need available. But the main purpose is we like to talk about this in regards to unexpected things that come our way, being able to react to them. We've done a great job specifically over the last three years in utilizing the reserves when needed, and we still have a very healthy fund balance at the end of the implementation of JFRD. So kudos to the town and the council on that.

I have on this slide here before you turn the deck and just want to reinforce and you can confirm here. So those costs that we incurred, I think it took us two or three years to get reimbursed, correct?

It did. It took a number of years.

Okay, I just want to make sure that's understood. It's like it was multi. So it's real. You have to have some money because even though you're going to recover it, it took several years. It's just kind of stunning. And so like you say, inflating it, it's $20 million. These are real risks that could happen. then you know we ought to table these I put you know in some kind of table all these items that our future impacts to us so we can make sure we're advocating for that because what you just said here is in the future local governments you know would need more money to cover for events you know that's a basis for some taxation on homesteaded properties, right? I mean, it adds up.

It happens the way I'm hearing come down from the feds and the legislature.

Yeah, I'll make a note of it. And then secondly, so that's why when I saw this one, and we talked about it on the previous page, but I was just bothered by the balance going down. And that's why you could see then it wouldn't go down. And then the other one is, I think we should add it, at least for more awareness, is the pending sale of the nine-acre town property. And I understand that is, I just want to make sure we know that goes in here. Now, each one of us, I'm sure have some thought of what, and as well as staff and the town manager, what some of that money could be used for. So it's not to suggest it definitely would end up in there, but just want to realize that I would for no other, at least for housekeeping purposes, at this phase of the budgeting thing, I think it should be added there, because if it's not consumed, it's likely to add to the year-ending 2027 balance. Then we feel a little bit better about if there's some need to do something, because now we know we have more cushion there, right? But I think that should be flagged.

OK. So looking on the expenditure side of the house for the general fund, proposed FY27 budget. Over on the right-hand column, you can see there the items that are creating the $5.1 million increase. Primarily, the main drivers are salary and benefits. I mean, 58% of the general fund budget is employee-related, so that makes sense. We see a contingency balance increase over last year. We also see the transfer to the capital fund. We just discussed that at length. So you can see what's driving a lot of these increases and decreases in the general fund.

On this one, because I don't think this would be the time to talk about it anyway, but from a departmental standpoint, and I would advocate that, you know, we, we get together one-on-one, if you have any questions on that, you want to follow up on, but it just, I certainly have some, and I just, I always use a process where I just look at the percent change, which I have. And, uh, it's, this is just first meeting, but I don't want to go by the page to suggest I'm okay with all this. I may be, but I have questions on some of it. Okay.

Now, keep in mind, when you're looking at these increases and decreases here, we're taking out the fire rescue portion so you can compare apples to apples. I want to make sure that that's clear. I state that up here at the top.

Yeah.

So speaking of Jupiter Fire Rescue, this is the first year of operating. You can see here we're estimating the avalorum to sustain the Jupiter Fire Rescue would be at 1.20% equating to 20 transport fees at $1.5 million. If you looked early on in some of our estimates, we had $2 million. The chief and I have been looking at call data, and we've revised our estimate down based on some of the call data that we've been seeing. The non-Avalorum assessment amount that you see here, the $1.9 million is to help pay for the debt service. We've talked about that at length. fire prevention revenue. What that actually is, is that's the permit fee and the plan review fee that you all approved on Tuesday for to do the study, we should have that study back before October one. And then the annual inspection fee, where we actually go out and we inspect the businesses annually for fire safety. That's also the the chief has assured me that we'll have that rate as well before the council before October one.

Is that mainly for commercial properties?

I'm sorry?

Is that mainly commercial properties? Commercial properties.

And usually what you would see with that is it would be attached to the business license tax or the business license permit. And then whenever they go to renew that permit or they come in for a new one, the fire department would go out and also do an inspection. But we don't have that here, so they will be doing it on their own. But $25.4 million, now I want to emphasize that these are early estimates. We've been hiring 92 firefighters, and this estimate includes, whenever we include vacant positions when we produce this budget, those vacancies, we produce it with a family plan for benefits, which is the most expensive benefit package that you can get, because we have no idea what they're going to elect. Now that we've started hiring, they've started electing their benefits. I feel that this number is actually going to go down based on those benefit elections. So I wanted to point that out.

Before you change the page, and humor me on this one, everybody, but I would prefer if from now on, every time we see operational October 1, we put a comma or earlier. Or earlier? Yeah, because we're going to be ready earlier. We keep offering it to the county. If we were to have a hurricane, God forbid, you know, in September or whatever, I hope the county would take advantage of our staff. So just I know I've heard from our chief, and I know that they're going to be ready early. So the only thing holding us up from going earlier is the county. So why not just say operational on October 1 or earlier? May I get that?

I wrote it down.

Thank you.

I'm smiling because I've been out to the stations. My wife wanted to see it when we went out there, and I will tell you they're ready to serve.

Oh, I know they are. I know they are.

The Jupiter Fire Debt Service, we've talked about this at length as well. The town is very, very healthy. Triple A rating. We still fill, even with the rates... that we've been watching, we still feel we're going to get a competitive rate in the market. We've got to pay off the commercial paper that we use to construct the two new stations that will be coming before you guys before the end of the summer to seek permission to go out and go out on the market. So feeling pretty good about it and feeling we're going to come in on target. The water fund, we talked about this early on as well. No rate indexing being needed at this point. We are doing a water rate study. We hope to complete that early, probably before December is what we're hoping for, but we'll see. Also, what's included in the water fund is a 5% salary increase. That's with all funds, reduction in debt service, chemical cost adjustments due to bids in late June. We haven't, I don't believe we've received those yet. Have we? No. Utility service decrease, and we've been working with FPNL, refining our estimates, annual estimates for FPNL, so we feel like the decrease is warranted.

I'm sorry, I'll try to wait until you're done with the slide. Just on this one, and I'm not asking for an explanation here, but before next time. So the increase in revenue for services is 1.8%. And in December, we had approved the two-year implementation plan for replacing the water meters. that was estimated to recover missed revenue of $1.3 million annually, which is 4%. So I would hope that the average, you know, we're already well along this. I've asked that question. No need for an explanation. It's going to be what it's going to be. And if it's been going slower than they thought, well, then it's a lower number. But if they pick it up, we're supposed to get a 4.4% increase out of that.

That's all going to be reviewed during the rate analysis. It definitely is.

No, I understand. But when we sit here in the budget, it's also we talk about that too. I mean, it was based on something. That seems to be the easiest number to base it on is what percentage of the meters have been done by October 1 and then how much can be done during the year, and you kind of paper it in. But I don't want to belabor that. That's a logical calc.

While you're there, I have one question on the chemicals. A couple months ago, we had the 48% increase in sulfuric acid. I went back and looked at all the chemicals, line items, and it's an average about 14% increase in cost for chemicals. Do we think that's adequate for this year, or do we think that may be adjusted significantly based upon the bids coming in in June?

It always gets adjusted when the bids come in. So at this point in time, they use what they have.

Right now, we've got 14%. Is that based on history, or...?

We think the increase from 26 to 27 on the C. P. I. Well not the C. P. I. But the P. P. I. That producer index for chemicals from last last year's increase we are receiving bids for the rest the remainder of the chemicals next Tuesday OK we will know.

But we always award that before the end of this fiscal year, so then we always normalize whatever the number is.

Yes, and we always adjust the budget based on the bid pricing.

I was mainly looking at what was the basis for the 14% average right now. So you said PPI? Yes. All right, thank you.

Moving on to the stormwater fund, no rate indexing being requested for the stormwater fund as well. We show $580,000 coming from retained earnings, projected R&R contribution of $502,000. One of the things I wanted to point out as an expense in the stormwater is actually being shared with water is the purchase of a new vac truck. They currently have a vac trailer that's quite old and needing replacement. So they're actually going to invest in a back truck of $435,000. But that cost is being split between water and stormwater. So an enhancement of service. The Jupiter River Estate Non-Avalorum Assessment. You can see this is a non-trimming year. So minimal impact there. The Building Fund. You can see there's an increase of $350,000 related to... the permit revenue, but again, we're doing a study on that as well. In fact, the legislature, they changed the methodology that these permits can be based on, the fees, so we are expediting that process. Interest earnings, we're seeing a decrease there, and I want to point out why we're seeing a decrease in the interest earnings. If you remember right, we just purchased the building. We just spent $9 million in cash. We had approximately $18 million in reserves, we still have legally available over $5 million in reserves for operating the remainder of it through the mid year budget process. You've reserved the remainder of those dollars for uh, technology and training enhancements which are outlined in the statute that it's allowable for. Uh, we will definitely be looking to invest some of those dollars out of the new facility that's been purchased and those will be coming forward later in the summer to the council. Uh, slight increase in departmental expenses. contractual services. You're aware we have contractors that we use for plan review and also inspections. I believe it's at the next meeting you'll actually be asked to approve three new contracts for those services. So we're anticipating an increase of $77,000, increase in $277,000 for the cost allocation to the general fund. What is not the whole driver, but part of that driver that increases due to code and compliance, code and compliance, they work hand in hand with the building department. We research every year as far as how much they've actually been working for the building fund. So there's been a slight increase based on how much they've been assisting the fund itself. Health Insurance Fund, this is always something we talk about multiple times a year now because of the premium holidays. We're still right now anticipating to keep our $10 million. We're going to reevaluate that going into next year based on the JFRD coming online. We had 96 new firefighters coming on board. Is the $10 million adequate? Should we go up in that? Should we reduce the premiums? What should we do? Or continue on with the premium holidays? We want to see how the insurance claims go next year with the added bodies. I will tell you, looking at the firefighters we've been hiring, they all seem very healthy, which is good. And that's the primary driver for a lot of these. The buildup of the reserves is we're as the town goes, we're a very healthy community.

What is fire increase the population of our employee base about 20% increase?

In employees? Increased it to 113 positions, including command staff.

It's like 20%.

3 to 4, 15. 3 to 4, 15? Okay. So that's significant. Sorry, I didn't know that off the top of my head.

Okay. Oh, that's fine. Maybe down the road look at increasing the balance, the 10,000. I don't know.

It may be necessary, and that's why I'm saying we need to keep an eye on it, and we report out on it every quarter. and we will definitely be coming to the council if we feel that there's something occurring. The main thing we need to watch with this is the claims cost. Claims cost is the driver of the fund, and if it remains low with the addition of the people there, and we may not need to do anything, but it's based on historical. But the increase in personnel, it may require that we do something.

It took us a while to get to the $10 million plus, and that was a great goal to meet. But if we need to increase it, we should look at it. But we may not have to, but it's just keep it solid. Right.

The goal when we first set the reserves was based primarily on the claims cost. Yeah. And looking at the claims cost. Because that's how the state looks at it when they look at your reserve balance. Okay.

Can I on this one before you turn the page? So, you know, I remember before we had this and the way it would work is we'd have one year where the insurance company didn't make as much money because we had a couple events. significant events on an employee and then they would jack up the rates of course you never get the money back and so we realized that gee you know instead of and we cut into it when we thought we knew we were going to be likely to be lower But the point is, I do remember it could be two or three events and you can consume millions of dollars. And the only reason I'm just saying this, I just want to kind of on this one, I'm going to ask that i don't want to do a i mean i supported the premium holidays that's a fair way to do it but you say that we're going to reevaluate the reserve goals in late 27 28 and i'm just going to say that i'm not supportive of a premium holiday until we do that right till we see what that is so maybe we weren't going to do a premium holiday anyway and you're waiting to see that happen but i just want to say that because if it turns out we felt you know we needed the higher reserve and i don't i haven't made a decision about it i don't have any either so uh but i'm just saying maybe you ought to just say that we'll reevaluate them if we think we're at a point of offering a you know a premium holiday then we should evaluate it before we do that

One of the things, just to make sure it's clear, when you talk about catastrophic events, we say that we're partially self-insured.

I understand.

And it's because we have stop-loss insurance for these catastrophic events.

Brilliant. You know, I can't believe, I mean, knowing what life was and knowing how the rest of the free world is with medical, it is stunning that we've been able to keep it constant for so long. It really is. This really paid off, but...

And that was my point of bringing it up. It's like, you know, congratulations. I mean, it was a great program, and it's just such a solid fund. So let's just keep it that way. That was all in my point.

But in saying that is I'm prepared for it to go down a year or two. I mean, because that's why you build a reserve, right? I'm not going to get excited when it happens one time, but I'm going to just realize we just added a significant population of additional employees, and it may warrant looking at that, at least thinking about it, right, before we maintain that right now. Because right now it's suggesting we're going to end up even higher.

Right?

So we're going to be above it. Anyway, enough said. I just wanted to...

I tallied up the two sheets under the general fund. One was the 303.75 versus the 112 for fire. Is that complete? Are we 100% staffed or we got more folks we're bringing on this year or next year?

18 open positions.

Do we know? We're not at 100% staffing at the moment. Because when I looked at those staffing for each department and everything, it didn't show anything being open.

Yeah, we're not at full staffing at the moment. We've had to defer some of the hiring process to get the JFRD staff fully on board, and now we're circling back. We have no new positions. There's some critical hires that we need to make, and we've put things on hold for a little bit.

I guess what I'm looking at is those critical hires with old positions that we either get before the end of this fiscal year or next, how are they – Are they book-kept in here?

What you're seeing in here is the position control. Basically, positions that have been authorized, it doesn't indicate whether it's filled or it's not. That's what I was looking at.

I didn't see anything that was still open or not filled. So everything's filled, nothing's been cut. They're just open positions that are being held that will be filled eventually.

If we have a vacancy, we are actively trying to recruit those currently.

But is that salary included in... They are.

If it's a vacancy, like what I was talking about earlier with the fire department, when we budgeted this, we hadn't hired all those new firefighters that we just swore in. So we knew that the positions were available based on what was budgeted, and we budget for the full salary and full benefits. Okay. All right. Thank you. So that's what's in here.

But the reality is, is you never can be full staff because people leave and things happen. And then, you know, so the right thing to do is have included in the budget, but we end up the year with some amount that goes to the reserve fund balance. But that's the approach. But what we're hearing is there's no new positions requested.

That's significant. When's the last time we had that? I've never seen. Was it last year that we had none? I thought we had one.

Usually we have a couple. I don't remember a time when we had zero.

Same. I think that's meaningful. I think we need to just make sure people understand that we're not trying to grow.

And I think it's an appropriate approach with the high uncertainty this year that we're not adding, requesting an add.

So with that, this is a conclusion of our presentation this evening. What are some of the next steps? July 1st, I mentioned this throughout the presentation, anxiously awaiting the property appraiser tax roll. Also, we're going to be setting the trim, which is July 21st. Be setting the millage rate, which also includes the JFRD rate. August 13th is the second budget workshop. We will be trying to fit a workshop between the 21st and the 13th to talk about the legislation that's passed recently for the constitutional amendments. And then the first and second reading on September 8th and September 22nd for second and final reading of the FY27 operating and CIP budgets. With that, that concludes my presentation for this evening, Mr. Mayor.

Delaney, do you have any questions or any comments?

No, I met this morning with staff on this. I think we, anything, he covered everything for now. We're still waiting for some numbers to come in, but I'm good with everything. That was a great presentation as usual.

Councilor Sunstrom?

I do want to say we've taken a lot of efforts to be conservative looking ahead, and we always have. I think fire rescue continues to be a success story that we have to highlight, and I'm glad that you took some time to share the history on that, Mayor, and we become operational this next fiscal year. It's our first year where Jupiter residents will be able to realize the savings. We've talked about it, planned for it, but it's a real significant milestone for us. So don't want to lose touch with that. It is conceptual. It is early. I tend to save comments for the end, not during presentation, but it's interesting conceptually because this is our first chance to think about how we're going to address what's coming or what could come And in talking about the nav, you know, we try not to plan like it's going to happen a hundred percent. Um, but we have to present a plan and we will in a workshop. So we are going to have a workshop specifically addressing the property tax item in July. But it's interesting to me, the voter referendum and, and you have experience with that, but I don't, you know, I don't have, um, kind of general obligation, debt, or voter approval for projects like that. So I'm curious about how it's structured. I think a lot of municipalities are being creative, but there's a lot I need to learn about that and how it could be presented. And then just in the CIP, I know we're going to really scrub that this year. And I would look at discretionary, too. I've had conversations with staff where, you know, I've been promoting recreation for a very long time, but we have a number of playgrounds in place now. And a lot of it can be shifted out to focus on other priorities depending on cuts. But we need to think about what the criteria are for CIP and what we want to preserve. I think the splash pad had a ton of support. It's been in phases. So, I mean, we've talked about it for years. It's the final phase to complete a park. I'm hesitant to... I'd like to find space for it if possible. And I'm willing to give up a lot of other things to protect it because I know how important it is and how much discussion has been had on it. So, you know, that's going to come later. Again, this is all early. But I want to think about, you know, we need local match that we still have appropriations before the state. Some of those are for seemingly discretionary items like recreation and require a local match. Some of these things are in our strategic plan. Some are not. Some have been discussed for years in many public meetings with a lot of public support. Some are newer and don't have the same. And so I'm just trying to find my logic on the CIP. Um, but certainly agree with a lot of what the mayor is saying. I think it's, you know, a pretty sound approach. But again, I have a lot to learn perhaps as a newer member of council on all of this restructuring and all the different options available to us. And I know that those options will be presented in a meeting. So it sounds good, but I want to know the details. And those are types of criteria I would be looking at in a CIP to weigh, you know, what we want to get done this year because it may not happen, right? And we have a CIP this year. And we have residents that expect services and projects that they've been talking about for years from us this year. So I don't want to disappoint them by axing everything, and then it doesn't happen, or there's legal issues. So it could, but it may not. We talked about that with the NAV. We should talk about it here. We should sort a set of criteria, present our logic in the CIP.

I'm sorry that it.

Just had a couple questions got on that other contractual service for fire fund that one over $1,000,000 what would you say that was for again.

The I'll tell you what I'll let the deputy chief talk about OK.

The $1,000,000 that was in the other contractual was for dispatch services.

Okay, all right, that's with NORFCOM?

Correct.

Okay, all right. And my last question is, and I don't know if you have an answer, I looked for that, I couldn't find it, but where are the renovation costs book kept for, well, it's right now Fire Station 16, it's going to be Firehouse 13. Right. Because we've got to start that in October, right?

Right, that'll be part of the CIP discussion. We're currently going to be budgeting that in the CIP. Okay. Okay. That'll take effect October 1.

Okay, so that'll be a CIP project.

That is correct. All right.

All right. That's all I had then. Thank you. Hey, nice job, everybody, for putting this presentation together. It's very informative. And I particularly liked the manual.

That was really helpful. I was going to point out the manual. Revenue manual. Everybody seems to like the manual.

I have a few items, just quickly. And so first, let me talk about, and again, I don't know nor do you know what each one of us knows. So this is a time to get it out. But JFR, JFRD incremental ad valorem, you know, we all saw it reported the estimate of the town impact of the referendum in year one and year two, and just call it six and 10 million. But that didn't take into account because they didn't know about it impact from the JFRD incremental ad valorem. It was estimated based on the current base ad valorem.

Correct.

And I just want to make sure that my colleagues understand that the impact, when you looked at why we were different from the gardens, half of the gardens, partly it's because they're getting hit on their portion of ad valorem for fire rescue, and ours didn't exist before.

What you need to take into account, though, is when you're looking at the numbers that came over from the property appraiser, when they're showing the impact, They're basing that on you've got to take the actual $50,000 that's already. No, I understand. And once you take that off, it drops down to about $8 million. But once you add in JFRD, it does go up to the total impact of $16 million.

I just want everybody to understand, so the hit is worse. than we thought, right? Thank God that we, you know, it doesn't help us, but it helps our public that we proceeded with this initiative to save significant money. It's ironic, you know, we're saving just from this initiative that the team here did as much as the referendum would get, but no credit for that. But I just wanted to make sure. That's why, to me, it's dire. The other thing is that when, and I'm just repeating what Mr. Reynolds taught me and making sure that if I didn't learn it right, you can correct me, so this isn't my discovery, but when the county was doing MSTU for us, they were able to take the MSTU for fire rescue that was in the CRA area and were not. So that's kind of a loss, if you will, that we have to recognize when you're doing the cut-in. And there's so many little nuanced complications that our finance department keeps that into account, but just want to make sure that we get less than we would otherwise get back to the general fund, because you've got to adjust for that, correct?

That is exactly correct.

And that's roughly $600,000, $500,000-something. It's not an insignificant number. That's correct. And that's just the way the legislation was. So it helps the CRA, but it doesn't help the general fund. And it is what it is. So that's that on that. Then I just want to say on the splash pad, and I'm not debating it. This is a first. We're talking about it. But number one is when we get into CIP, we'll look at everything and we'll decide what is really a nice city to have versus what we really, I mean, I think we've neglected field renovations. I advocated that. So we'll just have to balance that. But when we talk about referendum, so I just pitched to that, I'm just still pitching why in my mind I've kind of concluded only because I'm going to be very disciplined for this one coming year. Because I also don't want to be made an example of. I don't want somebody to say, oh, gosh, look what they're doing over here, right? And I tell you what, I'm... Having been through referendums, I know that the public wants these amenities. We've been able to do it with the lowest ad valorem tax rate. But it's not recognized that if this referendum goes through, that a local government won't have the options that we had before to do these things. So we're going to be handcuffed, at least for a while. And the irony is about the referendum. And this is just an open-ended question. And I don't expect you to answer it, Mr. Reynolds. But I'm wondering. If this goes through, and I'll just throw out a number, and there's 30% of the homeowners that don't pay any taxes, I'm not sure what's going to happen to referendums, because then voters are going to be voting on a referendum that they have not a dollar stake in it. No, no, but these are all valid questions, right? I'd be curious if people have thought through these logistics here or whatever, because I'm convinced certainly if no one's paying for it, that's going to be a given vote, as silly as that is, right? I think they support it anyway. But historically, look, we all know, we've heard, like you say, people want the splash pad, so they'd be willing, typically in a referendum, at least our record has been 100%, right?

You make a good point in terms of it's not just the cost of things. It's changing how local government fundamentally work. Absolutely. And when you look at the county, the county's actually got it even worse because not only are they going to face cuts as a local government, but if we have solvency issues with municipalities across this county, how are you going to transition fire or police services? If they have to take that service on, how are they going to do that and protect public safety in any transition period? I don't understand. That's a local control and a public safety issue. So, I mean, they have potentially greater scale and scope being pushed on them because they have a responsibility to do so as a county to take over those. But then they're also being cut at the same time. So I don't understand how the structure of local government is going to represent people effectively. You can't. And that's all costs aside. That's just... representation and fairness. I don't understand how that will work.

But I was just sharing on the referendum an opinion. While I can say that we've been successful over the years doing it and reasonably be confident, that's what Mr. Reynolds and I expressed to the League of Women Voters. We were confident about it. But I just wonder whether or not there could be a future legal challenge that has never happened before if the situation exists, that you have a large number of voters that have absolutely zero stake in voting for an ad valorem. I mean, to me, that seems like a legitimate issue. So I'm just trying to represent up here. I'm worried about that. So until we get further along in understanding, you know, I don't even know if that's going to be an option as had been in the past.

But all of that's going to have to be researched for this workshop. I mean, the scope of this.

It may be and will be, but still, some of it's going to be subject to litigation. So, you know, we're kind of on a ride here. We don't control roller coaster ride. We don't fully control it, but we have to navigate it. And then just lastly, and I want to say, every time I see this revenue manual, you know, we had a, I don't even remember, I think one or two people had asked for this revenue manual, but oh my gosh, staff created something. I'd be shocked if any other local government has it. Don't tell me, doesn't matter. My opinion is I can't believe, I can't believe anybody else has it, right? That's just an opinion, right? It's my perception or whatever. And it gets updated. It's phenomenal because it is a useful tool. I mean, I pulled it out because you update what the financials were for each one of these things. And this is not an easy effort. Thank you. But with that, I just want to ask, and I don't want to belabor the point. I'm just going to make the ask. And I think on the non-Advalorm ad, that talks about the current rate. I think we need to be transparent because that's the way the consultant designed it. Talking about total square footage, it only applies to single-family homes, and I think we need to be transparent that townhomes and condos that have a total, it isn't being used because that's the way what we came up with the study

gave us as the only option.

I don't want that, I think that needs to be corrected, but I just won't belabor it anymore. Because it implies everybody pays on total, and the 15 neighbors I did went to the property appraiser site, and all 15, be it condos or townhomes, have a total. Total not being used, only the air conditioned. Anyway, that's just a change in here, nobody will notice, but it won't be forgotten. and uh i don't have any other mr no okay thank you time is now 7 13 we'll adjourn the meeting thanks scott thank you scott thank you thank you

Thank you.

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