City Commission - workshop

Welcome to the City Commission joint meeting with the Budget Advisory Board. I want to thank you all for being here this morning. This is the first of several joint workshops with the Budget Advisory Board. So I want to thank I'm getting some feedback on my mic. I just want to thank all the members of the Budget Advisory Board for your volunteer efforts in trying to work with the city staff commission and trying to organize our priorities as well as to determine the affordability of a number of the initiatives that the city seeks to put forward.

I know it's not an easy task and I want to thank you because I know it takes a lot of your time, it's all out of your personal time, but I know you love it. We want to thank you for doing it. City Manager, do you want to take it from here? Or do you want to go directly? Oh, first of we have to take role. Okay. So take the role of the Budget Advisory Board, please.

Melissa Milroy, not present. David Max Ortolani? Here. Samantha Perryman Jones? Melinda Boker? Rich DiGirolamo? Here. William Brown? Present. Olivier Kale? Anid Matales Thompson, and Jason Jeffress.

We have a form

of the Budget Advisory Board? I didn't ask that. I'm just wondering if you have a majority of your members here on the board. I can't hear you. No. Okay. All right. Well, I hope we can accomplish something today since we only have running on half a tank here. Would you please do the roll call for the commission? Yes.

Commissioner Herp. Commissioner Glassman. Here. Commissioner Beasley Pittman. Here. Vice Mayor Sorenson. Here. Mayor itos?

Here. Alright. Well, thank you members of the commission and, city manager. I'll let you take it from here.

Thank you, mayor. At this time, I'd like to call forward Laura Rees, the director of the office of management and budget, and she will kick off the workshop and will be joined by members of the budget advisory board, particularly the chair, Bill Brown.

Thank you, manager Williams. Good morning, everyone. Laura Rees, director of office of management and budget. As the mayor indicated, this is the first of three workshops that the budget advisory board has scheduled each year with the city commission. At this workshop, the chair is going to share what has been going on from October through today and share the upcoming plans with the commission, and then we'll asking for feedback. We have the OMB team here to answer any questions you might have as well. With that, I'll introduce our chair, William Brown, to speak about the work that the BEP's been doing.

Good morning, Mayor, Vice Mayor, members of the commission, Bill Brown, Chairman of the Budget Advisory Board. As has been mentioned, we meet three times jointly so that we can get feedback as a Citizens Advisory Board of what the commission is thinking on their priorities and directions. We initially get guidance when you have your commission prioritization workshop back in I believe it was January or early February to give us some guidance and we start planning from that point working with the city manager as we start developing the fiscal year's coming budget, which in this case would be 2027. Some of the past guidance that we've received from this body is where you'd like to be on the millage rate. As we all know, the millage rate has stayed the same for the past nineteen years.

We do have some projected challenges in outlining years, but that's only projections from our consultant, the city hires StanTech. So we'd like to get further guidance as we move forward on your thoughts on that and where you believe additional resource if there are additional resources needed in this year's coming budget in departments or staffing or whatever you feel in areas of additional resources or funds should be appropriated? And then we're open to are you open to reducing service levels and what what those reductions would be in services if we have to start looking to balance a budget working with the city manager? And as you know, the city hall, the BABS interest is knowing whether you would like us to weigh in on the financial component of the City Hall project and how they may relate to the city's budget depending on the outcome of your decision tonight on the interim agreement. So those are some key takeaways that we want to try to get some guidance on as we leave here today.

Let me just go back and as Laura mentioned since last we finished the budget, the 2026 budget, looked at working on a work plan and focus on the budget review. As you know, we develop an annual work plan. We meet several times throughout the year. I think we're one of the boards that have the most meetings, what is it 18 meetings? Yes.

And then we month of May, we meet three times with all the department heads. But as part of the 2027 development project, we conducted a focus review on major cost pressures, revenue trends and opportunities to partner with staff to do a deep dive into the issues. Each member reported back was given an assignment and reported back just this month to the budget board as a whole and a summary of the issues were provided in draft form that we will be providing to the commission at our next workshop. I think it would be appropriate because it's still in draft and we still have some additions to add to it. Let me just jump into some of the key components that you will find in that.

Some of the things we looked at was affordability and cost of living. Affordability remains a major challenge for our city largely driven by housing costs and the city should consider the cost of living when setting fees. So that's why you might say, well, why did they look at affordable housing when you have another board? But what we looked at primarily was the impact of setting fees and cost, what effect that has on affordable housing. Revenue trends and opportunities, reviewed revenue trends and benchmarks across all departments that the city could explore opportunities to increase cost recovery where it's appropriate.

One of the things you're going to receive this afternoon on from parks is the increase of fees for special events and the increase. That was one of the recommendations of BAB last year. I sat on that stakeholders group and hopefully through the presentation this afternoon there'll be some movement on those increases supports. As it relates to event fees and sponsorships and the BAB's also partnered with staff and weighing in on revenue enhanced recommendations at the time that they are beginning to be considered. Maximize use of technology such as AI to optimize service delivery and efficiency.

Our recommendation is to take advantage of opportunities and to continue with implementing them strategically and thoroughly. An example, it might be developmental services. Could they incorporate AI more in the permitting process that could streamline from weeks that takes now from a month to a shorter period of time to get permitting with the use of AI. Everyone has a fear that AI will cost jobs, not necessarily, it's more efficient, it's going to take time to implement and if there are job reductions through AI, you do it through attrition. And so no one's losing their jobs overnight.

It's more efficiency the way to run government. We recommend that perhaps they do it a pilot in one department, incorporate AI and see how it works and see if it is cost effective. Another assignment was budget balancing and strategies, avoid short term fixes that increase long term costs. Here in the past, there's been a tendency to do some short fixes that will have long term cost that we keep having to reevaluate. Protect high priority initiatives that strengthen the city and improve the efficiency, shift conversation to what to keep rather than what to cut.

I know the city manager when she sat in on our budget meeting, was very impressed with that concept and I think that's going to be one of the key takeaways as she moves forward. And that is shift the conversation to what to keep rather than what to cut. Also assignment was a millage rate and benchmarking. As I mentioned, millage has stayed the same nineteen years. We did some comparisons to other cities around Broward County and surrounding communities.

But we recognize the city supports a broader population which extends beyond Fort Lauderdale residents. One example is our population grows dramatically during the daytime when people from the Western Suburbs come into downtown to work. So we encourage staff to explore how you shift cost burdens that come from providing services to visitors and daily commuters away from the residents. Can we put

a toll on Broward Boulevard?

Anything's on the table for discussion? You know. And then so those are some of the key things. I think once you get this document before our next meeting, joint meeting, please take the time to go through it, look at it. I can't commend the members of the board that took the time working with staff and staff to get this document.

This was not done overnight. We decided as a group to break it up into pieces and assignments so that it wouldn't burden the entire board and get bogged down and we can finish it and get it in place for this year's budgeting process. And then as you know, in May, we'll meet again with department heads to begin the budget proposals. The next time we'll meet will be on June 16. In that time, we'll have the property appraisers initial valuation.

It'd be interesting to see. We've had some pretty lucrative years on assessed values. We know that the condo market and the real estate homes have kind of flattened out currently. So it will be interesting to see what we come in this year. Hopefully, we come in around 7%, percent, 7.5% growth, but that's yet to be determined until we get that actual number from the appraisal value. Is that correct? I think right now we're going in looking at building a budget on what percent? 7%. So hopefully we'll be able. In past years, the number that we've taken to build a budget has come in exceeding that number.

So 7% in past has been a conservative number on behalf of staff. So it will be interesting to see if we keep that trend. And with that, we'll have to start discussion on the fire assessment fee on setting that rate as we move forward. And then on August 18, when we come back, we'll provide a recommendation on the city manager's proposed budget to be adopted at the September meeting. Just want to thank everyone here again for their hard work and working with this commission and we look forward to having this discussion this afternoon or this while we're here to get your feedback on those issues that I brought up as pertains to millage, service levels, City Hall, whatever.

We're here to serve this this commission. We're appointed by this commission. We take direction from the City Commission because we are your appointees and we have to stay within the scope of our boundaries when it comes to looking at issues. We just can't go rogue and that's what we try to do. Thank you.

All right, great. Thank you, Bill. Anyone else from the board have any comments or thoughts on anything that was just said? No? Okay. Not yet. Not yet. Okay. All right, so I open it up to the commission. Does anyone from the commission have any questions of Mr. Brown or any member of the board?

Well, Mayor, I would just echo some of those thoughts. A couple of things, just speaking to the idea of having the Budget Advisory Board take a look at the city hall proposals, I think that's a great idea. I wish we had been doing this all along. Candidly, I'd love to have your input. I wish it was not at the eleventh hour.

I would like to have had the guidance that you all have to help inform us in our decision making process. I don't know where we're going tonight, but if we should happen to take a pause, I would love to have that come back to you all to take a more extensive look at the financial aspect of it and bring us back a recommendation on it. So that would be one piece. The other side, as it relates to AI, which I've been pushing for about as long as it's been around, I think it's a great idea. The only thing I would add to that though is there's this idea that we're not necessarily going to have layoffs as a result of AI.

I think we need to get away from that. Let's not be afraid of layoffs. Okay, corporate America is laying off 20% of its workforce because of AI. We are not a full employment agency. It's okay to lay people off. We need to embrace that if we're going to be honest with our workforce and honest with the taxpayers that layoffs are going to happen in the next five years all across corporate America and the public sector as well. So if we're going to be honest with people, let's be honest with it. AI is going to replace jobs and I fully embrace that and I think we need to as well.

Okay, so I complete your comments. Okay, Commissioner Beasley Pittman. I'm sorry, oh I'm sorry Bill, yes.

Thank you Vice Mayor, not Vice Mayor.

Former Vice Mayor.

Former Vice Mayor. No, I think everyone agrees with your comments on AI and I think there's ways that to attrition we could you do job reduction and but it's going to take time you grow into different aspects and components because we all agree AI is changing daily. So but it's it's going to be a a learning progress or process as we grow into this. And if we can reduce positions and save taxpayers money, I don't think there's anyone on that board would be opposed to that.

And I agree. I think it's a combination of both, Bill. I think attrition is one, certainly. Think part of what you're seeing with AI in the larger corporate environment is job compression. So through attrition, positions are not being filled.

People are not being hired. But the next step is, at the end of the day, have to recognize that not every job that's being done in a white collar knowledge based role today, a cognitive role needs to be done. It is going to be replaced. We are going to have increased productivity as a result through the adoption and implementation of AI and some of those roles are simply not going to be needed to the same extent. And we again, like I said, I believe we need to be honest with our workforce about this that not everybody is going to be filling those roles five years from now. That's simply the nature of our dynamic economy. Thank you. Yes.

Okay. Pam Beasley Pittman.

Thank you, Mayor.

Thank you to our board for all that you do. It's a lot of work that you pour into this, to bring, the information that we need to make a proper decision moving forward with the budget. In your discussions, it it appears that you have taken it to another level this year. You've looked at some different opportunities. When you talked about the each one of you as members taking on a component and bringing it together and having a draft that I'm excited to hear about, What are some of the if you would talk about that today, what are some of the other areas that you're looking at understanding that our revenue flow has changed, it has decreased and how does that even play in how we're looking at what the millis trade could do or what it could not do with the change in revenue?

Well, are all good questions and I'm not going to stand here and take credit. I'm going to give credit to where credit is due. Past year and looking at all these was a product of one of our board newest board not the newest but a new board member and that's Olivia Cale. And I'm going to ask Olivia to step up here and address that question because he was the one that really guided us through this process in areas and to answer your question to what future, I'll let you can help answer it.

Thank you, Chairman. And I like

engaging my board in our board. We're a team or a collaborative team.

So trying to answer, Mayor Vice Mayor and Commissioner Pittman, the idea was to work better as a team and divide and conquer. So we had different tasks, areas of interest. The big picture beyond the task, and Chairman Brown talked about these areas of focus, the big picture that I didn't want the board to lose sight of was the burden on the residents and how the balancing act of growing expenses and revenue that are starting to slow down, not only at Valoraim, but other source of revenue, key funds, they are still growing, but growing much less. How that balancing act puts it on the spot and puts you on the spot about millage rate. My concern is that we tend to feed the beast and grow government.

Corporations in the private sector, my experience shows, also do that. They try to not do it. The idea is we need to look at how not to increase the millage rate and the added fees because the millage rate being constant for eighteen years at $41,001.93 ignores the debt services, fire fees that I see on my tax bill at the end of the year and that everybody has to pay on top of it, which add 1.4371 to the millage rate. So being constant for eighteen years, by the way, when the '19, sorry, updated, when the market grew 219% in taxable property value is sort of deceptive, I would say. So let's be honest, Commissioner, to answer your question, we're trying to look at, the best advice we can give this commission, and probably in June, we'll be a little more ready.

In terms of what about we don't increase the millage rate despite the challenges to bridge the gap between growing expenses and revenue being slower? And how about giving the residents possibly a partial relief combined with maybe some efficiencies and some budget cuts. I know people don't like this term. I agree with Commissioner Erb that sometimes you have to be the conversation, the wording is something, it's marketing. The reality of things can be a little harsher.

But we have to be pragmatic. You have to be pragmatic for our residents. What I hear a lot from District 1 and from other districts because I try to listen to all constituents, and you probably have the same feedback, is that it's harder and harder for a middle class family to afford Port Lauderdale. We're not the Monte Carlo of Florida. We can't be.

That's not our social demographic profile. Half of our it's one of the tasks that we had during the Bab. Half of our population, more than 100,000 people, are in economic fragility, being senior on fixed income, or disabled, below the poverty line as well. We have that in our city. So it's nice that we market ourselves very well for developers and for events and attracting the crowds. But the reality is if you put more burden on the residents for electricity, water

Well, are you suggesting that we reduce taxes, the millage rate?

The suggestion was let's look at both ways.

Well, I'm asking you. What is your statement? I don't have a

personal opinion. I'd like to stay with my board as a team. I think what we're looking at for you, and we'll be a little more ready in June, is how can we do how can we avoid the marriage rate increase that the gap between expenses revenue would create. And I think the leadership of City Manager Williams shows that she's been taking a hard look at this. Now if we add the component of City Hall in the conversation, that's also something we'd like to actually incorporate because it has huge consequences on that equation moving forward.

So I would encourage the City Commission to have the Board look at that as well and so we can be ready in the next couple of weeks maybe to present an executive summary and a recommendation based upon more focused conversation and also updates from the City Commission, including a decision for tonight. So that's how I would frame the work that we are doing for you and how we feel.

Okay. Great. Thank you.

Is that accurate?

You.

Okay. Yes. And just quickly, I think that's why we need we're going to ask for clarification as what you think as it pertains to the millage rate based upon Stantec's modeling as we go in the next couple of years. I know they always paint doom and gloom as far as our projections because they take everything into consideration of the what ifs. But a lot of times those what ifs don't actually happen.

I know, Mayor, you've commented upon that before. So there has to be a balance. And I don't think we necessarily yes, we like taxpayers would like to see reduction, but is it even feasible to reduce the millage rate? That's the big question without having to take dramatic cuts to do that. And I don't think that people of this community are ready for that yet.

That's just my personal opinion talking to people. They're pleased that some of the levels of service that they're receiving now. And we always did plan on a new City Hall. I can remember coming on my first year on the budget board when we were talking about the joint government center. And, you know, we heard a price tag just a share of Fort Lauderdale is 400,000,000 and now we're below that and That was five years ago. That was five years ago. And there's and now there's uproar. I mean, would we have financed $400,000,000 What would that have cost

That's why we didn't do it.

That's why the whole the whole equation has to be communicated to the commit community.

Thank you, Bill. Does that complete your comments, Pam?

It does. Thank you, mayor.

Okay. Commissioner Glassman.

Yes. Thank you, mayor. Just to say thank you for all of the work that you do. It's really greatly appreciated. This is a good beginning. I think we're going to probably be able to just dig in a lot deeper at our June 16 meeting, I believe, meet because by then we'll know a little bit more about what's happening in Tallahassee. And I think that's when we're gonna really start to roll up our sleeves after we see what happens. If anything, I'm not predicting anything's really gonna even happen. In terms of property taxes, I actually think nothing's going to happen.

Well, we all have been reading in the news that there's going to the governor is going to convene a special session and I don't see property taxes one of the topics. Has anyone else seen differently? It's been vaccinations. It's been So may I stuff and Well,

I'm fully vaccinated, so I'm not really

paying attention to that. Good.

Because I sit real close

to you. Yes. I I wanna make sure that I

You have

you had measles? I've had every shot you can think of. In fact, I actually did go get the measles shot a few months ago because how crazy is that?

Right.

We eradicated that disease. Yes. Actually did go get it because my doctor said go get a measles shot. It's crazy what's going on out there. So I said thank you very much and I went and got a measles shot.

And redistricting, that's the key. Yes. That's the only one scheduled. Yes. And the couple additional issues that my conversation just last week with representative LaMarca.

Right. So All right. Again, I just want to say thank you. I look forward to really digging in a little bit deeper at our next meeting when we have a little bit more clarity about what the whole picture is. Thank you.

Okay. Vice Mayor. Thanks Mayor. Vice Mayor. Yes. Hey, hey.

Thank you Mayor. Thank you Chair Brown for your work and thank you for the whole BAB for your work on this. Completely agree with your suggestions about really evaluating City Hall. I think that makes a lot of sense. And as we think about tonight the interim agreement for City Hall that we're going to be discussing, have you all as a Board talked about that interim agreement at all?

No. Okay. So I think that's a real opportunity to talk about that because I think this could be this is a big financial commitment as I'm sure you're aware that the interim agreement what it requires. So would that be something you all could give us feedback on before we make a decision on the interim agreement? If that is the direction of

the commission, we serve at your pleasure to do that. You know, historically the BAB has never engaged in P3 projects, public private partnerships. That is the role of the city commission. We only look at it after the decisions have been made as to the financial and budgetary impacts that those P3s will have on that budget as we develop the budget for that particular coming year and future years. So that's the only role the BAB has played when it comes to P3s.

Laura might have additional comment.

Mayor and commission, Laura Reese. In the past, the city commission tasked the infrastructure task force with both the clean water plant the reimagine city hall. So we don't typically bring an item to both boards. But at the time, financing was being discussed on the water plant, then that piece came to the BAB, where they weighed in on, you know, having level service debt versus wraparound debt, things like that and what the cost would be. So the BAB did weigh in on the financing piece of the water treatment plant, but not on the project itself.

Okay. Great. So the BAB has weighed in on P3 financing, it sounds like. Okay. Which I think makes a lot of sense.

At what point in time was that in the p three process for those?

So I've been here a lot of years, so they get a little blurry. But it was after there was an agreement and we were trying to figure out the financing piece.

After the comprehensive agreement was signed or the

interim agreement? I would have to check, but it was at the time we were trying to engage with our our financing folks because we were doing a lot of the financing on our side for the water treatment plant. And we are trying to structure the debt to figure out if we are going to do wraparound debt to keep our payments lower or to reduce interest rate over a long term period by doing flat level service debt. So those are the options that were presented. It wasn't whether or not to do the project. It was how to finance the project.

But that was so that was after the interim agreement was signed?

I I believe it was. Okay. It was it was after we were trying to figure out how to secure our financing.

Because we have maybe ten months between an interim agreement and a comprehensive agreement to work out all those details. Correct?

I would not be the one to speak on that, but

There was quite a time gap. Right. Yeah.

Okay. Thank you.

Thank you.

And another example on that particular project in this year's budget, the 2026 is where we had to look at hiring the additional, I believe it was 12 technicians to run that plant. So that's an increase in the budget salary full time employee FTEs full time employees that we have to weigh in. But that was built into this year's budget based on the final agreement that the city entered into on the master agreement.

Yes, think thank you. I think weighing in before an interim agreement is evaluated makes a lot of sense for me in the BAB world because you all you think about department costs, you think about financing options, as you talked about revenues, expenses. So that lays the foundation for evaluating interim agreements, comprehensive agreements. So in my mind, the more we can get you weighing in earlier, I think the better. So it sounds like you haven't done that collectively. Chairman, have you evaluated the interim agreement just as an individual member of the BAB?

I just saw it in the backup material this weekend and just waiting to see discussions this evening.

Okay. So you don't have any individual thoughts or analysis?

Not as Chairman of the BAB. I have been involved in retrofitting and repurposing and rehabbing of old properties and they're a nightmare. They have been personally for me. New construction, if we can get the cost down and figure out how to do it, you're not losing already a thirty or forty year lifespan on a project that's not you have to factor in. It's great to say that we could take a building and make it fit, bring it up to date, but it's still a forty year old building, thirty, forty year old building and you have to deduct that from the life expectancies.

Are my personal opinions. There again, we take our direction from the commission and we look forward to whatever actions taken tonight in your direction, we're here to serve.

Okay, great. Thank you. I'd like if I could just talk with each BAD member to kind of ask the same question similar questions. Whoever you want to go ahead, Olivia. What's the question? Yes. So I want to hear a couple of things. One about their view on the interim agreement as it impacts the budget and their service as a Budget Advisory Board member and any feedback they would have for us as we consider this matter.

I don't think that's appropriate at this time.

Oh, why

why is that? Because they haven't well, first of all, they're a board. Now you're gonna ask each of them to speak individually before they weigh in. I I almost find that that's not their role as a board member at this moment in time. Okay. I think I I just don't find it appropriate at this moment in time to ask each one of these people personally to step up then. What is the purpose of that?

Oh, the purpose is because these are experts. Right? These are budgetary experts that work with our city department regularly. We just heard from mister Olivier sharing his perspective. So they just have a wealth of knowledge and information. I

agree with either of you, but if I could ask the city attorney, my understanding of the interim agreement is the next step that the city would take in order to further investigate the costs of the project because their numbers aren't in the interim agreement. So do you want to explain to the commission the intent of the interim agreement? Is it a budgetary agreement or is it a contractual agreement in which the city would then investigate the expense and the cost recovery for that?

And the scope of the project?

Yes, Mayor. So the interim agreement is intended to utilize that timeframe to negotiate a framework for both a project, the funding and financing of a project so that the parties could come to a conclusion that it is ripe for moving forward and making that decision to move forward. It is not final. There's an outline of finances and costs and financing, but that is not final and can be further vetted. And ultimately a GMP would be determined for the comprehensive agreement. It's a structure done through analysis which is sufficient enough for the parties to determine whether they want to move forward.

So based on that, think it's a fair question to any member of the Budget Advisory Board to even respond to that when there's nothing concrete in the interim agreement. I know you're trying to go with this, but I don't know if this is the right time to be asking that question. But Thanks mayor. Any member of the board can respond if they want. Okay. Have to stand up by the microphone.

I'd say it's think it's gonna

be tough as a board member.

As a constituent, that's different. I'm not going give my opinion right now because I don't I just don't want to. But as a Board member, think it's tough. I do appreciate it, Ben, Vice Mayor. And then as a Board, don't know, we supposed to convene and give you an answer by tonight that might be tough because we can't do that in an official capacity. We might have missed the ball on that one, but I think that's where we're at. Answering as individual, I think we'd rather do that tonight. And then as a Board, I just don't know if it makes sense individually. I'm not supposed to give my opinion individually as a board member. So that's where I'm at.

Okay. Thank you. Yeah.

You can't talk from your seat if you can come up by the microphone. Yeah.

Yeah. Of course, of course. I think it's a matter of reframing the question properly, and I would not answer as an individual. But I think the affordability factor for this project and its financial impact on residents makes the Bab particularly relevant. It's not an infrastructure angle, it's an affordability angle in light of all the pressures on the budget that we went through for fiscal year twenty twenty seven.

So I think that's where we would focus our energy. And if you wish to listen to that, we can probably prepare something very quickly. I started doing something on the big numbers, not to the intricacy of what is going to be voted tonight, but I think there are some elements that the Board can look at, very simple numbers. OMB has provided a lot of useful materials to us in the past week. And for as far as I'm concerned, I spent half my weekend reviewing them and getting together some elements that I'd love to share with my board members. So that's where I would frame the bag.

Okay. All right. Thank you.

And Mayor, not to kick the can down the road here, but the month of May, we meet three Wednesdays and we just bring all department heads in and those meetings last well into three hours. So if we're tasked with doing this, we'll have to have a special meeting to fit into the schedule devoted just for this and it has to be duly noticed to the public and to say two weeks I think and looking at and we'd have to look at everyone's schedule on the conveniency of our board members because they've already figured out their calendars for the month of May. I think very short two week. To say it's impossible, I can't say that, but there's going to be some challenges.

Okay, thank you.

Thank you. So the interim agreement just so we're all clear, it locks us into upwards of $18,000,000 or more commitment to the builder, right? Does this lock us into anything, City Manager?

So the interim agreement speaks to potential expenses for predevelopment work, which could be up to that $18,000,000 figure. Also Section 14 of the interim agreement speaks to the financing of the project.

So it's not $18,000,000 per year, it's $18,000,000 for the predevelopment costs, correct?

Correct.

Okay. Up And

so Section 14 of the interim agreement speaks to project financing and how the developer would participate in the project in terms of equity and a rate of return.

If at all? Correct. If

we move forward with the project that's included in the interim agreement.

Right. And

if during city manager, if during the interim agreement we would decide to go in a different direction, what's the ability for the city to do that?

So for each month of the interim agreement, we anticipate that there will be costs incurred on the part of the developer, which the city would be responsible for. There are various, termination provisions that speaks to what the city would be obligated to compensate the developer for throughout the term of the interim agreement up until that point if there were to be a pivot by the city during the term. So I think that the up to number really focuses on what the developer is going to be producing on behalf of the city to advance the project from a predevelopment perspective. But the obligation of the city would be determined based on what the milestones are and what timeline we're on, during the term of the interim agreement.

Vice Mayor, could I ask a clarifying So I want to go back and I'm not sure if this is a city attorney question or a city manager question. So city attorney, you said we're going to be negotiating various aspects of this agreement between the interim agreement and the final comprehensive agreement. Does that mean this was like a Chinese menu where we get to pick one from column A and two from column B. So if we don't like for example, the private equity portion of this deal, we can strike that out and still move forward with the building and everything else. We can strike this component, but move forward with this or if I don't like the O and M component, I could strike that and move forward with the rest of the lake. How does that work?

Do you want to respond to that? If

I may, at this moment, the project contemplates the developer participating with sub consultants, the contractor, the architect and so forth. The way that the deal is crafted today incorporates developer equity, which based on the way that the deal has been constructed, in my opinion, would not be on the menu of options for the city to deviate from based on what's in the interim agreement.

It's a take it or leave it deal?

No. If the commission wanted to direct staff to go in another direction, it would require the interim agreement to be revised substantially to account for that change in direction.

Thank you. And just so I'm clear, the developer equity piece that you all are talking about is the use of from the developer $24,000,000 that we would pay a rate of return of 11% on that $24,000,000 Is that am I saying that right?

11% post tax, yes.

Post tax? Point 2%. 11.2%, which again we could as a city go to the marketplace and get that same $24,000,000 for probably around 4%. Is that am I saying that right, City Manager?

I believe our team has investigated it and it could be anywhere around 4.5%, but that number could fluctuate plus or minus, but around 4.5% is what we've determined.

Yes. So the life of the thirty years then if we go with the developer equity, which is paying a 11% rate of return to them when we could be earning a 4% is over $90,000,000 to the developer for the life of the term for the use of their $24,000,000 when we could get $24,000,000 at 4.5%?

Well, first of all, those are very good questions. Don't know if this is the appropriate time during a budget workshop because we're not talking about specifics with regard to the financing of City Hall. I think it's an appropriate question. And the reason why I want to stop you here is because the €90,000,000 while it sounds like a lot of money, we haven't really had a full throated discussion as to what that represents. What do they do with that €90,000,000 What does it represent?

What assurances does it give the city? Or should we just excise it completely, which I personally have no problem with. But that's an opportunity tonight when we're discussing the as Commissioner Herb said, it's a Chinese menu. We have an opportunity to discuss those tonight and figure out what we want to include and what we don't want to include. But I'm not sure if it's appropriate here at our joint workshop.

Mayor, do you agree that the Budget Advisory Board should weigh in on the city hall project before the interim agreement signed? Before an interim agreement signed? Committing us to the upwards

Well, of eight the timing I mean, to my you know, the way I read the interim agreement and my with the city attorney and the city manager, it's after we sign the interim agreement that we start chiseling down on how we're going to how much the building is going to cost and what streams of income or money we can tap into in order to pay for it. And that's when the Budget Advisory Board would come in handy to advise us. I think it's premature right now. We can't go to the next step until we have the interim agreement. So everything kind of stops until we have the interim agreement.

We can't move forward with it. That's my understanding. Is that correct?

The interim agreement would allow the developer to be compensated for any predevelopment work. It should be noted that the developer has already at its own risk, begun that predevelopment work with looking

at the

you answer my question though? Can you answer my question? My question is, is this the do we need to enter into this particular agreement in order to be able to start pricing out the cost of the building, is that part of the developer's work that you're speaking of?

The developer has already begun that work on a preliminary basis and provided staff with some cost estimates based on their initial preliminary exploration of what the cost would be for the project. Said cost estimates have been shared with the commission in the agenda item for this evening. The interim agreement would engage the developer in the city more formally in that process where the developer would continue to refine and advance the work required to come up with a guaranteed maximum price or a fixed price. The developer is working in coordination with the city on various methodologies to refine the space programming of the project as well, which will help to influence the overall cost for the project and the estimates that we would further generate and develop during the interim agreement process.

Mayor, if I might, I just wanna add to this conversation the reason that I feel it's a little bit premature for the budget advisory board to be doing this work. I think we should be following the process that we followed, for instance, with the water treatment plant. I have already had discussions with staff and I think that another reason it's premature, we don't really know yet what kind of payment structure we're looking at. We are not locked into this number of $24,000,000 for thirty years. There there are other structures.

There's thirty year structures, forty year thirty year fix, forty year fixed, thirty year escalating. We could start at a lower number and then that that adjustment happens to two and a half percent a year when we know that our revenues are climbing, when we know that we're maybe in a better position to pay more. We have not flushed that out yet. So I don't think it's fair to ask the Budget Advisory Board to weigh in on those financial aspects of this because we haven't even decided yet what we are looking at in terms of a payment structure. There's lots of options out there.

Again, that work that work happens between the interim agreement and the comprehensive agreement. And that's when I think we engage the Budget Advisory Board in those discussions when we can actually have them give us that input when we are asking those questions, what kind of payment structure do we want and then looking at all of those options. So again, I just think it's premature. Thank you.

Only problem with that is that the meter is running on that $18,000,000 development cost the whole time we're doing that. So it doesn't come without substantial cost if we decide to make any changes.

There's a cost to everything.

The Vice Mayor has the floor.

Thank you, Mayor. Max, I want to give you the opportunity to speak. Everyone else on the board has a chance to speak if you'd like to share whatever. Thank you.

Thank you for the opportunity to speak. I stand in alignment with my fellow Budget Advisory Board members. I think a point that I wanted to make, it's it's not a question of whether a new city hall, is appropriate long term, but whether committing to the structure now, without a full side by side analysis of all the viable options and a comprehensive thirty or even to Commissioner Glassman's point, forty year fiscal impact and what is the most responsible path. I also want to make mention that separately outlined in the interim agreement, Citi would be responsible for reimbursing predevelopment costs even if the project does not ultimately move forward. And I think that that just, introduces a level of financial exposure, before we're fully defined the final structure costs and the alternatives there.

Well, but Max, you can't figure out what the final structure cost is until you figure out what you're building.

I agree. I agree with what you're saying. I believe that currently in the environment from a constituents perspective, it doesn't exist in a vacuum. It just comes at a time, unfortunately, without anybody else's control, that we're already projecting budget pressures, entering collective bargaining agreements and facing uncertainty around potential property tax reform.

Okay. Thank you, Max. Appreciate it. And I think, Mayor, the majority of the commission has given the builder clear direction on the size of the building and city manager correct me if I'm wrong, but what the developer or the builder is working on is 200,000 square feet building, is that right? Approximately, yes. Yes, 200,000 square feet. The total cost is already calculated and analyzed in terms of where they are right now at $267,000,000 I think, is that have that right?

That is the current estimate. However, that number could be further refined up or down, but that is the current estimate as of today.

And that's the concept B that the city commission majority of city commission said this is the way to go. That also includes very structured financing that the commission has supported, which is having this developer equity paying them for money that we could go out into the marketplace and get. So that's a core component that gets to the $267,000,000 Another core component is the developer's fee that has been included in this as well. So the deal structure has been largely supported by the commission to this point, advanced to this point and the builder is in negotiations with the city to formalize all those very specific components. So we're not at early stage of kind of figuring out what we're doing.

This is very much along the path towards completion at this point.

Well, don't know who told you all that, but none of that is true. The reality is that the whole purpose of the of tonight's discussion and the reason why we put it on the agenda is to be able to make that decision whether or not we want builder equity, whether or not we want to do longer term financing. There are components in there with O and M, for example. The O and M cost includes insurance. Well, we're self insured, so that too would have to be refined.

So all the things you're talking about, that's the reason why we have to enter into the interim agreement to be able to refine the numbers. So the city manager said it can go up or it can go down. Yeah, well that she's just covering herself and saying that, but there's a reality here. We started out with $400,000,000 ten years ago, all right? And then it went down and then it stayed that way until about five years ago.

And then we decided to part company with county. And now and then when originally approved this deal, it was a $330 and now we're down to $250,000,000 So I see a trajectory in the right direction. And so trying to put a dystopian view on this process, think is only working across purposes with what the intent of the commission is and that is We live like gypsies. There's offices there, there's offices there, it's totally dysfunctional. It's not it doesn't help the work environment.

It's very difficult for staff to coordinate services. And I just think that constantly putting roadblocks in its way is not in the best interest of the city. So tonight is an opportunity Ben, if you want to bring up these things, I'm not I personally am not adverse to sizing some of the components of it as we go forward. Wasn't enamored with some of these things, but that's what the whole point of tonight is concerned. But the point of this budget workshop is not to dissect the components of the City Hall project.

That is something we can certainly assign the Budget Advisory Board to work with us and to try to come up with the best numbers, the best financing approach and the best sources of income. During my discussions with city staff in the last couple of weeks, we discovered a whole lot of income sources. We found out that our pension obligation bond is going to expire in 2032. That's almost I heard numbers between 14,000,000 and $20,000,000 every year it's going to come our way. There's PFAS money that has yet been spoken for almost $10,000,000 I mean, we haven't even begun the process and that's why we need the Budget Advisory Board to participate with us and at the same time we need the contractor to be able to tell us how much it's going to cost.

So by the time we enter into the comprehensive agreement, we have a guaranteed maximum price. That's how we do things. We've done it with every single project that we had at P3 project, whether it be stadium, whether it be the pickleball courts, whether it be even components of the aquatic center. Everything we've done has been in the same pathway of trying to get things done and has worked excellently so far. So I know there's a lot of talk out there, there's a lot of misinformation out there, but Vice Mayor I don't want you to be the source of misinformation because I know your heart's in the right place and we all trust one another, but we have to make sure that the information that we have is consistent with what the information is that we're being given by staff.

Thanks Mayor. I'm confused as to what is misinformation that I'm sharing. What number? Is the $267,000,000 misinformation? That's not a final number. That's the current number as it stands right now, Mayor. That is accurate for where it stands right now. Is that correct?

It's not the final number.

It's the current So that's current. So that's correct. Mayor, what else is incorrect in your view?

I just I named everything when I spoke earlier. I'm not gonna repeat myself, but, you know, you have the floor.

You know? No. I'd I'd like to hear what else is incorrect.

That this is appropriate conversation at the time for tonight's hearing.

Yes, it is.

This is not the time to waste these people's time. This is volunteer. Want to participate, but now is not the time for them to be able to respond to something they don't even have in front of them yet. They don't have any facts and figures yet and you're asking them to give them an opinion as to how we should move forward. I mean how could we? We don't even have it in front of ourselves. It's up to you. You're entitled to ask whatever questions you want.

Thanks Mayor. So do you agree it sounds like that the Budget Advisory Board should advise us on the interim agreement?

I do agree.

Okay, great. So I agree too. So can we have them and analyze the interim agreement and provide us feedback and guidance before we agree to the interim agreement. That's

a discussion we can have tonight. It's not a discussion we can have right now.

All right. Great. Well, look forward to talking about it tonight.

Vice Mayor, in regards to that review, because we're going to suggest amendments I'm sure tonight. So that includes that opportunity with what they receive would be what we're adding to it is what I'm hearing from you and that's what I am in agreement with.

Great and yeah and again I just I would like the Budget Advisory Board to analyze what we're suggesting before we commit to it is my suggestion for the interim agreement. So in other words tonight we can have a great discussion what we like don't like then I think we should send it back to the Budget Advisory Board for their evaluation. They might have things we aren't thinking of and then we can make it just a better agreement with all that input.

So what I am hearing and understanding is before we take take a vote, say tonight

Yes.

They would review it.

That's what I would like, commissioner. That's what I'm understanding. To make sure we got the brains, the full brains on board. Yeah. Thank you. And I would

and I would predict if that happens, there'll be another reason to continue to not move forward on the project. Alright.

We'll see what happens. And I

just wanna add some comments to this by the way, mayor. For the record, I don't think that staff is dysfunctional because they're in more than one building. So I've worked with staff a lot longer than you have. I work with staff every day. They're not dysfunctional because they're in different buildings. As I have said repeatedly, when you have accounts payable in one building and IT in the other building and HR somewhere else, guess what? They don't work together on a daily basis. It's not dysfunctional. This is how all of corporate America works. I deal with corporate clients every day. Guess what? I've got an IT department that's in California. I have staff in my accounting department that's in The Philippines. I've got a chief of staff that's in Dubai. You know what?

We work pretty well together. So this concept that people all need to sit in each other's lap to be able to get everything done is not how the world works. So and one last thing, you didn't find money in the pension obligation bond. I knew about that because I was here when we did it and I know exactly when it was yours. Thank you.

Okay. Anyway, does that complete your comments, Vice Mayor?

Yes. Thank you, Mayor.

Appreciate So I just have a couple of questions. Bill, the first thing you said is, we need direction you need direction from the City Commission as far as the millage rate is concerned. So obviously that's putting the cart before the horse because we don't know what the components of the budget are going to be to understand whether or not the millage rate is going to be compatible with the expectations of what our budgetary requirements are. But from the get go, personally, I don't want to raise the millage rate. I think we've got sufficient funds.

We have new construction coming online this year, which will augment the 7% increase in valuations that you spoke of. And so I know we've been able in the past nineteen years to always be able to close the gap. And aside I'm from any conversations regarding City Hall or anything like that, just seeing what I have seen so far, I think that we should be able to have a balanced budget without cutting services. So but again, as far as the millage rate is concerned, I think that decision will be made when the decision has to be made, but I don't think there's any appetite on this commission to try to increase the millage rate. But again, that's just my opinion.

I think that was anticipated anyway. So

the discussion regarding artificial intelligence, that's a very esoteric conversation that I think we've always included new technologies in our city operations over the years. I know we've spent lots of money in the development services department, for example. And yet I heard Jeff Bezos say a few weeks ago that if a person submits a building permit to do some remodeling in their home, should have they should put in their application and ten seconds later they should have all the comments back, which of course makes no sense because there's always deficiencies in the applications and there are always things are unable to read. So at some point he'll understand reality, but I know our city staff is vigilant and does its best to try to respond to applicants who are trying to do work in our city. As far as Tallahassee is concerned, it's anybody's guess what's going to happen up there because I don't see the issue of property tax reform being making headlines lately.

I too agree with those who feel that it's just not going to be a topic this year and we'll probably not have to deal with it this year. It doesn't mean we won't have to deal with it in future years. And frankly, I think that the homestead exemption, I don't know how many years it's been since they raised it, but it's been a long time. And I know that when houses used to cost $250,000 a $50,000 homestead exemption meant something. But now the houses cost $607,100,000 dollars a $50,000 homestead exemption doesn't have the same impact.

So but those are discussions that we all can talk about and try to figure out how to incorporate those changes in future budgetary proposals. So going forward, we'll ask you to continue to work with our city staff as we try to cobble together the priorities of the city commission and see what we can accomplish in the next fiscal year 2027 and see how we can make sure that we don't reduce any of the services if we can possibly do that. I think our city staff, our police, fire, parks and rec, everybody have they do an amazing job at keeping our city safe and clean. And I know that it's always a challenge each day. We have I believe it was brought up by you saying that we don't just take care of

our own people, we have to

take care of everybody else who commute into our city, who visit our city. The problem is all these people that visit our city, we don't get a nickel of the hotel tax, right? Correct. Unlike Miami Beach, which gets, I think, all of it. So we're kind of having to take care of a population that comes to visit us without really being compensated for it.

So that's always been our role and we've always welcomed visitors and it keeps the economy going, but there's no direct income source or revenue stream coming from folks that visit us only to the extent that we get a percentage of sales tax on things that they purchase here. So and as far as the commuters are concerned, I jokingly said we should put a toll road on Broward Boulevard, but of course we can't do that. But Bay Harbor Islands has That's their I heard yesterday that was their main source of income. So but anyway, moving forward, again, I echo the sentiments of everybody on this commission. We thank you for all the great work that you folks have been doing and will continue to do with us.

There's a lot of talent on your board and we're blessed to be able to experience the decisions and conclusions that you come to. So moving forward, you're welcome to attend tonight's meeting, especially with regard to the City Hall discussion and we'll see where that takes us. Right. Anyone else from the commission have any questions?

So Mayor, just to recap, we hear you clearly on the millage rate. You're pleased and we'll keep moving forward on your direction on priorities from the earlier of the year workshop. You'd see no additional resources needed. And can we and will you be open as we move forward into this budget process to look at if we have to do some reductions in services. As we know solid waste is increasing dramatically on solid waste trash pickup.

So if there's ways to be more efficient, would you consider we're paying now for heavy trash pickup in residential areas where commercial and condo buildings, they have to haul their own refrigerators away and the owners have to pay where if you live in neighborhoods, you get it for free service. So there would you be receptive if we have to come in with some ideas as we move forward, not only for this year but future years on suggestions on things like that. Bill correct me if I'm wrong, but aren't those utility services paid

for through a utility bill separate from the tax bill? So like garbage collection, water, sewer, that's all separate and apart from the ad valorem tax. So there's a different revenue stream.

That's correct. But we can give input on those funds.

Okay.

Because as I drive through the neighborhoods on heavy trash pickup days, it's really got out of control. I mean, I went by one house the other day and they were filling up a whole dumpster and that claw machine was just filling up that back of that truck of all the furnishings of that house in that renovation.

Must have been a tenant that moved out or something.

Yes. So but we will continue to always bring ideas forward to this commission and we serve it your pleasure.

Okay, great. We have one person who signed up to speak, Ted and Sarah. Anyone else wish to speak on this? My meter's gone.

I'm gonna count three minutes. Oh, yeah.

I just got a little bit One, two. My name is Ted Esarra. I'm the president of the River Oaks Civic Association. Some great discussions. I don't need I don't mean to dumb the conversation down, but here I am. You know, I hear so many all the talk about the big items, the, the city hall tonight, clean water plan, hall of fame pool, parking garage, police station. But my role, and I I like to think of it here in the city is the neighborhoods, to keep watch on the neighborhoods. We're talking about reduction reducing some services. You know, our our streets I ride my bike all around. Our streets are in very bad shape.

You know, they need to be some resurfacing. I know Laura Reese was talking about some of the money we got from the state where it equaled out to be, if I remember, about 25 miles worth of road improvements. Well, you know, we we concentrate on 3rd Avenue, Andrews Avenue, the big the big streets to get resurfaced, to get redone, but our our small streets in the neighborhoods are really crumbling and are really, really need to be looked at and can't be forgotten for just the big ticket items. I mean, especially if it rains and it's floods and there's so many potholes, you can't really see the potholes because they're covered in water and you don't know. People are walking, people are riding, and all of a sudden, boom, they're they're in a pothole that they never knew was there.

So we just let's just in in the in the era of the big ticket items and the big items that were the city is working on, we need to really make sure that we take care of the neighborhoods as far as streets go and traffic calming devices in those areas. We can't overlook that just for the big, big ticket items. Thanks.

All right. Great. Thank you so much. Anyone else wish to speak? All right. City manager, do have any further comments?

Nothing further. I just want to say thank you to the Budget Advisory Board and to the Office of Management and Budget for their continued efforts to push our city forward. Thank you.

Great.

This workshop's concluded. Thank you.