City Commission - Regular Meeting

Good afternoon, everybody. Welcome to the Delray Beach City Commission workshop budget workshop this Tuesday, May 19. If the clerk would please call the roll.

Deputy vice mayor Markert? Here. Commissioner Molica? Here. Commissioner Cassell? Here. Vice mayor Barnes is absent. Mayor Carney?

Here. We have a quorum. Thank you very much. I'm gonna the the first part of our meeting is is public comments. If there's anybody here, members of the public, wishing to address the commission on the items on this agenda, which are the preliminary budget discussions of public works, utilities, the parks and recs with the also overview of zero based budgeting. Now you would come up and speak at the lector. You will each have three minutes. Please give your name and ZIP code for the record.

Okay. My name is Pauline Hutchinson. My ZIP code is 33444. How is everybody?

Good. Perfect.

This is my first commission meeting, so this should be fun. I live at 243 Southwest 3rd Avenue, so I'm right on the corner of 3rd And 3rd

Yep.

And right next to Block 48. Now there's been a couple of things that are taking place at the park, Block 48, and

I'm sure. Are you are here talking about the budget? Yes.

Okay. Because

Okay. That's all. I'm just making sure because otherwise you'd I'd I'd say you're through that's fine.

I think it's a budgetary concern because at some point, there was a certain amount of money that was spent to beautify the park. Okay. Plant grass, plant new trees to make it look beautiful. But recently, there has been, fencing installed, and I'm not sure if that's in the budget. Is that a part of the utility budget and parks and recreation budget we're gonna talk about today?

I I well, we're not we're we're not doing we're doing parks and rec, but I don't know that we're doing specifically that that line item.

So would it have been a part of the previous approved budget if there's money being spent

to Any money that's being spent is part of a budget but I'm not sure this is

Let the city maybe the city manager should address this. So

as part of the operations budget as well as a park improvement program, we would have made some commitments along those lines so we can follow-up with you regarding those specifics the purpose this afternoon is to give an overview relative to initial proposed budget considerations for the upcoming fiscal year so we'll be happy to follow-up in that regard and offer you some more specifics in terms of what the improvements shall be.

Well, it's not being improved. It's actually gonna be destroyed with heavy equipment parking. So I just wanted to know if in this budget, if there's a budget for refurbishing the park after it's done, or would that be something we discuss later?

Can I give you

a pen and paper? You can write down your number, hand it to the city manager, he can contact you.

Okay. Great. Thank you. But an answer

to your question We're different. Mister Mitad, why don't you just go with mister Mitad in the back of the room there? He's head of parks and rec, and he can answer your question.

Okay. Cool. And where would I find a copy of the proposed budget that's gonna be talked about today?

There's in mister mayor, if I may, please. There's initial information being published however the actual proposed the balanced budget recommendation coming from the office of the city manager working with all directors will be assembled in July that is the prescribed time frame we are here to discuss a preliminary overview we began that two weeks ago and we have a couple other workshop meetings in which we will talk about that but the actual proposed budget recommendation is anticipated in mid July and there will be a workshop meeting devoted for that purpose

oh I see so comments part of this is not really to comment on possibly getting things on the budget, but this workshop is more to discuss what you want to put in the budget? Just so I understand, it's my first

That's a fair observation as you just described.

Yes, ma'am. Okay. Great. May I have my pen back?

Oh. Thank you. I was leaving it here.

And miss, if I would just say for for from all of us, if you discover hurdles, email us.

Okay. Perfect. Thank you. Thank you so much.

Are there any other members of the public wishing to address the commission? Seeing none, public comment is closed. All right. The preliminary budget discussions, you would like to take the floor first to discuss the zero based budgeting analysis session?

Yes sir. Okay. And this is just a few minute overview in terms of what the purpose of this exercise is all about. We initiated direction to engage in a zero based budgeting approach somewhat modified and much of this is a function of best practices in this regard working closely with the Government Finance Officers Association and other sources to get us to that place so really to briefly offer clarity in terms of what the model looks like and what it is we're involved in as a municipality so that everybody is understanding in terms of why we are where we are so next slide please I did not grab the remote so please assist and if we can connect the iPass to it as well, information technology. Thank you.

So historical context of zero based budgeting. The original textbook version of zero based budgeting became popular during the late nineteen seventies. Traditional zero based budgeting required departments to rebuild and justify every budget line item from zero each fiscal year. Over time, governments and organizations including private sector organizations found the full model extremely time intensive and administratively burdensome. Modern organizations really use the original textbook model in its purest form.

Today many governments adopt modified or streamlined zero based budgeting approaches that focus on new strategic review service levels and major cost drivers. This practical evolution preserved the benefit of zero based budgeting while improving efficiency and operational feasibility. Benefits of the modified zero based budgeting approach it encourages evaluation of spending priorities without disrupting operations supports fiscal responsibility during periods of financial constraint provides flexibility to adjust service levels based on community needs, balances strategic decision making with practical implementation realities, allows departments to justify significant expenditures and identify efficiencies. Next slide please a full textbook zero based budgeting model is rarely used in this practice the city of Derry Beach's approach in this regard focuses on practical and efficient budget review rather than rebuilding every expense from scratch the modified approach reduces excessive paperwork and administrative burden it allows management to focus on key service levels cost drivers and strategic priorities this method improves transparency and accountability while remaining operationally realistic. The approach aligns with recommendations from the Government Finance Officers Association research on modern budgeting practices.

Next slide please. And that concludes the general overview and in essence ladies and gentlemen, the approach that you've experienced during the May 5 workshop meeting as well as for departments of public works utilities and procuration today the different specific categories is consistent with the overview I just provided in this regard so again in response to a couple specific observations that you communicated with me in recent weeks, I thought it was important to offer this overview to provide clarity and content context as to why we are proceeding in this realm. So, again, as each department director who spoke during a May 5 engagement outlined the different categories as to why we are where we are and the basis for consideration to also be experienced this afternoon by leadership of public works, utilities, and parks and Recreation, it's in that context as to why we're proceeding in that regard. Thus, we were able to apply this particular approach to all of the larger departments as opposed to one or two per se because we are engaged in this modified approach. So with that, ladies and gentlemen, I yield at this time and I would like to invite Director of Public Works, Missy Barletto.

I have some comments.

Okay, please. First of all,

if you were going to use a modified zero based budgeting process and not go to traditional, it would have been nice to know that a couple months ago. Because my experience with zero based budgeting is the traditional. And when we were I requested it, my understanding was we were going to do the traditional. Because when you use your your current operations to build on the next year's budget, you are not doing it's almost impossible to find savings. It's almost impossible to find savings.

So, I mean, I am would have liked to have known that you were doing a modified approach, which is not really what I had in mind at all. But I don't know what the others had in mind. But having done zero based budgets myself and been involved in one a couple of years ago, so people still are doing zero based budgeting, I, I'm, I'm disappointed that we're not doing a real deal for zero based budgeting. Because as I said, you, you use your budget to build on the budget. You, you, it's almost impossible to find savings. That's my view. Are there any other comments?

I would comment as well. I, I've been asking for this since my first term but one of the problems I think that arose in the city is that my understanding was the city manager was going to look at two large departments and one of the best things that happened when we hired Mr. Martin and he and I sat down I said the thing that you could do for the city to serve them well is go through that budget and find you know savings and he was able to do that and I think it requires a lot of time and you know to do it plus keeping in mind that some of this salary stuff is locked in so the flexibility where is it but the problem is at some point or another I think Mr. Moore's understanding was he had to do across the board which creates almost impossible for the city to do that. So this technique that he's utilizing is because he's trying to do it across the board versus doing two large departments one year and doing which was what I had anticipated we'd be doing.

I thought we would maybe look at two large departments perhaps police and one other at this current fiscal year and then go on because typically what you see is a cycle like that and you know I would say to you I understand your concern and I share it but having asked for this for years and finally getting it I'm happy that we're taking steps to try and create this baseline and I think when we're done with this then we need to have that discussion about what are you going to do next year.

And that's a fair observation. I appreciate that, commissioner and mister mayor. Excuse me. I appreciate that, commissioner Cassell, mister mayor. And it's important to also highlight the experiences for fiscal year twenty twenty five, twenty twenty six, and the department the fire rescue department because, of course, that was driven by the fact that we were making a transition from 2448 to 2472. So that one singular department focus became necessary, not only essential, but imperative to get to a place in which we can accomplish that. So And I

would say very successful.

Yes, ma'am. Myself, working closely with the fire rescue chief Ronald Martin, who recently joined the organization, we had a chance to speak about the importance of engaging that regard, bringing in Henry Dakoas shortly thereafter. So we were able to collaborate and get to a place in which we can achieve balanced budget recommendations while concurrently executing the 2472 model. So in that realm, we did accomplish along the lines of what you talked about, mister Mare, in terms of the traditional zero based budgeting platform. But again, as I believe we talked about early on without getting into the specifics of what I outlined, the focus was to do what we can to cast the net in every department we possibly can, a number of the larger departments, and this modified approach seems to make sense.

So over the past two budget processes that for the current fiscal year as well as what's being proposed for 2627, we struck a balance in every regard. We did and some successful outcomes were experienced notably in the fire rescue department because again the transition from 2448 to 2472 necessitated it and we achieved balanced budget outcome without adversely impacting services. It was a great outcome. So working with us in terms of the modified adjustments that we just talked about for purposes of clarity today, I think it's reasonable as well. But the saga will continue as we continue to move forward, and I look forward to engaging with all concerned. So thank you.

Any other comments? I said I'd

have one quick comment. I'm I'm as I said in meeting number one, I'm not a fan of zero based budgets. That that is not my way to do it unless you're in a failing business situation, which I have been in my career. That that's when I would employ a zero based budget. So I'm I'm a little offside with the process. But but the outcome can still be fine based on on what you laid out. At the end of the day, for me, what is gonna need to be transparent for all the departments is what are we gonna keep doing? What are we gonna stop doing? That's the hardest one in any budget cycle. What are we gonna stop doing?

What are the things that are out? Because we will have new additions we have to make and we have to fund those. And, we're also in a a very gray period in the world right now where, I don't know what the inflation number is, but go fill up your gas tank, go to Publix and fill up your grocery cart. We're looking at something like seven or 8% right now, in my opinion, of a hole that we have based on world world events right now. And that's gonna put a lot of pressure on on our local budgets.

And then the last thing that I'll be looking for is, we've outlined a lot of strategic priorities up here. Some of which are already underway that we're going to have to pay for. Some are new that we we've been discussing. We have to decide what we're going to do on those. But all those things are going to have to come out, and come out really clearly. And like I said, I think this budget this year is going to be very challenging, given world events and the fact that we are going to be starting in a whole like every business right now. Compound that with the fact that Delray is doing pretty good right now. We're not like those businesses in the seventies that you described. You know, there were there were dark moments back then. We're not in that moment right now.

So we're we're on top, and we're trying to stay on top. Yes, sir. And that presents a whole set of unique challenges. So that that's what I'm gonna be looking for, mister Moore, as we as we go on, and I'm confident we can do that. And after we

hear from commissioner Molica, I'd like to summarize what the next steps are because it does address exactly what you're describing, mister Marker. Amen.

I would just say I agree with commissioner Casal that you would take one department per year to actually dig deep and take that time that I know it takes to try to find savings, but it would be impossible for every department to do it.

So ladies and gentlemen, my plan was to offer what the next steps are at the conclusion of the presentations that will be before you by the three department director leaderships so mr. Marker your commentary was quite cogent so I'll go ahead and respond now so we will have an additional workshop meeting, preliminary proposed budget workshop meeting to take place during your June June ninth session and in essence the city of Delray Beach, the office of the city manager and the Department of Finance working collaboratively will outline a number of scenarios based on expectations, based based on priorities, based on focus, so that we can achieve some sense of comfort level enabling me to have your direction to come back with a balanced budget recommendation the following month given the input that will be made available in that regard so exactly what you're describing that's the art of business in the next three weeks so we'll be we'll have several different scenarios to take under consideration inflationary pressures what the anticipated preliminary anticipated impact to property valuation might be as well as other data analytics and metrics to help us define the path forward so I deliberately scheduled June 9 for that purpose between 03:30 and five so that we can get to that place because your meeting calendar in the month of June are the second and the ninth of that day so we'll be able to utilize that time wisely and efficiently so thank you

thank you

so mister mayor if I may I'd like to invite leadership of the department of public works to please come forward to offer their presentation followed by leadership of the department of utilities as well as leadership from the department of parks and recreation and again thank you very much for your indulgence

Good afternoon, mayor and commissioners. Missy Barletto, director of public works. And I brought with me Cynthia Buisson, who's the assistant director of public works, who has agreed to be my button pusher today, alleviating alleviating all all of of you you from from that that responsibility. Responsibility. Okay.

So an overview of the Department of Public Works. We're comprised of 70 employees over 11 divisions, including administration, engineering, fleet, streets maintenance, parking facilities, traffic operations, beach management, street lighting, storm water administration, facilities maintenance, and stormwater maintenance. So each of these divisions are directly funded by the general fund, including administration, streets management, traffic, street lighting, building maintenance, engineering, and parking facilities. The garage fund, which is the operating fund for the Fleet Division, is an internal service fund. It's funded by allocations throughout department operating budgets, in addition to some support from the general fund.

The Beach Management Fund, while it shows up in the CIP program every year, does not have a dedicated funding source. It's funded by grants and appropriations from the state and federal government. When we are doing construction projects, the county contributes some of the funds for that, like the recent beach renourishment that we just completed. And those county funds come from the county's bed tax. All of the bed tax goes to the county.

And when we do a construction project for the beach, those come back to us in interlocal agreement. The storm water utility fund is funded by partially funded by storm water tax assessments. As you know, over the last few years, we have worked on increasing those storm water tax assessments to do a better job of covering because we have many millions of dollars of projects that need to be accomplished over the next thirty years in order to ameliorate weather changes that are creating higher water levels and more frequent flooding situations. And during this coming year, in the past years, we've supplemented that from the general fund also, what the storm water utility assessment did not cover. And this year moving forward, we're gonna be looking at doing referendum bonds and paying back that debt service through the storm water utility assessment in order to provide those millions of dollars annually that we need to accomplish those projects.

So initially, told you there are 70 employees in our department. 46 of those full time and two part time employees are paid through the general fund. The remaining employees are partially funded by the CRA. They're They're funded through the building fund. They're funding through a number of different funds.

And so those will show up in other areas of the budget. The ones that are 100% funded by the general fund include the administration that's me and Cynthia and our deputy director Mike Corolli and admin staff, including our budget coordinator who did this lovely presentation and is amazing, and she's listening at home. That's why I had to say all that. So current budget operations run extremely lean. We we reduced our budget in the current fiscal year.

Factors that we've been holding the line from year to year on what our annual budget is. Factors that compete with operations that we're able to provide include increasing expenses for general liability, for utility services, for our vehicle and fuel costs. All of these factors increase in price, and as our budget holds the line on what we spend in a year, that actually causes us to reduce our service lines to continue to balance those costs. So, one of the things that has been implemented in the last year, which we find very helpful, is that the finance department is providing us with quarterly variance reports, which lets us know quarter by quarter how we're doing on spending the budget that we projected for the year that we're in. The last the q two variance report, which that means second quarter, the one that we got was sent to us at about 58% of the fiscal year being being done.

Our budget was exactly online at 58% of the funds expended. So we're doing the best that we can do at being able to predict what we're going to spend throughout the year. In the coming year, there are some expenses that we know are going to go up, and we don't for some of them, we don't have solid handle on exactly how much that is going to be for for public transportation services at your goal setting session you asked us to look at expanding the freebie service or some other form of of point to point transportation, and we'll be looking at that and coming up with a proposal. In addition to that, the 100 foot Christmas tree and village, the current contract owner has asked us to increase that contract amount by about 30%. We're in negotiations.

Nobody said yes to

that

yet, but that is the initial ask. So those are just two examples of expenses that go up throughout the year, and when we're holding the bottom line, that impacts our service line. So this is the division by division of each of the divisions that we have. The minimum function is the first column the kind of purple the current function and service level is blue improved service level would be the green columns And we didn't propose anything for the alternate service level for this year. So, for the improvement in the green column, one of the things that we're asking to do is to fund the pavement preservation program, which we have not funded for the last couple of years.

So at a cost of about $500,000 that would give us ability to increase the lifespan of those roadways that we have recently paved as well as looking at some of the marginal roads that don't quite need to be milled and resurfaced yet that we can do repairs and sealing on that will also increase their lifespan until we get to a place where we can fully fund this program. And we will bring additional dollars in the CIP budget to do a better job of funding that program. So the engineering division, these guys are amazing at holding the line. They stay very steady. We have not increased staffing, although we have increased the construction portfolio in the department significantly over the past few years.

But we are basically holding steady. The increases that see there are due primarily to salary and insurances and that sort of thing. So parking facilities. The parking program brings in about we're projecting around $9,000,000 in revenue in the coming year. And the expenses in that department hold steady although the parking management company that is a part of this this program does have an escalation clause in their contract so every year that goes up a little bit and it can also change and be altered based on how many special events there are and how much the one parking company needs to be involved in the special event parking.

So just to give you my favorite pie charts, you know, we can never get away without a pie chart. If you take a look at the chart, the sort of marine blue color, our favorite color, that's salaries and benefits for our department. The bright orange is our operating fund as you can see our salaries and benefits are just under $6,000,000 annually out of $14,700,000 budget the operating funds are 3,700,000 we spend about just under 1,900,000 on on utility services and waste management Our parking management contract is $1,281,410 every year. And our lease and funding agreement, these are leases that we hold with FEC, with the Presbyterian Church for the Gleason Parking lot. We have various leases that we have to provide railroad crossings and parking areas throughout the city.

Agreements also have escalation clauses in them. The freebie contract for the service area that we have now is 510,000 a year, And we will be bringing an increased service area option to commission later in the year when we talk about that transportation service at your request.

Mayor, mayor? The total budget that you show, at what level of service are you assuming that is? That's at our current level of service. Okay, which is below our is actually below the optimal, but Exactly. I noticed We're doing it. Thank you

very much. Okay. Next slide. So, to talk a little bit about the Fleet Division, the City Garage, All of those general funds are are include salary for 13 full time and one part time employee. They do all the preventive maintenance costs on the vehicle replacements.

As we've implemented the capital lease purchase program over the last two years, those vehicle maintenance costs are going down down because the general age of and wear and tear on the vehicles that we have is they're much newer and they're in better condition so some of those maintenance costs have been going have down. However, we have got increasing costs on our heavy duty equipment that require increased repair costs. Anything that requires a hydraulic repair we have to send off-site and it may sit for weeks to months we recently repaired just one VatCon unit and the cost was was around $70,000 so it's some of these costs for this heavy equipment is very expensive I forgot to mention, you're probably aware, fuel costs are rising. Just as a side

note. Okay,

in the administration division, the only increases that you see up there again are our salary insurance, that sort of thing. We fuel costs for the vehicles. It's just normal cost of living increases there. We're not asking for anything new, different, or special. So the the fleet budget level overview is is very similar.

Salary and benefits is just under 1,600,000 the difference here is that our fuel costs outrank all of the other expenses in the fleet division so they're they're at about 1,890,000 this number is subject to increase as fuel prices continue to rise so we are looking at that and we have we have started conversations with finance about perhaps raising that cost projection. So beach renourishment, I already talked a little bit about this. In the coming year. We have any beach renourishment projects. We don't have any major construction projects.

Everything out there is new and the the the the the

working at at lowering the

the scarps the that are on the beach. They've done a very good job in a very short period of time of making making those scarps more more of gentle slopes. But I will say that we drove the beach this afternoon, and the waves out there are crazy today. So there may be more scarping in the morning. That's how the beach works.

So for for storm water, there are two divisions in storm water administration and maintenance. The administration of the storm water division includes two professional engineers and then the maintenance division includes the folks that you see in the field before every storm out there clearing all the storm grates of leaves, making sure that everything has an opportunity to flow into the system as designed, and repairing those things that break throughout the year. So some of the major stormwater projects that we have underway right now are replacing the stormwater pumping station at Thomas Street. And we are in the process of establishing the guaranteed maximum price to begin the work on Marine Way. And that is the Public Works Department in a nutshell.

Thank you very much. Are going to be doing questions or

I'd like to just comment if I may. Just because

You may be reckoning.

Thank you. I appreciate that. Just because you're gonna leave here and then try to figure out where we want you to go, I feel like we should be commenting, generally speaking, or we can't really get to the next step. But I think when you and I talked, you said about how you're you run lean and we've reduced services in the current year and you see this on every page and that to me is really concerning because the thing with your department it's like if we run lean in our department that's okay we don't have snacks in the back room extra honey or coffee or what have you but if you run lean you're going to cost us double in two years that paving program if we aren't doing that paving program it's going to have a five times greater cost in the near future and my concern is that we're not serving the residents well if we cut in your department because in the long run maybe it's not in the next two years maybe it's after we're gone they're going to pay the price for that decision so for me here today when you talk about your pavement slide if I know that is imperative, the $500,000 has to be in there.

I do think we need improved function. I want to say thank you. I did go to the beach and I saw what you're doing with the Scarves Parks and Rec. That's thank you to you. I don't know if we can do something with the beach management fund like pull money from the parking to put it into the beach management fund, but that's probably a conversation we can have in the future.

I would just want to talk about the number of employees that you have because I think when you and I spoke you said that you've consistently kept the same number of employees for many years and yet here you are with three four five times greater requirements just based on the city's growth and the city's needs and so when we're looking at the budget for this department I think we have to expect that we're going to need substantially more money to operate this department going forward and I would say to you Mr. Moore I know that in the past you've gotten a sense of what we want and you tell your departments to cut it lean and bring us something like that and that makes us look good but at the end of the day I think what we have to do is start looking at our city five years out like we do our CIP but even with our general fund and all of these other funds how are we going to satisfy the needs and I think we can all argue we need some improvement in some areas but we can't keep ask these departments to improve for us if we're not giving them the money and so I thank you for the presentation I'm concerned about the current state of where we are in some of these departments and you have my feelings on how we move forward thanks.

Any other comments? Yes, mister Marker. Thank you.

First of all, that was great. Back to what I said, mister Moore. I I one of the things that I'm gonna want down the road is just to see what you cut and and, you know, what you're gonna maintain. And then I wanna balance that against some of the priorities that we all collectively have. And and I I echo Commissioner Casal's comments.

I mean, we're asking you to do a lot. And, you you know, we're only giving you x amount of money, so we need to know how you're gonna spend it and where you think we're coming up short so that we can use that information to perhaps make better decisions. I also know, you and I talked offline, Marine Way is a that's another big beefy project that we need to do it. But I also know that's to be a big one. And I know you're just getting into the who's and the what's of that one, but that's going to take a lot resources financially and people, I'm sure, to do. It's important to us, so we have to do it. But that's that's another one we definitely got to put on your watch list for next year because it's a big one.

Thank you. Commissioner Moss, did you talk to those experts?

Can ask one more question of Mr. Moore? Would you ask us as our task as we depart from these meetings to go and take that sheet, each of these sheets, and highlight what we think is imperative to be, where we should be, and then provide that back to you as feedback because I think that in order for us to get to this next stage of determining what is the rate going to be, we need to look at what of these improvements are going to be in the budget and I feel like we could help you and the finance department get to where they need to be with that type of input if you think that would be helpful

that would actually align with what I haven't planned for you all June 9

okay

in terms of the scenario piece so with consensus from everybody to be in position to offer that feedback that would connect with what we have in store for the June 9 workshop meeting as it relates to the proposed budget process.

I I actually have a comment on that but I'm gonna do that, save it at the end of the meeting because it has to do with all the budgetary items. So because we need to give you directions to what we think Of course. At the end of the day. Of course.

That's what I was just saying.

Think course. Know that. Yeah. Of course.

Thank you very much, miss Pondento.

Is there

questions from

the No. There is not. I'm sorry, ma'am. Not too bad. I apologize

at this time we have director of utility Sassan Hajamiri to provide his overview miss Hajamiri please

Sorry. I'm I'm my own assistant today. Good afternoon, mayor, commissioner Hassan Hajimura, utilities department. Thank you for the opportunity to give you a brief overview of utilities fiscal year twenty twenty seven budget. Let's see.

Just a quick overview. Utilities Department provide water, wastewater and reclaimed water services to over 70,000 residents within a 17 square mile of City Of Delray Beach. On average, we provide 14,000,000 gallons per day of drinking water. We collect 8,000,000 gallons per day of the wastewater and provide 2,300,000 gallons for irrigation. Oops, went too fast.

There you go. Utilities Department has nine different divisions and 146 employees. And those are the divisions. I'm not going to go one by one. Our water sewer or we call them water distribution and wastewater collection division has 53 employees.

Maintenance 46, which is maintenance for all the lift stations, wastewater lift station and water treatment plant. And water plant itself have 17 water plant operator. And we go down. Our administration is only seven staff. It's myself, one assistant director and one department coordinator and one budget person and also one state assistant.

So this is has been. Just a quick synopsis of what we did in 2025. We treated processed and treated 5,000,000,000 gallons of drinking water throughout the whole year, 900,000,000 gallons of reclaimed water for irrigation took care of the 7,316 phone calls that we get for various reasons. Over 2,000 permit applications that was reviewed and processed by our engineering division. And I can go on and on.

Almost 28,000 water quality testing. And the best part is six years in a county we have had no drinking water violation. So as far as the thank you as far as the financial structure, utilities department operates on the enterprise fund and we run it just like a private fund, private entity. Operations are funded throughout the customer fees. They pay their water And we're not getting any fund from general fund or taxes.

And the revenue that we have that we receive is reinvested in utilities for operation and for the capital improvement that we have. And we also on top of that, we contribute to Citi's general fund, which I have a table that shows you that part also. As far as our personal budget, I don't want to go through all that. As I mentioned, we have 146 employees. Our budget for 2027 is going up only 2.3%.

We have done a lot of efficiency study internally and optimizing the operation of our staff, relocating some of the staff from one division to another division. And the numbers are there for you to review. Our operating budget actually for fiscal year twenty twenty seven is 5.4% less than 2026, adopted budget for 2026. Numbers are there. And there, as you see I forgot to put my glasses.

Have none of them work. Our operating budget is 21,467,000 Our depreciation is 4,700,000. Our contribution toward the administration expenses, that's the general fund, and credit card and professional services is $4,900,000 But out of that, 4,700,000 of it is for administration services that utility transferred to general fund. And on top of that, we also transferred another $4,700,000 to General Fund. So in any given year, about $9,000,000 of utilities fund has been contributed toward the General Fund.

May I ask, what is the depreciation in the operating budget? Depreciation

is an accounting method, I guess, that they have used. They show it, then at the end of the year based on what I'm understanding they are deposited back. So it just for the because we have close to probably half $1,000,000,000 worth of, you know, inventory in our system. The water plant, the pipelines, the pumps.

Oh, that comes the operating stuff, though? Is what we inventory for the

That is not something that we are in control. Finance assigned those numbers. Okay. And those are under full control of the finance. We do not. I mean, I do not sit down and say every other part of it, yes.

If I may, commissioner, to add, government accounting standing board is one of the directives of theirs to account for depreciation or appreciation and depreciation. So you just included that metric as part

of Yes. Your So I have I have control on every part, every dollar of our budget except the depreciation and the funds that are being transferred by two general funds. Those are not done by my office. So that's I cannot tell you. I have asked

I'm curious why depreciation, though, is getting transferred to the general fund from a go back to that slide, if you don't mind for me Sure. For one moment. From the utilities versus going into say a utility fund or something like that or why it's even am Right. I

have asked that question many times but that's they're telling me that it really doesn't have effect on utilities budget

okay maybe mister more you and I need to offline this conversation

sure we will and finance so transfer to general fund is that the specific line item for which you are referring the $4,700,000

yes

so that is simply the contribution from the utilities fund to general fund to cover associated expenses based on what happens with general fund supported activities so the expenses Even from

the 4.9 is the expenses transfer administrative credit card fees professional

Okay we're talking about the same number yeah there's a depreciation number 4.9 4.7. There are three different figures in the pink line items. I

have requested from Mr. Dankowitz, I think two weeks ago, to give you a full for all those and the formula that has been calculated so I think it was two weeks ago I requested and I think he just have some work.

So we'll follow-up with everybody and provide that response because it is technical Yes. Accounting in that

Curious. Fair enough.

It is basically more than 50% of our operating budget. Correct. Yes, ma'am. Factors that contributed to the reduced operating budget. We actually producing less water now than we were doing five, six years ago.

And the population has gone up. And that's that's that's that's we all know that. And one of the main reasons I'm going to jump to the other one is two things. The rate study that we've done and we established a tier rating for the water. So our customers are much, much more considerate when it comes to using water because in Delray, more than 65% of the water that has been produced is for irrigation only.

Mhmm. Not for drinking. So if if people don't irrigate at all, we're gonna have probably close to, I would say, 8,000,000 gallons per day of demand. But our demand goes way, way higher, you know, especially during the dry dry months. So both the rate adjustment

Can I just ask

you a quick question? Yes.

Do we

have, like, plans to increase the availability of reclaimed water? I'm gonna okay. I I can

go there. I I can switch right now.

No. No.

Yes. I that's just a question.

We do actually have one active project that is going right now

Okay.

To bring the reclaimed water to cemetery Oh, great. And a couple of school right near that. But one thing, vice mayor, is reclaimed water system. It's just like a water distribution. So if you wanna take reclaimed water to the neighborhood, you gotta put in your pipelines that the street has to be dug up. And then you have to provide services to every single home. And with my experience with reclaimed water for many decade, that is not the best way to use reclaimed water. Reclaimed water becomes very, very beneficial when you have a lot like a tennis court. I'm sorry, golf course.

Golf course cemetery.

Golf course and parks. Those are the best places for because you have one point of connection and then they have to irrigate and you don't have to monitor. So that is one of the reason I wish that we have ample reclaimed water at the South Central Regional Wastewater Plant. So the water is there, availability is there. But the cost of bringing that to the customer is very, very high.

We also optimize our flushing to maintain the water quality. We just don't go over to the neighborhood and open the water the hydrant and let it flush. We monitor many, many water qualities before and after we do that. We improve the usage of our alum and lime at the water plant. And also, as you all know, we eliminated fluoride last year.

Am I going forward or back? Okay. There we go. So this is a capture of our personnel and operating cost, which shows combined we were 3% less than 2026 for 2027, mainly because of the operation the optimization that we did to how to operate the water plant, finally, and the distribution system. And on the bottom, I just wanted you to see the revenue that we bring in at the utilities.

So it's projected for 2027 to be $62,000,000 per year. You're all aware of the rate increase that we had. It started four years ago. We got four more years to go. And I thought that you you got to know what those rate increase, what kind of effect it has had in our budget.

So the first year, it was 5.7%. It came up to $170,000 per month. So after, I think it was July 2023, that when it went to effect, that was based on the calculation. Second year was 6%. Third year was 7%.

And last 10/01/2025, it was 9%. So total, we're bringing in $910,000 more per month as a result of the rate adjustment that we did. And beside that, due to other efficiencies that we have placed in utilities, we actually bring in $500,000 more per month every month also. And those are for our billing accuracy and collecting on the delinquent charges that were going on for decades. So when I took it over, we I looked account that for the twenty years they were getting a delinquent account and the water was still connected.

So we worked with our customer and now we have a policy that if you have a two month delinquent charge, your water will get shut off just like any other utilities. And that number is going down and down and down. So one of the comments that I received, Oh, we thought you were not serious when you were saying we shut off the water? I said, Yes, because if you don't pay, someone else has to pay for it. I mean, it's just as simple.

A lot of information in this graph. The top green line, it shows our revenue. And the revenue is just when we look at the money that comes to utilities as part of the selling the water. The reason it has so much zigzag because of when they collect the money and then when it will be deposited. So, next graph I'm going to show you in the linear format.

And the bottom, the area one with the bubble, that's the water that we treat. So, we see that our water has actually water treated or is going down and our revenue going up. There are also three blue rectangles on the top that shows you when the different rate adjustment went to effect. And also, there is a green rectangle. It says when utility billing came under the Utilities Department of Operation.

Quickly, that's the same graph. It shows you one of them is going way down. It is not going to like that anymore because we get it to the point that we cannot just go and hit the zero for our water production. So I'm pretty sure that we are at the level that we can hopefully continue keeping this level. And so as our revenue, we have four more rate increases that are coming and that is to support the water treatment plant.

We had one revenue bond that went to effect last year. We're going to have another one hopefully by end of this year. And within five years from now, we have to make about $2,300,000 a month for the payment of that. So I'm thinking that far that we're going to make sure that we have enough revenue to cover the operation of the utilities, the capital improvement and also pay the revenue bond that we got for the water treatment plant. I don't want to spend too much time on that.

We basically went through all of them. I wanted to save some time for Mr. Mithat. I only have 20 more slides. Just hold on.

So this one, I only have one for the whole department. We are basically actually at the base bottom. As I mentioned to you, the number of the employees that we got in a different division, We are, you know, on the base bottom. We're not normal. That is the base. That is the lowest level of the water that any decent utility can produce for its customer. And we are doing that. Anything less than that is not acceptable. Anything less than a service we provide to our customer is not acceptable. So I just want to make it very clear to myself that, hey, this is it.

Because I established a policy of less than a one hour response time to our customer. And any phone call needs to be responded or addressed within four hours. So hopefully we can keep up with that. Yes, we can do it much better. I put down for that if we want to improve, yes, we can bring seven more people, eight more people.

But I'm going to look into it and make sure that when we do that, we definitely are required. But at this point, if you see the blue rows and purple rows are pretty much the same within a few $100 different. Oh my God. What is this? Is a I'm going through this line by line. No. This is our CIP. I'm not going to go through our CIP. I want to just mention two things here. One of them is what we're planning to do for the next three years that I'm expediting that.

That is to replace all of our water meter. We have a Badger water meter that I have had issue with them since 2021 when I was early here. Still working very how do you say it? I think it's best for the city to go ahead and start getting the new water meter system in place. We're going to have a brand new water treatment plan here in three years.

And those water meter, they have reached their end of useful life, which is only ten, eleven years. Usually, they need to last much longer. But the electronic part of those are failing. So I know one of the items tonight is the Badger Meter. I can address that at any time that if you would like. So I'd like to do that project within the next two months or so. Yes, mister Moore? Thank you.

No. I thought it would be a good idea to briefly mention it at this time so as to have everybody understand openly and transparently why we continue to conduct business, we are in that place, and what the plan is in the coming years.

Yeah. Oh, I appreciate that. Thank you.

If you don't mind.

I thought you were telling me hurry up or something.

No. No. Let's talk about now because that is a relevant question.

What that is, we have had so much correspondences with the Badger Meter. They came here last year after two years of meeting me and Mr. Moore with them. So we finally got him here. They replaced 505,329, I'm not sure, of the meters that they were not communicating.

About three years ago, we had 9,000 meter that they were not communicating and utility billing was estimating close to 9,000 meters. And you remember, in December 2023 and early twenty twenty four, of the dilemma that the city had to go through. So they replaced those, but still, that's only 6,000 out of the 22,000. We're still spending time with our staff to go read the meters. We have a drive by, handheld that we go.

But still, it's just not cost effective to run the operation that we have right now. So that is one of the main reasons. And as part of that, we're going to put still, again, some houses that they need to have dual checks. We're going to go ahead and make sure that they have it as part of the new meter to make sure that to bring the city into full compliance and the most effective way that it could be run, that utility.

What does a new residential meter cost?

It depends, sir. In Delray Beach, for some reason, they all have a large meter, like one inch, two inch meter. Typical need for the water meter size is five eight inch. Five eight I mean, I I have a five eight inch meter. And here, the house is one third of my house size. They got two inch meter. And I don't know why. So hopefully, you know, it just for some reason. I don't know what the reason is. The cost for the meter itself, it depends.

You know, we are going to hopefully by end of the year to the competitive bidding process and make sure we get the best meter for the city. Right. Because that meter is going to be I personally want to go with a minimum of fifteen years. Right. Of a full warranty. Not prorated, not, you know, pulling the tooth out of the meter factory manufacturers out. No. That's what we want. Fifteen years. After that, then I'm gone with years. No. No. Actually, fifteen years is a maximum.

He's kidding.

I have I have read a lot of literature. Most of them are producing the decent manufacturer. I'm not saying anything negative about the Badger, but their services is no good. I'm not afraid to say that that's the truth because we documented everything. So I hope that they respond to us. I hope that they come and they honor the warranty.

I hope they do too. Thank you. It's been an ongoing situation for many years.

And the other capital improvement that we have is currently ongoing and we're planning to spend $120,000,000 in '27 and $110,000,000 in '28 because that's where the most of the money is going to be spent toward the last part of the water plan. And beside that, I'm sorry if

I took

too long.

That's okay. Is there any other questions that you have? I'm gonna be curious about that depreciation number. I think it's tied to how the money came in originally from the capital improvement from one point and you really just keep bringing the depreciation back to the money but to where the source of the original money.

That should be easy to answer though.

Because it's a depreciating asset, it's what you've done. So I'm just curious what, you know.

Well, our interest is to be thorough and be sure you'll have an email communication from us in the next day or so.

I appreciate

that. All of you will.

Could I just say, appreciate your presentation? I think, again, speaking the same way as about the public works, none of that request seems unreasonable and at all seems necessary and I'm just gonna remind every resident when we consider your budget and your increase you went out of your way to collect over 2,000,000 in uncollected money for the taxpayers. You are always always looking out for Delray taxpayers and I appreciate you. Thank you.

Our final presentation for this evening's workshop is director of parks and recreation Sam Mittat mr. Mittat if you would please

evening, mayor and commissioners. Sam Mittat, Parks and Recreation. Luckily, I'm going to be a little bit quicker than Mr. Hassane. First and foremost, most people don't always realize I know many of you do because you live and breathe it with me on an annual basis. But parks and recreation is much more than just parks and recreation. Right? We encompass a whole lot throughout the city. It's always interesting because we impact almost everything within the city in some way, level, or shape, or form. Also, I always tell everybody that parks and recreation is is parks and recreation because it's two separate divisions altogether.

You know, we have our park side, which is most of our outdoor stuff, our maintenance, anything on the external parks. And then our recreation division primarily encompasses everything that happens inside the community centers. It's five recreation centers. We incorporate all of our youth and adult athletic programs, all of our community outreach programs, and special events falls within our recreation budgets as well. As you know, we run the city marina, the city cemetery, all of our citywide special events, two aquatic facilities, two golf courses, two tennis centers. And I didn't even put it there. Even I forget once in a while. We also run and operate the front desk here at City Hall. The request for us is it's pretty straightforward this year. It's it's very, very simple.

And that is there's not much to it other than the increase in our nondiscretionary items. And most of that is just salaries, benefits, utility costs, and also any of our contractual obligations. One of the reasons our number gets very big within the parks and recreation budget is because a lot of large scale contracts are held in a parks recreation budget items. I think Missy mentioned earlier, our beach raking contract is a parks contract. Right?

So that's a very big contract. The tennis tournament sits in the parks budget. Other even even the payments to the DDA for the operation of Old School Square, the money is put into the parks budget, then we pay them per the contract. But that number gets added to our overall total in our general obligation. So that's where you see from the current to the minimum next year where there's a slight increase, as it's accounting for some of those contractual and nondiscretionary increases.

The only thing we're really looking for in addition this year in any way is we're looking to add one full time position to the front desk here at City Hall if possible. What we run into all the time is next door at the community center where whenever our full time person's here, out, sick, holidays, vacation, or what have you, all of our staff are covering that throughout the day and being pulled pretty frequently all the time for that. We don't mind, but it does pull from all the other operations that are going on. So we'd like to be able to add that if possible. Inside the recreation budget is also the special events I mentioned.

I know that's always a topic for everybody. I do want to make sure you all are aware that right now, our special events number includes all of the special events even at Saint Patrick's Day. Right? And I know that is a question for some right now that with with new legislation on whether or not that type of event moves forward. To me, that's still a little bit gray right now.

So I didn't wanna remove that number before we go further, but it might be a reduction some for something like that. We've and hopefully, we have answers before we get too far down this budget cycle where we can plan accordingly. But I don't wanna be remiss to say, you know, that it is included right now before we remove any funding and then find ourselves saying, well, now we gotta go add something back. And then the next is our park side of the maintenance of the budget, and that is, again, not a not a a lot there. There.

The biggest increase is just all those costs and and things that I mentioned. When Hassan talks about the water rate and all that new revenue, we I always tell him that I have to be his biggest customer. Right? We spend a lot of money on water, on watering all of the parks and playground playing surfaces for athletics and and things like that. So those are the increases that you really see. Ideally, we add a little bit extra in there. We've been working with Hassan. Parks and Recreation has assumed over the last two years all of the maintenance and checks for all of our backflows and all of our parks. So that has that has been a a pretty big cost. We have over 300 backflows throughout our park system.

So even a couple thousand dollars for repairs and maintenance throughout the system, that number adds up pretty quickly. And then just some additional money for repair and maintenance of some bathrooms. And that is your parks and recreation side of that that budget. Luckily, we've been experiencing quite a bit of savings. I've mentioned to you before that we've redone all of the sports fields into LED lighting. It's cut that power bill for six athletic fields in half. Right? So it's pretty substantial, and we're about to do the same for eight baseball fields over at Miller Park. So that number has been reduced pretty significantly on those on those fields. So that is a little bit of cost savings for us there.

And then I just want to mention that we didn't make many changes in this year's budget, but we anticipate an extremely busy year. But it just has nothing to do with our operating expense. It's a lot of projects that we anticipate over the next eighteen months, right? And that is Pompeii, the golf course, mausoleum, and all of those bond projects. None of those are in the operating, but we anticipate being very, very busy within the Parks and Recreation Department on a lot of those items.

Thank you very much. Any commissioners wishing to do it? Commissioner Gonzalez.

Yes, thank you. Thanks for the presentation. I very much appreciate it and always appreciate you. Mr. Moore, one thing that I was wondering about when we talk about personnel services and everybody's putting their number up, does that account for increases in insurance and the like

it does

last year was like a 35 increase in insurance what is it looking like this year

not as high at all so probably at the most 10% is being forecast so significant decrease in that regard and the metrics do take that under consideration as we calculate what the anticipated expenses are on the personnel side in every department we do what we can to forecast that up front

perfect Just wanted to know that. Thank you.

Thank you very much. Anybody else who should be recognized? Thank you very much, mister. Thank you, Todd. I just wanted to to to I know I I said I have something to say. And it's kind of what commissioner Gonzalez did. But we have when as they're approaching the budget, we need to give direction as to where we want it to go. I mean, we have four choices, really. We can do a rollback. We can do a decrease.

We can keep it the same, or we can increase the millage. So we need to decide where we're comfortable with because it works with everyone the way budgeting, in my experience, works is that we establish what we want the rate to be, and everyone has to live within the rate that we decide. What happens more frequently than I would prefer is that they figure out what kind of money we have and then we figure out how we're going to spend it, which is more revenue allocation and not budgeting. So I think to decide May I? What we're going can I finish up?

Sure. So I think we need to decide that. Now, I don't know if tonight's the night to decide that, but we we really we need to give direction as to what we wanted so that you can then take whatever numbers we decide and say and get back to the department to say, okay. You have x amount of dollars to spend because this is what's good the the rate's gonna be. I don't think we know what the full tax rate's going to be yet. We haven't been given you would not have been given the full taxable value number yet, which I mean is coming soon, I don't know if we've got

it yet.

What is it? June 1 that comes more or less?

Thereabouts. If I may, mister mayor? Sure. Pardon me commissioner however my outline regarding the June 9 workshop meeting will begin the process of defining what that might looks like so I would highly recommend to the city commission give us the opportunity to outline scenarios so that we can get to a place specifically in terms of what that guidance might be. You need to see what we're talking about because of all of what's been presented thus far, number one. Number two, the myriad of expectations haven't been communicated by city commission and elsewhere, and thus we need to make preliminary decisions in terms of what that looks like so that I can come back with a proposed budget recommendation the following month. That's the time

to accomplish that. I understand. We don't even know what the what the figures are, so I don't know how we play with them.

Yes, Let make a suggestion?

Just say we have limited choices. At some point, we have to tell them how how do they have to sharpen their pencil? How how much they have to sharpen their pencil? Or they don't have to sharpen their pencil?

That's Right.

And this is why at the beginning of the meeting, my suggestion was we each take all of these. We all got the printouts. And then line by line figure out. Because I understand what you're saying. We could just create the number and say, everybody figure out how to work in it. But then he has to go and decide where he's cutting and where do we want to cut? Are we cutting utilities? I don't think so. We cutting public works? No.

Parks and Rec just did an amazing job for us. We've got the fire that has a contract that is you know we have locked in cost. I think as I said in the beginning we should all go through each of these slides presented by each department highlight the things where we want them to be at because I don't you and I disagreed on this last year. Giving just giving a number, what happens throughout the course of the year is we things are missing. You were upset about the the fireworks for New Year's Eve that was cut because it was an expensive item for the amount of time.

So I think we have more control over what's going to happen if we say this is something we want. We need the paving program. That's $500,000 We want this. And we haven't even looked at the CIP

I'm not disagreeing with you. By the way, wasn't caught. Was what I was upset is that they didn't tell us first. That was what I was

I know. And I understand that, but I think there was a lack of clarity because we didn't have a we needed to mister Moore needs to, instead of moving on one on one conversations, bring that out for a consensus because

I'm agreeing. But in order for you to any one of us to make that decision when you look at one of those things, you really need to see the backup is what what you know, you can't how do you say how do you cut administrative expenses without knowing, you know, in detail

Well, Missy has been running her department, Miss Barletto, with the same number of staff for many, many years, they're doing much more work. Are you suggesting that they cut staff? I mean, she's asking for more staff.

It is impossible to figure out what to cut when you don't know what the items are within the category. That's

I don't totally disagree with you, but when we get that more of a worksheet, we have. I mean, we had line I went for an hour last year line by line on, you know, steel toe boots that were a thousand dollars more in one department than the other. I don't disagree with what you are saying but I think in order to make this process work we have to have some idea of what we want in terms of our level of service for our residents so we can direct him to come back with a number. I don't want to do the same thing. The first year you said we're going to sharpen our pencil and cross things out. We cross out nothing and we ate up our reserves. I didn't like doing that. We had to reduce our reserve percentage to accommodate that budget. That was not what we agreed on up here and I don't That's want to do that

a discussion for another day.

It is a discussion for what another day, I'm saying is it's not my reserve analysis. I don't want to keep on debating this. What the organization tells you it is. It's what Mr. Moore presented it is. It changed. I'm not fighting that. Just saying I think we need to budget appropriately.

Points me.

Thank you.

Likewise Are there any other

I'm sorry. Please. Continue.

Then I'll respond.

I I just have a quick one. I I I agree with commissioner Casal, and I think that's what you said you're gonna provide us in the June 9 meeting.

Yes, sir. And that is the conclusion remark.

I just really just wanna see, you know and and look, you your direct reports are terrific. I I just wanna see from them, you know, what's included in the budget, what where did we have to sacrifice, And then let's talk about the strategic priorities, some of the things that we wanna do. June 9 priorities.

Could I ask a question on the ninth? Are you going to then give us four scenarios? One, the current as it is, the lower level, the best level, the four different levels are you gonna calculate out those four levels

it may be more than four scenarios based on all we've heard all we know what's been communicated

in every session prior to that to help you do that

actually as I mentioned in response to the idea you offered earlier, that's actually congruent to that effect. So if there's an interest on part of any of you all to provide information, we can make that align with what we're

talking about. So that you can sort of have a sense of where

Then if we're going to do that, I would ask that we have the backup to these to these sheets knowing what what what is included in the definition of administrative expense, what is included in the definition of whatever we're doing.

We'll incorporate that in the scenario focus for the June 9 meeting.

Well, if we're gonna get comments to you prior to the June 9 meeting, I need to see those figures before the June 9 meeting.

He's right about that. Is that doable?

It should be

So we can assemble that information and get that to you all in the next few days Yeah.

Because I would say based on direction each one of the departments who made the presentation have a general idea what the what's in those numbers because they came up with a a a a a final number. So they gotta know what math was involved.

Well, it was it's in there at staffing level. There was number of employees.

It's we can accomplish that. So based on what you're describing. So if I may, ladies and gentlemen, just to keep us structured and focused

Thank you.

We'll be in position to work with the Department of Finance over the next few days or so to begin provide that information so that you can get that back to me. So the first week of June, of course, Monday, June 1, Friday, June 9, Thursday, June 4 or so, we'll be compiling what the presentation looks like in order to demonstrate scenario considerations for the June ninth workshop meeting. So we're pretty deliberate in that regard. So given the feedback and guidance being offered by the commission at this time, we'll make that part of the nexus because of course it does align with what we intend to accomplish during the June 9 workshop meeting. So on that note, I'll be happy to oblige.

So we'll get you some base information along those lines fairly easy to calculate we'll get that squared away in the next day or two you'll receive an email consideration do not hit me in the head with the gavel mister mayor I'm just speaking the truth otherwise I'm all set I yield at this time

thank you

we are adjourned