Minutes for May 25, 2006
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DRAFT
Board of Trustees
Budget Workshop Meeting
Thursday, May 25, 2006
1:00 p.m. – Building D&E
Madame Chairman Wilma Weglein called the meeting to order at 1:00 p.m.
Ms. Weglein commented that in 1868 General John A. Logan, commander in Chief of the Grand Army of the Republic issued an order designating Memorial Day as one in which the graves of soldiers would be decorated. The holiday was originally devoted to honoring the memory of those who fell in the Civil War. It is now also dedicated to the memory of all war dead. Ms. Weglein requested a moment of silence for all armed services both those serving now and those who served in the past. Amen.
Ms. Weglein led the Pledge of Allegiance.
Ms. McCahan called the roll. Ms. Howard, Mr. Carillion, and Mr. Smith were excused. There was no attorney in attendance.
Mr. Hunt reaffirmed that golf revenues increased 18% in the last 14 years.
Mr. Bolon asked about the $1.25 maintenance fee increase. Mr. Hunt responded the District is not proposing a raise in the maintenance fee itself. The Trustees voted a rising scale through each of the four years of the capital program. The $1.25 shifts each year from the capital fund to the operations fund.
Mr. Keegan asked what budget line the human resources personnel would be charged to if the District “goes in that direction”. Mr. Hunt responded that person would appear in the budget with the other six department directors. Ms. Weglein clarified that human resources would be a separate department. Mr. Hunt responded human resources generally demands a person trained in that field and performs duties which fit into a specialized department.
Mr. Bolon asked where the payroll assistant position is. Mr. Hunt responded Shari Horne, as payroll assistant, is supervised by the Finance Manager and assists the Finance Manager as required. Mr. Hunt identified the 6 employees the Finance Manager supervises as Shari Horne, Arlette (receptionist), and the four women who comprise the Building B staff.
Mr. Bailey asked if the property services and facilities maintenance line includes the new person which is going to be hired. Mr. Hunt replied it does, and the grounds people are included in property services.
Ms. Donahue asked if there were department numbers that would tell the Trustees to what department each employee was assigned. #1300 is Administration, which includes three departments: Mr. Hunt, Ed Geer, and the Finance Manager. #7210 is Food and Beverage. #2900 is Code Enforcement. #7220 is Public Works. #7230 is Golf. #7240 is Property Services. #7220 is Facilities. #7250 is Pools/Aquatics.
Ms. Weglein asked if the payroll function would be given to the human resources person. Mr. Hunt responded it could be done either way and would depend on what other functions were assigned to the payroll assistant. If that position handled the insurances, the employee benefits and the vacation and sick leave, then it would be appropriate to fill the position with a human resources person as opposed to a finance person.
In response to Ms. Donohue, Mr. Hunt commented the District has 84 employees. Ms. Donahue commented the employee flow chart showed that four employees were receiving less than minimum wage. Mr. Hunt responded those employees are waitresses whose tips are counted in.
Ms. Weglein commented $10,000 was budgeted from Code Enforcement fines. Mr. responded this is the net of what the District will collect versus the cost to collect. Ms. Weglein commented there were some large amounts outstanding. Mr. Hunt commented the District couldn’t budget for something it “might” get. If a court case does produce a large settlement, it would come before the Board for a decision as to what to do with that money.
Ms. McCahan asked about the amount budgeted for the RV lots. Mr. Hunt responded the amount was budgeted reflecting that the RV lots are 14 or 15 on the priority list and will not be renovated until October 2007. Mr. Hunt asked the Board to note there is a new $10,000 revenue source generated by ARCC permit fees.
Ms. Weglein asked Mr. Hunt for a list of fees Golf is charging and how that compares with other golf courses in the area. Ms. Donahue requested Mr. Hunt to put items that require decisions on the agenda for the next regular Board meeting. Mr. Hunt agreed to create a list of “decision junctures” from the workshop to be placed on an appropriate agenda. Ms. Weglein clarified there would be two public meetings before the budget could be voted on.
Mr. Bailey asked if the $95,000 in the budget was sufficient for the projects Golf wants to accomplish. Mr. Hunt responded [we] don’t anticipate the $95,000 could pick up all six of those items, perhaps 4 or 5 of them. Jim Kormondy stated the [lake]water is stabilized by the weir, so the lake bank erosion project is important, shoring them up and planting. The 3 pieces of equipment, including the grinders, are needed; other ‘immediate concern’ projects should be covered by the budgeted amount. Ms. McCahan asked Mr. Kormondy how he felt about a 5% increase in membership fees. Mr. Kormondy responded that when members saw the money being spent on improvements, “it should go over fairly well”.
Mr. Hunt agreed to provide a profit and loss chart in time for the next workshop. Ms. Donahue asked if Lounge entertainment was budgeted. Mr. Hunt explained entertainment appeared in the expenditure side of the budget. Mr. Keegan asked if subsidizing the restaurants was for the purpose of providing an amenity for Barefoot Bay homeowners. Mr. Hunt responded that is exactly the thought concerning amenities. The ongoing philosophical discussion [we] have been having the last year or two is what does an amenity consist of, and how much is the Board willing to subsidize each operation? Golf and Food and Beverage expend more than they take in, pools expend without taking anything in. the district is funding these operations, at least partially, out of the $56 monthly assessment fee. There are ways to cut costs or add revenues to make them more self-sufficient. Mr. Bailey requested the figures “for the last couple of years” and a proposal of what it would take to get the amenities on a profitable basis.
Mr. Hunt responded the numbers are “pretty good” in terms of subsidy. Golf revenue is about $3.10 against the $56; Food and Beverage is about $2.27; and the pools are about $5.27. Ms. Weglein requested a pie chart showing percentages and actual dollars charged to the $56. Mr. Hunt responded it becomes an academic exercise. This District collects a “whole host” of other revenues that are combined with the $56, so the discussion is largely theoretical. The gap between Golf and Food and Beverage is closing some and appears to be proportional to the amount of people using those amenities. The District provides nearly 28 amenities free of user charges. Ms. McCahan asked if there was a formula that could be applied to determine at what percentage the District would no longer subsidize amenities. Mr. Bolon commented he does not enjoy eating at the Lounge or the 19th Hole and thinking the Barefoot Bay residents are paying for his food. Ms. Donahue suggested there might be a $5.00 increase in renewal of badges. Mr. Keegan agreed with Mr. Bolon that there is a difference in the recreational use of amenities and eating. Hamburgers are goods, and people should pay for that entirely. Mr. Hunt commented the other aspect of this discussion is the District has inadequate facilities currently performing the Food and Beverage services. There is not proper cooking space or storage to carry proper inventory, which contributes to losing money in this operation. If the District were running Food and Beverage as a business, the $127,000 would amount to a loss. But [you] would also invest more money in capital equipment and facilities so the operation could perform at a profit. Ms. McCahan concurred there are some basic equipment the District needs to upgrade. It may cost as much as $250,000 to accomplish a properly functional kitchen in Building A.
Mr. Bolon commented there was supposed to be a catastrophic events line funded in the budget. Mr. Hunt responded the cash is in the various reserve accounts. Mr. Hunt offered to bring a cash analysis to the next budget workshop. It resembles bank accounts, but Mr. Hunt will identify the money that is available for catastrophic events. It is approximately $500,000. Mr. Hunt said he would bring those figures to the next meeting and demonstrate to the Board what the District’s cash position is.
Mr. Hunt commented the recreation fees as a source of income was lowered this year. $300,000 is the topside of where the District is going with that fee. This is the $500 fee that is incurred when a property changes hands. There is a slight slow down in that, so the budget needs to show it is going down rather than going up. Sales taxes inflate both sides of the budget because they come in as revenue for the express purpose of paying out to the State.
Ms. Weglein commented on the COLA at 2%. Mr. Hunt responded the 2% COLA falls into place on October 1st. Ms. Weglein asked if the 2% were common, and asked Mr. Hunt to shop some comparisons. Mr. Hunt said he would contact the State of Florida, Brevard County, and some other jurisdictions. Mr. Bolon asked about merit increases. Mr. Hunt responded that line affects all departments with earned one-time bonuses, prizes, etc. Every employee receives the COLA adjustment of 2%, and up to 3% for merit. The average is about 2.5%. Mr. Bolon requested the names of recipients of merit bonuses in the last year, and how it was determined who got what. Ms. Weglein commented the list should be presented by department. Mr. Bolon commented originally the money was intended to make sure lower paid employees could enjoy a better standard. He said it seems now that the “upper people” are getting 3% while the lower paid people are getting the 1% and 2%.
Ms. McCahan commented on the $130,000 for attorney’s fees. Mr. Hunt responded the District pays more than that a year on attorney’s fees, and some of it may be recouped in fines and forfeitures. Mr. Bolon commented the Board should be working with the auditors rather than the attorney. Ms. Weglein responded the elevated amount has to do with the special circumstances of this year’s audit, and also the addition of Code Enforcement cases. Ms. McCahan commented on travel, training, and telephone. She asked if there was a way to reduce the cost of telephone service. Mr. Hunt responded the District switched telephone companies to lower that cost.
Ms. McCahan asked where in the budget there was a proposal for updating equipment. Mr. Hunt responded there are minor amounts of money in capital outlay and operating supplies. The District has not made a proposal to do anything significant in the two kitchens. Ms. McCahan commented in the 19th Hole the District couldn’t “offer additional food groups” or “improve sales” because the facilities won’t handle it. Equipment such as a dishwasher would at least allow for real silverware, and upgrade over the plastic spoons and forks the 19th Hole is using now. Mr. Hunt responded that would require a professional grade dishwasher, which would have to be replumbed and electrified, and space made for it. Mr. Hunt commented both kitchens would probably have to be redesigned to accommodate up-to-date equipment, and that may cost as much as $250,0000. Ms. McCahan asked if some of this could be dealt with in the budget each year. Mr. Hunt responded that is a policy decision for the Board to make. He said the 22 projects on the capital projects list comes first unless the Board reprioritizes the list. Ms. Weglein requested that Mr. Hunt look into using better quality utensils in the 19th Hole and the Lounge. Mr. Keegan suggested an alternative might be contracting out Food and Beverage and taking a percentage of the revenue.
Mr. Bolon commented on golf carts having free rein on the roads. Mr. Hunt responded he wasn’t aware of changes in the law regarding golf carts being used to transport only between someone’s home and the golf course. Ms. McCahan commented if anyone has an accident in a golf cart on Brevard County roads, it’s not covered. Mr. Bolon commented he was not aware the Board had authorized the use of the EZ-Goes for District employees.
Ms. Weglein commented on the golf revenues. Mr. Hunt responded the additional 5% increase generates approximately $27,000. The traditional $40,000 is increased to $95,000 (page 20), so the increase is $55,000. For every dollar the District asked Golf to put in, the District has matched it. Mr. Bolon asked if the District had requested One Source to take over its own equipment. Jim Kormondy responded that 5 pieces of equipment were needed immediately. Rather than the District leasing the equipment, [we] went through One Source, who had better connections with which to lease, etc. The District is paying proportionally. As owned equipment wears out, One Source will obtain replacements and the District will pay that lease as well. The District is purchasing the grinders. $95,000 covers grinders, $42,000 for lake bank improvements, and culvert replacements. The golf members raised enough money this year to replace 14 trees out of the 40 that were lost to the 2004 storms. Mr. Kormondy referred to the Plan for Major Golf Course Expenses [Exhibit A]. #1, #2, #3 and #5 are covered by the $95,000. Numbers 4 and 6 are separate.
Mr. Hunt commented painting the Community Center complex is on page 16, $40,000.
Ms. McCahan asked what “advertising” entailed. Mr. Hunt responded it was brochures, flyers, newspaper space, etc. Mr. Bolon asked about permanent hurricane shutters for the pro shop. Ed Geer responded the clear hurricane shutters would be left in place for the season once they are installed. Ms. Weglein informed Mr. Bolon, who was absent from the last meeting, that the Board approved a different bid. Ms. Donahue commented on the $8,500 for computers. Mr. Hunt responded that amount included upgrades to golf software and the registers.
Mr. Hunt recommended using the $4,000 to refurbish the pool tables in the billiards room at Pool 1. Pool furniture is being replaced. Mr. Bailey asked that umbrellas be included in with “pool furniture replacement”. Ms. Weglein and Ms. Donahue requested some kind of shade structure at Pool 2 where there is room for it.
Ms. Weglein asked if the District repairs the RV lots. Mr. Hunt responded the District repairs fences and electricity [and things of that nature].
Mr. Hunt commented this is a good example of what is budgeted is different than what the bank account says. The “General Fund bank account” has approximately $184,000 in it. The budget shows $3,150. This is primarily because $80,000 is reserve the Board set up in the past and $100,000 is currently theoretically on loan to the General Revenue Fund for the weir project. The District has not moved any money out of the General Fund because the District has not needed that $100,000, so the loan has not been made. However, it shows as a loan so [you] know you have a commitment for that money should it be needed. Mr. Bolon commented the District showed no bonding for 2006. Mr. Hunt replied it’s a semi-annual event and was not up for payment in 2006. Responding to Ms. Donahue, Mr. Hunt explained the District incurs certain expenses for November elections.
Mr. Keegan asked if the cost per square foot in the Shopping Center were comparable with what other businesses charge. Mr. Hunt replied that nearly all the leases currently in the Shopping Center run between $6.85 and $7.35 a square foot. In Roseland and Sebastian comparable square footage is $11.25. One of reasons appears to be that Barefoot Bay is seen as a private market and the tenants seldom get drive-by traffic from outside the Bay. This produces an artificial environment that has to be taken into account when making the leases. Mr. Bolon commented the Board would have to deal with the leasing issue eventually. Even in a “private market” the lease per square foot amount is too low. Mr. Hunt commented the Shopping Center painting will commence “next week”. Mr. Bailey asked if security cameras were slated for the Shopping Center area. Mr. Hunt responded the Board has directed staff to address the Shopping Center security cameras when the pools were done.
For the next five years, the storm water fund figures will mostly show loan repayments. Mr. Bolon commented it would be easier for the Board to track with an established paper trail. Mr. Hunt responded the $1.00 storm water fee is collected in the Special Revenue Fund, then transferred to the Storm Water Fund. For 2007, since the entire fee is going to the Special Revenue Fund, rather than bounce the figures in and out as a book keeping exercise, Mr. Hunt let it remain in the Special Revenue fund.
Mr. Keegan commented there is a lot of commercial interest in picking up bid packets. Mr. Hunt responded that 14 packages have been sent out. Ms. Weglein commented many residents are confused about the Pool 1 closure and reiterated it would be in 2007. The Building A restroom “engineering work only” is in this budget.
Tennis court resurfacing is #11 on the priorities list and is in the budget for $25,000. Mr. Bailey commented this time it needs to be done right. Mr. Hunt responded the money includes sub surfacing. Ms. McCahan asked about the softball field. Mr. Hunt responded that on page 12, repair and maintenance grounds $9,000 (R&M Grounds), includes the $5,750 contribution to softball on an annual basis. The $20,000 in the capital budget are all the things the District did this year in addition: the tractor, the fence, etc. Ms. Weglein requested the possible raising of salaries be put on the agenda. The budget is set up for it.
Ms. Weglein commented the total of the line items in this budget is $4,835,586.
Mr. Hunt commented this is essentially the bank statements. It shows what is being collected and expended each month in actual dollars. The first of the comparison figures is on page 5, wherein the District proposed to collect $4,882,125. What was actually collected in the bank account was $4,914,745. Balance that with (reference to page 12) total expenses. What was expended out of the bank that year was $4,772,421 or approximately $110,000 less than what was budgeted. The District was over in revenues and under in expenditures.
As of 4/1/06 there was approximately $720,000 in the active special revenue account. Mr. Hunt commented if there were things in the budge the Board wishes to change, or things to add, there are two ways to do it. There is enough fund balance to add some capital items, one-time expenditures. If the Board chooses to use the fund balance for operations, there probably is enough money for that if it is of a particular concern. There is probably $169,000 that could be expended. Ms. Donahue suggested saving the surplus for an emergency.
Ms. Weglein commented that at the meeting of June 2nd the Board members should have some idea of what changes they want in the budget.
Ms. Weglein entertained a motion to adjourn. Mr. Bolon made the motion to adjourn; Second Ms. Donahue. The motion carried unanimously. The meeting adjourned at 2:48 p.m.
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