Minutes for June 2, 2006
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DRAFT
Board of Trustees
Workshop Meeting
Friday, June 2, 2006
1:00 p.m. – Building D&E
Madame Chairman Wilma Weglein called the meeting to order at 1:00 p.m.
Ms. Weglein requested a moment of prayer for all armed services at home and abroad, and where ever they may be serving. Amen.
Ms. Weglein led the Pledge of Allegiance to the flag.
Ms. Weglein commented audience participation regarding the budget could take place at the Board of Trustees meeting on June 9th. Ms. McCahan presented a Food and Beverage request for funds from unbudgeted fund balances. [Exhibit A] A tiki bar would eliminate a problem for many of the Lounge patrons who smoke.
Mr. Keegan asked if the District currently had vending machines. Mr. Armstrong responded the current vending machines are contracted out and the Bay is not receiving a part of the profits. Mr. Keegan commented it is quite expensive to maintain vending machines: mechanics are specialists, trucks are necessary to deliver product. Mr. Keegan mentioned several other drawbacks to owning vending machines. Mr. Hunt commented it would be a “trial and error” process. Mr. Bolon concurred with contracting out the vending machines and retaining a percentage of the profits as long as the contractor were to maintain the machines. Ms. Donahue asked if the District were aware of how much revenue the current vending machines generate. Mr. Hunt responded the companies do not share that information with the District. Mr. Keegan commented the dollar bill changers are very intricate and require specialized training Ms Weglein asked Mr. Armstrong to canvas “other vendors” to ascertain if the District could enter into a different kind of vending agreement whereby the District could realize some profit from having the vending machines on District property. Ms. Weglein asked if there were restrictions on having a Panini grill inside the Lounge. Mr. Armstrong said that would have to be checked out. Mr. Smith asked about the tiki bar. Mr. Hunt replied the project would be done “in house” and would cost approximately $12, 000. Ms. Donahue asked if a commercial dishwasher and a change in venue because of it would require a different licensing set-up. Mr. Armstrong responded he did not believe it would. The facilities are currently licensed as snack bars. Ms. Donahue made the point that a dishwasher would upgrade the facilities to “restaurant” and the standards for that are different. Mr. Bailey requested these concerns, and if the fire codes would change, be investigated. Mr. Hunt agreed to investigate. Mr. Bolon reminded the Board of the “no competition clause” in the leases at the Shopping Center. Ms. McCahan reiterated that upgrading the flatware and serving dishes at the Bay’s facilities would not be competition so much as making things more attractive for existing patrons and to attract new ones. Mr. Armstrong asked the Board to consider an I.D. verifier. Mr. Bolon commented that might also work for resident badges. Mr. Bolon requested that Mr. Hunt investigate the cost of such a system. Mr. Bailey commented a lot of food is served out of the kitchen at Building A. The District may want to consider a dishwasher there when it considers a new stove.
To inform the Board regarding discussions of the $1.25 that is transferred to the operations budget each year, Mr. Hunt provided portions of the minutes from June 6, 2005, and Resolution 05-06 from July 26, 2005 (Exhibit B). Mr. Hunt commented that as the District accomplishes the capital programs, the need for capital money is going to go down. However, the cost of doing business is going up every year. At the end of four years there will still be $6.25 a month for capital, which is in excess of $350,000 coming in. This keeps abreast of operations without having to raise the monthly fee. Mr. Hunt explained the average increase in employee salaries was 2.5% for merit, and COLA 2%. On top of that is another 5% to Public Works for a total of about 9.5%.
Mr. Bolon commented on the $534,000 a year going into capital. Mr. Hunt responded the $9.00 figure is on the revenue side. That is how much the $9.00 (option) for the proposed budget last year produced in revenue. Each year on the expenditure side, the District transfers more to operations in order to accommodate annual operating expenses. Mr. Hunt said he would have been remiss to tell the Board that the $1.00 raised last year for operations would hold good for operations for 4 years. The $56.00 assessment fee rate will be good for 4 years. Also, the capital program the Board envisioned will be accomplished in those 4 years. The funding operation increases each of the four years.
Mr. Keegan recalled Joe Anderson, Food and Beverage Manager. Mr. Keegan asked Mr. Anderson if he had given thought to cost of goods, and a profit and loss statement that would pinpoint where the need for subsidizing is. Mr. Anderson indicated he had experience in this area. Mr. Keegan asked if Mr. Anderson thought the cost of goods would increase to the point the cost of product would have to be subsidized even more. Mr. Hunt responded, “It’s two-fold. [We] did a minimal per-unit cost increase 8 or 9 months ago. What Food and Beverage has endeavored to do since then is reduce costs and increase volume. Given the nature of the food being prepared and served [here], [we] always have to be cognizant of the breakpoint where people won’t pay any more for what [you’re] serving.” It appears through the years there has been a conscious decision to subsidize Food and Beverage. When the Board makes a decision to upgrade the product it will have to return to the question of dishwashers and refrigerators.
Ms. McCahan commented Mr. Anderson has been working with the Finance Manager to produce a profit and loss statement that will reflect disbursements as well as revenue. Mr. Bailey urged the Board members to take an in-depth look at the policy of planned subsidies. Ms. McCahan reminded the Board she had brought this up at a previous meeting; subsidies should stop at 1 or 2 %. Ms. McCahan requested Mr. Hunt to provide a “numbers crunch” indicating how much the District subsidizes each facility (including golf and tennis), what the actual cost is for each club to use the facilities. Mr. Hunt commented subsidies must be balanced against the annual maintenance fee. Mr. Hunt complimented the Board on doing a “good job” of keeping the monthly maintenance fee low and still subsidizing what it wants to. Ms. Weglein commented that Holiday Park charges $150 a month for fewer facilities than the Bay provides. Ms. McCahan commented if the District raised the maintenance fee $1 or $2 a year instead of $9 or $10 once in a while, it would be less painful for the residents. Mr. Smith urged the Board to review subsidies and to find additional ways to increase revenue.
Mr. Hunt responded the District is, in effect, raising the amount used for operations every year. People aren’t physically feeling it. If the fund balance exceeds $1.25, it means the money is left over in the capital fund. It can’t be spent because [you] can’t get any busier anyway. It would not be effective to collect the $9.00 from the capital fund and then add $1.25 on top of that because the District couldn’t spend the whole $9.00 in one year on all the capital projects. Mr. Hunt commented the fund balance shows that the capital fund may roll over $165,000 into next year’s budget.
Ms. Weglein asked what kind of money was expected from the Code violations. Mr. Hunt responded that so far the District has taken in $6 or 7 thousand. On page 4, under Code Enforcement fines, the figure is doubled. Mr. Bolon commented about replacing Building F. Mr. Hunt responded that Building F placed 18th on the list of 22 capital projects. The end of 2007 will have addressed 13 of the 22 projects. Mr. Bolon asked if fees for permits were in effect. The District’s proposal is $10.00 for each ARCC permit. The Board must vote on it.
Ms. Weglein commented Barefoot Bay charges $490 a year for a single golf membership. That seems very low. She asked Mr. Hunt to compile a comparison of our fees with other golf courses in similar circumstances. Ms. Weglein said Melbourne Municipal charges $503 and they have been losing money. Mr. Kormondy commented there are also seasonal memberships and associate memberships. Seasonal memberships expire in March and renew in October. (Exhibits C and D)
Mr. Bolon asked Mr. Hunt if there had been a study done comparing routine vehicle maintenance done in-house and contracted out. Mr. Hunt responded he was not aware of any study having been done. Mr. Bailey commented some of the trucks are 20 years old, which makes maintenance more expensive and parts hard to get. If the Bay had a newer fleet, it would be reasonable to contract out maintenance. Mr. Bolon commented he is concerned the Bay’s mechanic on duty is making more money than his boss. Mr. Hunt commented the mechanic in question keeps aged fleet running, services an incredible variety of machines and equipment including the air conditioning system. The work he does would have to be farmed out to several outside agencies, and would cost the District much more money than having it done in-house.
Ms. Weglein commented on the list of square feet available detailed in Mr. Dobrochowski’s list of the Shopping Center. Mr. Hunt pointed out that a reference to “the Peddler” also included the water department. Mr. Keegan asked if leases are reviewed for increases as they expire. Mr. Smith asked what the status of the Peddler lease is. Mr. Hunt responded that Dawn Hawkins has the right to renew the Peddler lease under the current terms for another 3 years. Mr. Smith asked if the lease had been signed. Mr. Hunt responded he would obtain that information.
Mr. Hunt commented he has been approached to rent the insurance space in the Shopping Center. Certain prospects have volunteered to install a restroom. Mr. Hunt explained that by the time credit was granted for building the restroom, the District would be granting free rent for a year or two. Mr. Bolon commented the safe in that space is an ideal place to keep District records; he prefers to keep the space as storage. Ms. Weglein asked the Board if everyone concurred; the Board members nodded unanimously. Ms. Weglein confirmed for the record that the Board members wished to keep the insurance space as storage.
Ms. Weglein entertained a motion to adjourn. Ms. Donahue made the motion to adjourn. Second Mr. Bailey. The meeting adjourned at 2.07 p.m.
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