Good afternoon, everybody. Welcome to the Delray Beach City Commission Budget Workshop this Tuesday, May 19th. If the clerk would please call the roll. Deputy Vice Mayor Markert. Here. Commissioner Mullica. Here. Commissioner Cassell. Here. Vice Mayor Burns is absent. Mayor Carney. Here. We have a quorum. Thank you very much. The first part of our meeting 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 also an overview of zero-based budgeting, now you would come up and speak at the lecture. 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 not sure. Are you here talking about the budget? Yes. Okay. Because. Okay. I'm just making sure, because otherwise 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 going to talk about today? I, 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 install the fence? 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 ask this. So, as part of the operations budget, as well as our 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 going to 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 discussed later? Can I give you a pen and paper? You can write down your number, hand it to the city manager, and he can contact you. Okay, great. Thank you, Commissioner. In answer to your question, Mr. Metod, why don't you just go with Mr. Metod 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 going to be talked about today? Mr. 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, the 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? Thank you. I was leaving it here. And, miss, I would just say 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, we're pleased to have the preliminary budget discussions. You would like to take the floor first to discuss the zero-based budgeting analysis? 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 its 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 iPaaS 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 1970s. 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 rarely 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. Next slide, please. 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 5th workshop meeting as well as for departments of public works, utilities, and parkouration 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 you communicated with me in recent weeks, I thought it was important to offer this overview to provide clarity and context as to why we are proceeding in this realm. So, again, as each department director who spoke during the May 5th 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 is 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 the 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 I requested it, my understanding was we were going to do the traditional because when you use 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 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'm disappointed that we're not doing a real deal of zero-based budgeting because, as I said, you use your budget to build on the budget. You – it's almost impossible to find savings. That's my view. Are there any other comments on here? 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 a 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 it 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 up there, Mr. Mayor. Excuse me. I appreciate that, Commissioner Cassell, Mr. Mayor. And it's important to also highlight the experiences for fiscal year 2025-2026 in 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. 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 Datkowitz 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, Mr. Mayor, 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 the 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 have one quick comment. I'm, as I said in meeting number one, I'm not a fan of zero-based budgets. That is not my way to do it unless you're in a failing business situation, which I have been in my career. That's when I would employ a zero-based budget. So I'm a little offside with the process, but the outcome can still be fine based on what you laid out. At the end of the day, for me, what is going to need to be transparent for all the departments is what are we going to keep doing? What are we going to stop doing? That's the hardest one in any budget cycle. But what are we going to 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 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 7% or 8% right now, in my opinion, of a hole that we have based on world events right now. And that's going to put a lot of pressure 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've been discussing that 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 hole like every other business right now. And, you know, and compound that with the fact that Delray's doing pretty good right now. Like we're not like those businesses in the 70s that you described, that, you know, there were dark moments back then. We're not in that moment right now. So 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's what I'm going to be looking for, Mr. Moore, as we go on. And I'm confident we can do that. And after we hear from Commissioner Malika, I'd like to summarize what the next steps are, because it does address exactly what you're describing, Mr. Marker. Amen. I would just say I agree with Commissioner Casale 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 9th session. And, in essence, the city of DeRay Beach, the office of the city manager and the department of finance working collaboratively, will outline a number of scenarios based on expectations, 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 order of business in the next three weeks. So, we'll have several different scenarios to take under consideration inflationary pressures, what the 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 9th for that purpose, between 3.30 and 5, so that we can get to that place, because your meeting calendar in the month of June are the 2nd and the 9th of that day. So, we'll be able to utilize that time wisely and efficiently. So, thank you. Thank you. So, Mr. 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 is the Assistant Director of Public Works, who has agreed to be my button pusher today, alleviating all of you from that 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, stormwater 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 additional 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 re-nourishment 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 Stormwater Utility Fund is funded by, partially funded by, stormwater tax assessments. As you know, over the last few years, we have worked on increasing those stormwater 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 30 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 Stormwater Utility Assessment did not cover. And this year, moving forward, we're going to be looking at doing referendum bonds and paying back that debt service through the Stormwater Utility Assessment in order to provide those millions of dollars annually that we need to accomplish those projects. So, initially, I 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 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 Corrali. 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 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 the service 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 Q2 variance report, which that means second quarter, the one that we got was sent to us at about 58% of the fiscal year 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 a solid handle on exactly how much that is going to be. For public transportation services, at your goal setting session, you asked us to look at expanding the freebie service or some other form 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's 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. The second one to improve 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 the 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 you 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 million 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 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 million annually out of a $14.7 million budget. The operating funds are $3.7 million. We spend about just under $1.9 million on utility services and waste management. Our parking management contract is $1,281,410 every year. And our lease and funding agreements, these are leases that we hold with FEC, with the Presbyterian Church for the Gleason parking lot. Those kind of, we have various leases that we have to provide railroad crossings and parking areas throughout the city. That also, all of those, well, the vast majority of those 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. Can I ask a question before you move on to the next slide, please? Mayor, may I? Yes, please. The total budget that you show, is that at what level of service are you assuming that is? That's at our current level of service. Okay, which is below our, that's the first column. Thank you. Actually below the optimal, but... Exactly. I noticed that. But 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, include salary for 13 full-time and one part-time employee. They do all of the preventive maintenance costs on the vehicle replacement. As we've implemented the Capital Lease Purchase Program over the last two years, those vehicle maintenance costs are going down because the general age 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 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 around $70,000. So 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, so 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. We're not asking for anything new, different, or special. So the fleet budget level overview is very similar. Salary and benefits is just under $1.6 million. Again, the difference here is that our fuel costs outrank all of the other expenses in the fleet division. So they're at about $1.89 million. This number is subject to increase as fuel prices continue to rise. So we are looking at that and 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 don't have any beach renourishment projects. We don't have any major construction projects. Everything out there is new and ready to go. The Parks and Recreation Department does have a contract for the beach raker that scrapes up the seaweed and is also working at lowering the scarps that are on the beach. They've done a very good job in a very short period of time of making those scarps 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 stormwater, there are two divisions in stormwater administration and maintenance. The administration of the stormwater 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 we going to be doing questions? I'd like to just comment if I may. Fine. Just because you may. You may be reckoned. Thank you. I appreciate that. Just because you're going to 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 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 or 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, 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 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 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 asking 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, Mr. Moore. Thank you. First of all, that was great. Back to what I said, Mr. Moore, one of the things that I'm going to want down the road is just to see what you cut and what you're going to maintain. And then I want to balance that against some of the priorities that we all collectively have. And I echo Commissioner Casale's comments. I mean, we're asking you to do a lot and we're only giving you the extra amount of money so we need to know how you're going to 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, that's another big, beefy project that we need to do it. But I also know that's going 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 of resources financially and people, I'm sure, to do. And it's important to us so we have to do it. But 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 Moore, could you? Can I 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 on June 9th 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 9th workshop meeting as it relates to the proposed budget process. I actually have a comment on that but I'm going to save it at the end of the meeting because it has to do with all the budgetary items because we need to give you direction as to what we think at the end of the day. Of course. That's what I was just saying. Of course. I don't know that. Yeah. Of course. Thank you very much, Ms. Barlett. No, there is not. I'm sorry, ma'am. Too bad. I apologize. At this time, we have Director of Utilities Hassan Hajimiri to provide his overview. Mr. Hajimiri, please. I am my own assistant today. Good afternoon, Mayor, Commissioner, Hassan Hajimiri, Utilities Department. Thank you for the opportunity to give you a brief overview of Utilities' fiscal year 2027 budget. Just a quick overview. Utilities Department provide water, wastewater, and reclaimed water services to over 70,000 residents within a 17-square mile of the city of Del Rey Beach. On average, we provide 14 million gallons per day of drinking water. We collect 8 million gallons per day of the wastewater and provide 2.3 million gallons for irrigation. 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 operators. 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 skater system. So this is our admin. Just a quick synopsis of what we did in 2025. We treated, processed and treated 5 billion gallons of drinking water throughout the whole year. 900 million gallons of reclaimed water for irrigation to care of the 7,316 forward calls that we get for various reasons. Over 2,000 permit application 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 and counting. 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 the 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 city's general fund, which I have a table that it 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 2027 is 5.4% less than 2026, adopted budget for 2026. Numbers are there. And there, as you see, I'm going to put my glasses. We have, none of them work. Our operating budget is 21,467,000. Our depreciation is 4.7 million. Our contribution toward the administration expenses, that's the general fund. And credit card and professional services is 4.9 million. But out of that, 4.7 million of it is for administration services that utility transfer to general fund. And on top of that, we also transfer another 4.7 million to general fund. So, in any given year, about $9.9 million of utilities fund is being contributed toward the general fund. What's the depreciation in the operating budget consist of? 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's just for the, because we have close to probably half a billion dollars worth of, you know, inventory in our system. The water plant, the pipelines, the pump station. Oh, that comes under the operating stuff, though? That is what the, inventory for the? That is not something that we are in control. Finance assigned those numbers, 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, just 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 your presentation. Yes. 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 to 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 for one moment, from the utilities versus going into, say, a utility fund or something like that or why it's even, I am. Right. I have, 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 Mr. Moore, 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 4.7 million? Correct. Oh yeah, that's, 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 from. Isn't 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, there's 4.9 and 4.7, there are three different figures in the pink line items. I would have a better, I have requested from Mr. Dakowitz, I think two weeks ago, to give me a full explanation for all those I'd like that explanation as well. And the formula that is being calculated. So I have, I think it was two weeks ago I was requested. Okay. And I think his steps are working. So we'll follow up with everybody and provide that response. Because it is technical accounting in that regard. Yeah, and not, yes, curious. Fair enough. I'd like an answer. Thank you. It is basically more than a 50% of our operating budget. Correct. Yes. Thank you. 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, so our customers are much, much more considerate when it comes to using water. water because in Del Rey, more than a 65% of the water that has been produced is for irrigation only, not for drinking. So if, if people don't irrigate at all, we're going to have probably close to, I would say, 8 million gallons per day of demand. But our demand goes way, way higher, you know, especially during the 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 going to, I can go there, I can switch right now. No, no, that's just a question. We do actually have one active project that is going right now to bring the reclaimed water to a cemetery. Oh, great. And a couple of schools right near that. but one thing is reclaimed water system, it's just like a water distribution. So if you want to take reclaimed water to the neighborhood, you've got to 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 decades, that is not the best way to use reclaimed water. Reclaimed water becomes very, very beneficial when you have like a tennis court. I'm sorry, golf course. Golf course. Golf course and parks. Those are the best places because you have one point of connection and then they have to irrigate and you don't have to monitor. That makes sense. So that is one of the reasons 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. So this is a capture of our personnel and operating costs. We chose 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 million 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 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 of 2023, that when it went to effect, that was based on the calculation. second year was 6%. Third year was 7%. And last October 1, 2025, it was 9%. So total, we're bringing in $910,000 more per month as a result of the rate study, the rate adjustment that we did. And besides 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, I looked at the account that for the 20 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 months 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 up the water. I said, yes, because if you don't pay, somebody 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 is because of when they collect the money and then when we deposit it. 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 operation. Quickly, that's the same graph. It shows one of them is going way down. It is not going to like that anymore because we get 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 increase that are coming. And that is to support the water treatment plan. We had one revenue bond that went to effect last year. We're going to have another one hopefully by the end of this year. And within five years from now we have to make about $2.3 million a month for the payment of that. So I'm taking 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 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 the, if you 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 hundred dollars different. Oh my God, what is this? This is, I'm going to throw 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 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 and 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. Those water meter, they have reached their end of useful life, which is only 10, 11 years. Usually they need to last much longer, but the electronic part of those are failing. I know one of the items tonight is the badger meter. I can address that at any time if you would like. I like to do that project within the next two months or so. Yes, Mr. 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 while 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. Let's talk about that now because that is a relevant question. That is, we have had so much correspondence with the badger last year after two years of meeting me and Mr. Moore with them so we finally got them here. They replaced 5,329 I'm not sure of the meters that they were not communicating. About three years ago we had 9,000 meters that they were not communicating and utility building was estimating close to 9,000 meters and you remember in December of 2023 and early 2024 all 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 of 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 reason and as part of that we're going to put it 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 in the full compliance and the most effective way that it could be run that utility. What does the new residential meter cost? It depends. 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 eighths inch. I have a five eighths inch meter and here the houses one third of my house size they got two inch meter. I don't know why. So hopefully it's just for some reason. I don't know what the reason is. The cost for the meter itself it depends. We are going to hopefully by end of the year to the competitive bedding process and make sure we get the best meter for the city because that meter is going to be I personally want to go with a minimum of 15 years of full warranty not prorated not you know pulling a tooth out of the meter factory manufacturers out. No that's what we want 15 years. After that I'm gone who cares. No no actually 15 years is a maximum. I have read a lot of literature most of them are producing the decent manufacturer I'm not saying nothing negative about the badger but their services is no good and 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. 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 million dollars in 27 and 110 million in 28 because that's where the most of the money is going to be spent toward the last part of the water plant. And besides that I'm sorry if I took too long. That's okay. Is there any other questions that you have? I'm going to 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're really just bringing the depreciation back to the money but we're the source of the original money. That should be easy to answer though. Because it's a depreciating asset is what you've done. So I'm just curious. 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 it all seems necessary and I'm just going to remind every resident when we consider your budget and your increase you went out of your way to collect over two million in uncollected money for the taxpayers. You are always always looking out for Delaware taxpayers and I appreciate you. Thank you. Our final presentation for this evening's workshop is Director of Parks and Recreation Sam Meatot. Mr. Meatot if you would please. Good evening Mayor and Commissioner Sam Meatot, Parks and Recreation. Luckily I'm going to be a little bit quicker than Mr. Hassan. All right. 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. 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 Parks and Recreation is Parks and Recreation because it's two separate divisions all together. 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. There's five recreation centers. We incorporate all of our youth and adult athletic programs, all of your 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 city wide 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 pretty straightforward this year, it's very very simple and that is there's not much to it other than increase in our non-discretionary 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 our 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. Even the payments to the DDA for the operation of Old School Square, the money is put into the parks budget and 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 non-discretionary 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 what 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 St. Patrick's Day. I know that is a question for some right now 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 want to remove that number before we go further but it might be a reduction for something like that. Hopefully we have answers before we get too far down this budget cycle where we can plan accordingly but I'd want to 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 got to go add something back. And then the next is our park side of the maintenance of the budget and that is again not a lot there. The biggest increase is just all those costs and things that I mentioned. When Hassan talks about the water rate and all that new revenue I always tell him that I have to be his biggest customer. We spend a lot of money on water on watering all of the parks and playing surfaces for athletics 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 back flows and all of our parks so that has been a pretty big cost. We have over 300 back flows 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 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. 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 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 anticipated an extremely busy year but it just has nothing to do with our operating expense. It's a lot of projects that you guys are all very, very familiar that we anticipate over the next 18 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. Do any commissioners wishing to do it? 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. Okay. So probably at the most 10% is being forecast. So it's a 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. Does anybody else wish to be recognized? Thank you very much, Mr. Thank you, Todd. I just wanted to, I said I had something to say and it's kind of what Commissioner Gasol does, but we have, 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, but 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 really think we need to decide. May I? Can I finish up here, right? Sure. So I think we need to decide that. Now, I don't know, I don't know tonight's the night to decide that, but we need to give direction as to what we want so that you can then take whatever numbers we decide and say, and get back to the department and say, okay, you have X amount of dollars to spend because this is what's good the rate's going to be. I don't think we even 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, it's coming soon, but I don't know if we've got it yet. What is it, June 1st it comes, more or less? Thereabouts. If I may, Mr. Mayor? Sure. Pardon me, Commissioner. However, my outline regarding the June 9th workshop meeting will begin the process of defining what that might look 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 figures are, so I don't know how we play with them. Yes, sir. Can I make a suggestion? I'm just saying we have limited choices. At some point, we have to tell them how do they have to sharpen their pencil, how much they have to sharpen their pencil, or they don't have to sharpen their pencil. 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. Are 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 costs. So 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 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 yet. I'm not disagreeing with you. I'm saying, by the way, I wasn't cut. What I was upset is that they didn't tell us first. That was what I was upset about. I know, and I understand that, but I think there was a lack of clarity, because we didn't have a, we needed to, Mr. Moore needs to, instead of moving on one-on-one conversations, bring that out for a consensus, because... But in order for you, 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, the backup is what, you know, you can't, how do you say, how do you cut administrative expenses without knowing, you know, in detail what they're doing? Well, Missy has been running her department, Ms. Barletto, with the same number of staff for many, many years, and they're doing much more work. I'm not arguing, I'm not arguing... I'm not arguing... 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 $1,000 more in one department than the other. I don't disagree with what you're 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'd 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 want to do that again. That's a discussion for another day. It is a discussion for another day, but I'm saying is, it's not my reserve analysis. I don't want to keep on debating this. It's what the organization tells you it is. It's what Mr. Moore presented it is. It changed. I'm not fighting that. I'm just saying, I think we need to budget appropriately. Points to me. Thank you. And likewise. Are there any other comments? I'm sorry. Please. Continue. Then I'll respond. I just have a quick one. I agree with Commissioner Casale, and I think that's what you said you're going to provide us in the June 9th meeting. Yes, sir. And that is the conclusion. I really just want to see, you know, and look, your direct reports are terrific. I just want to see from them, you know, what's included in the budget? Where did we have to sacrifice? And then let's talk about the strategic priorities, some of the things that we want to do. June 9th priorities. Could I ask a question about 9th? 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 going to calculate out those four levels? It may be more than four scenarios. Okay. Based on all we've heard, all we know, what's been communicated in every session. So you don't want us to give you our feedback 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 aligned 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 sheets, knowing 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 9th meeting. Well, if we're going to get comments to you prior to the June 9th meeting, I need to see those figures before the June 9th 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 that each one of the departments who made a presentation have a general idea of what's in those numbers because they came up with a final number. So they've got to know what math was involved in finding those numbers. Well, it's in there at staffing level. There was a number of employees. 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, we'll be in position to work with the Department of Finance over the next few days or so to begin providing information so that you can get that back to me. So the first week of June, of course, between 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 9th 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 9th workshop meeting. So on that note, I'll be happy to oblige. So we'll get you some base information along those lines. It's 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, Mr. Mayor. I'm just speaking the truth. Otherwise, I'm all set. I yield at this time. Thank you. We are adjourned.