Wellington Visioning Workshop Includes A Financial Warning

The Wellington Village Council conducted its second “visioning” workshop June 18, focusing not only on Wellington, but looking at the regional influences surrounding the community.

During the workshop, council members received sobering news from financial staff members. They reported that declining reserve funds could force either tax or assessment increases, and/or reduced services.

Mayor Bob Margolis complimented the staff, especially Projects Manager Mike O’Dell, for assembling a report that considered projects including Minto West and GL Homes, and the concurrent need for roadway development, including the State Road 7 extension.

“This is a continuation from last year, and first I want to say staff has done a phenomenal job of putting this together and really focusing on certainly what’s going on around us with the many thousands of homes that will be built… and a million-and-a-half square feet of commercial space… that could potentially impact the Village of Wellington.”

Margolis said the visioning process is important to keep Wellington a destination for people rather than a pass-through to other communities.

Village Manager Paul Schofield encouraged council members and staff to engage in a dialogue.

“If we look at what came out of last year’s visioning session, there were really a lot of good ideas, and we’ve been putting them into operation,” he said. “You’ll see some of that in this year’s budget.”

The main issues to focus on included what is anticipated to occur around the village in the next 20 to 40 years, the concept of a “midtown” area near the Wellington Municipal Complex, future budget considerations and more.

“We work best as a staff when we get direction from the council,” Schofield said.

O’Dell noted that the oldest parts of Wellington date back to the 1970s. He pointed out that the major economic drivers in those years were Motorola, IBM and Pratt & Whitney, along with other companies that are no longer present.

“Wellington was actually thought about as a community that had high recreational uses, and the workplace was somewhere else,” O’Dell said, adding that he thought the village has retained that image to some extent. “No matter what we look at, that’s our roots.”

In 1982, the vision of Wellington was diverted into the equestrian arena.

“We expanded that, and that’s where the Country Place PUD came into it, so we had some activities going on in Saddle Trail and Paddock Park, which were somewhat equestrian-related, but that’s basically where we were,” he said.

O’Dell said that course of action has now been largely completed.

“We are a municipality, we have a variety of housing, we have great schools, commercial centers, civic amenities and we have great parks,” he said, asking what courses of action they need to sustain the community.

Councilwoman Anne Gerwig said she wanted to include local businesses that have helped the village thrive, pointing out that she and O’Dell were among the business people who started successful enterprises here.

“I don’t want to gloss over that,” Gerwig said. “I think it is something that we should be focusing on because of the quality of life. People don’t want to travel 45 minutes to work anymore. People do want to live, work and play here, and it has made my quality of life completely different.”

Vice Mayor John Greene said that he disagreed, to an extent, pointing out that he had worked in Miami for some time but wanted his wife and children to be in a family-oriented community.

“I was willing to make that sacrifice, and I think a lot of people are,” Greene said. “I agree that [local] businesses are an important component, but we are not competing with downtown West Palm Beach… We don’t get that look when we are trying to attract businesses, but wherever those corporate entities end up, I think they always look at Wellington as a place to invest and buy a home and raise their families.”

Greene said he didn’t think that Wellington should change its identity. “Let’s not sell out in terms of our identity and what makes Wellington unique, otherwise Wellington will be a pass-through community,” he said.

Director of Operations Jim Barnes said Gerwig and Greene were both correct in that they both wanted to raise families in Wellington, whether they wanted to have a local business or commute to work.

Greene said it is always exciting to go other places as a representative of the village.

“This brand has so much value throughout Palm Beach County, in Florida, around the country,” he said. “People hear about Wellington, and we’re relevant for a reason, so let’s not lose sight of that.”

Administrative & Financial Services Director Tanya Quickel said the financial outlook for Wellington is excellent, although the council will face some tough decisions in coming years.

“We heard that from the auditor,” Quickel said. “We’re starting to work on the 2016 budget, and we have discussed some of our preliminary work with you. You are to be commended for years of continuing to keep Wellington in that position, but we’ve also heard from the auditor that we need to be aware of our use of fund balances going forward, and this visioning is the perfect time to put that in focus.”

She pointed out that this year, more than $900,000 in rate stabilization and unrestricted funds were used to balance the budget, and that about $800,000, and about $1.3 million in Acme fund reserves are being looked at to balance the 2016 budget.

Quickel said that in order to sustain services, the shortfall would continue to grow with the current 2.45 millage rate, which equates to $2.45 per $1,000 assessed property value.

“We will continue to use more and more fund reserves from both the general fund and Acme,” she said, adding that current gas tax revenue will not cover road maintenance.

For 2016, she said, $1.74 million in reserves may be needed to offset the shortfall, and the recreation impact fees will not fully finance debt service requirements.

Quickel said the village would have to use $653,000 in 2016 to offset the shortfall in recreation impact fees.

Even with the current 9.7 percent increase in total property value, she said, at the current millage rate, general fund reserves would fall below the recommended 25 percent in 2019. At the rollback rate of 2.26 mills, general fund reserves would fall below 25 percent next year.

The current general fund balance is projected to be $16 million at the end of 2016, which is 40 percent, she said.

“That is very good, but the considerations are for the next few years, with what we’re using from Acme of $1.3 million, as well as we project a 20 percent decline in the building [department] fund going forward,” Quickel said, explaining that staff is recommending using $658,000 in reserves to balance the 2016 building fund, projecting that the current fund balance of $4 million would be depleted by 2021.

After spending $1.3 million, the Acme fund balance would be $2 million.

“In one additional year, 2017, we will be virtually at a zero fund balance for Acme,” she said.

Quickel said options include increasing the Acme assessment, reducing service or returning to use of the general fund, which has been done in the past.

Schofield noted that as building permits and impact fees decrease, there will be a corresponding decrease in building department staff, which would be reflected starting in 2016.