LTC 367-2019 FY 2018-19 Second Quarter AnalysisMIAMI BEACH
OFFICE OF THE CITY MANAGER
LTC# 367-2019
TO: Mayor Dan Gelber and Members
FROM: Jimmy L. Morales, City Manage
DATE: June 26, 2019
SUBJECT: FY 2018/19 Second Quarter Analy is
The purpose of this Letter to Commission (l TC) is to provide the Mayor and City Commission
with the status of the FY 2018/19 operating budget to actual revenues and expenses incurred
for the second quarter ending March 31, 2019, with projections through fiscal year-end
September 30, 2019. The City's Charter requires that "the City Manager shall make public a
quarterly report showing the actual expenditures during the quarter just ended against one
quarter of the proposed annual expenditures set forth in the budget."
The first six months of any fiscal year are not a definitive indication of the experience for the
remainder of the fiscal year, but do, however, provide a better glance at identifying any potential
issues compared to the first quarter of any fiscal year. Certain assumptions for both revenues
and expenditures have been made, which are still being further refined and will be adjusted for
in later projections as additional information becomes available . These assumptions, along with
our continued effort at managing the City's resources and ongoing adjustments to line item
revenues and expenditures throughout the year, will impact projections looking ahead.
The FY 2018/19 budgets for the General Fund, Enterprise Funds, Internal Service Funds, and
Special Revenue Funds were adopted by the Mayor and City Commission on September 26,
2018, through Resolution No. 2018-30512.
The First Amendment to the General Fund, Enterprise Funds, Internal Service Funds, and
Special Revenue Funds budgets for FY 2018/19 was adopted by the Mayor and City
Commission on November 14, 2018, as amended, through Resolution No. 2018-30608.
The First Amendment recognized a preliminary FY 2017/18 year-end surplus of approximately
$12.8 million in the General Fund to be allocated for the following:
1) $1.4 million to be carried forward into FY 2018/19 to fund goods and/or services that
were procured, but not received in FY 2017/18 due to timing issues between fiscal
years;
2) $2.8 million to be carried forward into FY 2018/19 for projects that were originally
budgeted in FY 2017/18, but not completed due to timing issues between fiscal years;
3) $1.1 million to be set-aside to fund "one-time" expenditures adopted in the FY 2018/1 9
General Fund budget in accordance with Resolution No. 2006-26341 ;
4) $5 .1 million to be set-aside to achieve the City's goal of maintaining an additional 6
percent (%) contingency reserve in the General Fund;
5) $935,000 to be carried forward into FY 2018/19 for additional one-time expenditures;
Letter to Commission (LTC) -FY 2018119 Second Quarter Analysis
Page 2 of 14
6) $729,000 to be set-aside as General Fund contingency in the FY 2018/19 operating
budget for funding of temporary storm water pumps; and
7) $729,000 to be carried forward and transferred to the Pay-As-You-Go Capital Fund to
provide for additional funding capacity of capital projects during FY 2018/19.
In addition, the First Amendment appropriated $2.3 million of encumbrances in the Enterprise
Funds, $157,000 of encumbrances in the Internal Service Funds, and $1.5 million of
encumbrances in the Special Revenue Funds for goods and/or services procured in FY
2017/18, but not yet received and expended, which were carried over to the respective FY
2018/19 operating budgets.
Similarly, $2.2 million, $1.5 million, and $1.6 million was appropriated in the Enterprise, Internal
Service, and Special Revenue Funds, respectively, for projects carried forward from FY 2017/18
to FY 2018/19 that were budgeted, but not completed during FY 2017/18.
Lastly, the First Amendment included the realignment of the Emergency Management
Department's budget to the Fire Department, as part of a reorganization of operations and
functions of the department. This realignment resulted in the Department of Emergency
Management becoming a division of the Fire Department.
The Second Amendment to the FY 2018/19 operating budget adopted by the City Commission
on April 10, 2019 through Resolution 2019-30791 appropriated funding in the amount of
$175,000 for two new positions and two existing positions transitioning from project
management of the Miami Beach Convention Center campus project in the City Manager's
Office to provide program management of the $439 million General Obligation (G.O.) Bond
Program approved by the City of Miami Beach voters on November 6, 2018. The costs of
program management of the G.O. Bond program (4 positions) will be charged back to the
capital projects funded by the voter-approved G.O. Bond.
The Second Amendment also appropriated funding in the amounts of $51,000 and $46,000 for
two positions in the Procurement and Property Management Departments to implement the
voter-approved G.O. Bond projects through the realignment of savings projected in the current
year amended budgets to preserve flexibility in workload and not increase the overhead costs to
the G.O. Bond projects.
The ensuing second quarter projections include the projected FY 2018/19 impact of the labor
agreement reached between the City and the Communications Workers of America (CWA) for
the period of October 1, 2016 to September 30, 2018, which was ratified by the CWA on
November 9, 2018 and subsequently adopted by the City Commission through Resolution 2018-
30614. In accordance with this agreement, the parties agreed to 1 percent, 2 percent, and 1
percent cost of living adjustments to be made commencing the first full pay period after October
1st of 2018, 2019, and 2020, respectively .
It is, however, important to note that as of April 30, 2019, all five of the City's collective
bargaining agreements expired. With the exception of the new agreement ratified by the City
Commission on May 8, 2019, through Resolution 2019-30831, with the International Association
of Fire Fighters (IAFF), the terms of the remaining four bargaining agreements have not been
finalized. Therefore, these second quarter projections do not include the projected FY 2018/19
impacts of the four collective bargaining agreements that are yet to be ratified between the City
and the Fraternal Order of Police (FOP), Communications Workers of America (CWA),
Government Supervisors Association of Florida (GSAF), and American Federation of State,
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 3 of14
County and Municipal Employees (AFSCME). Subsequent projections will be refined
accordingly as additional information becomes available.
In addition, as a result of the 2019 Estimated Taxable Values provided by the Miami-Dade
County Property Appraiser's Office and preparation for fiscal year-end, the Administration has
enacted a hiring freeze, as well as a freeze on City-funded travel and non-essential and non-
construction expenditures, which is anticipated to result in additional one-time savings realized
at fiscal year-end. Forthcoming projections will be further refined to reflect the year-end savings
realized from this citywide freeze.
GENERAL FUND
Year-end operating revenues and expenditures projected through September 30, 2019 provide
an estimate of any year-end surpluses or shortfalls as of this point in time. Further, while actual
revenues and expenses presented are as of March 31, 2019, these projections have
incorporated more recent information available.
General Fund First Quarter Status
An analysis of the actual six-month operating revenues and expenses for the period October 1,
2018 through March 31, 2019 reveals an operating budget surplus of $84.9 million. While the
actual surplus as of March 31, 2019 may seem unusual when compared to the projection for the
current fiscal year ending September 30, 2019, it should be noted that the City receives a larger
percentage of its ad valorem property taxes during the earlier months of the fiscal year. Ad
valorem property tax revenues represent approximately 52.8% of total budgeted revenues
adopted in FY 2018/19 and 66.2% of actual revenues collected during the combined first and
second quarter of the fiscal year.
As of March 31, 2019, total revenues collected were approximately 67.3% of the current FY
2018/19 amended budget, or $237.4 million. Conversely, expenditures were approximately
43.2% of the current FY 2018/19 amended budget, or $152.5 million. It is, however, important to
note that there are often delays in expenditures until the close-out of the fiscal year.
FY 2018/19 Budget
1/2 of Amended Actuals as of Variance from 1/2
General Fund Adopted Budget Amended Budget Budget 03/31/19 Amended Budget
0\er I (Under)
Re\enues $ 345,645,000 $ 352,757,000 $ 176,378,500 $ 237,420,459 $ 61,041,959
Expenditures $ 345,645,000 $ 352,757,000 $ 176,378,500 $ 152,487,736 $ (23,890,764)
Excess of Revenues Over/(Under) Expenditures $ 84,932,723
General Fund Year-End Projections
A summary of the preliminary General Fund revenues and expenditures as of March 31, 2019
with projections through September 30, 2019 reflects a year-end surplus of $3.3 million, or
0.9%, which is an increase over the $1.6 million surplus projected as of the first quarter of the
fiscal year. It should be noted that this analysis is a preliminary projection based on experience
over the course of the first six months of the fiscal year, which is not a definitive indication of the
experience for the remainder of the current fiscal year, but does provide a first glance in
identifying any potential concerns.
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 4 of 14
FY 2018/19 Budget
General Fund Adopted Budget Amended Budget Projected
Re..enues $ 345,645,000 $ 352,757,000 $ 351,280,000
Expenditures $ 345,645,000 $ 352,757,000 $ 347,932,000
Excess of Revenues Over/(Under) Expenditures $ 3,348,000
General Fund Operating Revenues
Difference % O..er I (Under)
$ (1 ,477,000) -0.4%
$ (4,825,000) -1.4%
0.9%
Property tax collections for FY 2018/19 are being projected at approximately 95.0% of total
property taxes assessed, which is consistent with the original adopted budget allowing for
discounts, as well as a level of adjustment for appeals consistent with historical levels. The
realized impact of these appeals and adjustments for the FY 2018/19 budget will be provided by
the Miami-Dade County Property Appraiser in July 2019 when the City's certified property
values are received.
As of March 31, 2019, actual revenues collected were approximately 67.3% of the current FY
2018/19 amended budget, or $237.4 million. As of March 31, 2019, revenues through fiscal
year-end September 30, 2019 are projected to be approximately $351.3 million, which is 0.4%,
or $1.5 million, below the current FY 2018/19 amended budget.
As in prior years, significant variances to budget in excess of 10%, or $300,000, by revenue
category are explained below:
Other Taxes -This category includes franchise and utility taxes on electricity, gas, fuel,
cable-television and telephones. Collections are projected to be 5.8%, or $1.5 million,
below the current amended budget due to usage rates, particularly those for electricity,
trending lower than budget.
Licenses and Permits -This category includes business tax receipts, licenses/
building/special use permits, and sidewalk cafe fee revenues and is projected to be below
the current amended budget by 1. 7%, or $554,000, primarily due a decrease in building
permit revenues of $2.3 million resulting mainly from diminishing job size valuations, as well
as the recently implemented provider discounts and decline in the number of building
permits issued that all directly impact permit revenues. This decrease is, however,
projected to be partially offset by increased revenues collected from business tax receipts,
right-of way permits, and fire inspections, as well as planning and fire plans review activities
of approximately $1.8 million based on year-to-date collections trending higher than budget.
Rents and Leases -This category includes revenues from various rentals and leases
realized from City owned properties. Projected FY 2018/19 collections are 5.4%, or
$320,000, above the current amended budget primarily due to revenues from the City's
leases with the Miami Beach Marina and Penrod's (Nikki Beach) trending higher than
budget by approximately $209,000 and $96,000, respectively. The revenues received by
the City from these leases are based on a percentage of gross sales among other things.
Miscellaneous -This category includes revenue from various categories such as
concessions, reimbursements, and miscellaneous revenue categories like beach access
fees, advertising, and sale of city property. Projected FY 2018/19 collections are 4. 7%, or
$679,000, above the current amended budget primarily due to the City receiving a one-time
refund from Florida Power and Light (FPL) in the amount of approximately $431,000. As
further detailed in the Letter-to-Commission dated May 10, 2019 (LTC 284-2019), the
Letter to Commission (LTC) -FY 2018/19 Second Quarter Analysis
Page 5 of 14
Public Works Department in coordination with FPL conducted a high-level assessment of
the City's account with FPL, which resulted in the determination that a detailed audit of the
City's streetlights was merited. After completing the requested audit earlier this year, which
covered a span of seven years, the utilities provider revealed that it had over-billed the City
during numerous years for streetlights that were not in service resulting in the refund for the
amount received. FY 2018/19 miscellaneous General Fund revenues are also projected to
exceed budget due to beachfront concession revenues and other miscellaneous revenues
trending higher than budget.
For a detail of General Fund revenues by category, refer to the attached Schedule A.
General Fund Operating Expenditures
As of March 31, 2019, actual General Fund expenses were approximately $152.5 million, or
43.2%, of the current FY 2018/19 amended budget. As of March 31, 2019, expenditures through
fiscal year-end September 30, 2019 are projected to be $347.9 million, which is approximately
$4.8 million, or 1.4%, below the current FY 2018/19 amended budget. These projections are
based on an analysis of the first six months of the fiscal year, and also incorporate any
additional information available. As previously mentioned, it is important to note that these
projections do not include the projected FY 2018/19 impacts of the four collective bargaining
agreements yet to be ratified, which predominately impact operational departments including,
but not limited to: Building, Code Compliance, Parks and Recreation, Public Works, and Police.
A comparison of actual expenses and projected expenditures to budget, by department, as of
March 31, 2019, is provided in the attached Schedule A. As in prior years, departments
projected to exceed budget, or with significant variances to budget in excess of 10%, or
$300,000, are explained below:
Building -The department is projected to be 10.1 %, or· $1.5 million, below the current
amended budget due to a slowdown in the number of building permits being issued. As a
result of this, savings of $794,000 are projected in operating expenditures driven primarily
by a decline in the need for outside inspection and engineering services of $744,000 plus
projected savings in other miscellaneous operating expenditures related to the department's
operations of $50,000. The department is also projected to have savings of $750,000 in
personnel services costs due to numerous vacancies, as well as a reorganization of
positions to better align the current staffing needs of the department with current operational
needs.
Building
FY 2018/19 FY 2018/19 Projected '13
Amended Budget Projected Amended % 0\€r I (Under)
Budget Variance
Expenditures $ 15,250,000 $ 13,706,000 $ (1 ,544,000) -10.1%
Communications-The department is projected to be 1.5%, or $38,000, above the current
amended budget, primarily due to staffing changes within the department as part of the
department's ongoing effort to meet the City's demands for enhanced and diversified
marketing, advertising, and media promotions. We will continue to monitor the department's
expenditures over the remainder of the year and, if necessary, amend the department's
budget through the realignment of existing funds if these additional expenditures are
realized at year-end.
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 6 of 14
Communications
FY 2018119 FY 2018119
Amended Budget Projected
Expenditures $ 2,589,000 $ 2,627,000
Projected -,s
Amended % O\€r I (Under)
Budget Variance
$ 38,000 1.5%
Police -The department is projected to be 1.1 %, or $1.2 million, above the current
amended budget due to increased usage of sworn Police overtime. The department
currently has several sworn personnel vacancies that it is currently in the process of filling,
which is a long and thorough process. As a result, while these vacancies are in the process
of being filled, the department has relied on increased usage of unbudgeted overtime of
$1.1 million to maintain required minimum patrol staffing and police visibility citywide. In
addition, changes in the deployment of resources during the extended Spring Break period
this year, un-reimbursable overtime related to the Florida Department of Transportation
(FOOT) MacArthur Causeway project, and deployment of personnel related to Hurricane
Michael have required the department to incur additional overtime costs of approximately
$606,000, $150,000, and $242,000, respectively. This projected overage in overtime of
approximately $2.1 million is anticipated to be partially offset by projected savings in
budgeted health and life insurance for active employees and retirees of approximately $1.0
million. We will continue to monitor the department's expenditures over the course of the
remainder of the year and amend the department's budget at year-end, if necessary,
through the realignment of existing funds.
Police
FY 2018119 FY 2018119 Projected'~->
Amended Budget Projected Amended % O\€r I (Under)
Budget Variance
Expenditures $ 112,708,000 $ 113,919,000 $ 1,211,000 1.1%
Public Works -The department is projected to be below the current amended budget by
2.2%, or $337,000, resulting from savings in personnel services expenditures due to
numerous vacancies within the department, which includes Engineering, Streets, and
Greenspace Management.
Public Works
FY 2018119 FY 2018119 Projected -,s
Amended Budget Projected Amended % 0\€r I (Under)
Budget Variance
Expenditures $ 15,349,000 $ 15,012,000 $ (337,000) -2.2%
Citywide Accounts (Net of Transfers) -The Citywide Accounts, net of transfers, are
projected to be below the current amended budget by 9.5%, or $1.8 million, primarily due to
savings realized in debt service originally budgeted in the amount of $1.2 million for
replacement of the City's public safety radio system that was approved for funding from the
voter-approved G.O. Bond Program instead. In addition, expenditures for accumulated
leave settlements and other miscellaneous expenditures are projected to be below budget
at year-end by approximately $569,000 based on current year trends. Should these
projected savings be realized at year-end, the savings can be realigned within the General
Fund to address any department overages realized at year-end.
Citywide Accounts
FY 2018119 FY 2018119 Projected -,s
Amended Budget Projected Amended % 0\€r I (Under)
Budget Variance
Expenditures $ 18,589,000 $ 16,823,000 $ (1,766,000) -9.5%
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 7 of 14
ENTERPRISE FUNDS
The City accounts for those goods and services provided by a particular department to external
users for which a fee is charged as Enterprise Funds. The City's Sanitation, Sewer, Storm
Water, Water, Parking, and Convention Center operations comprise this category of Proprietary
Funds.
An analysis of the actual six-month operating expenses for the period October 1, 2018 through
March 31, 2019, reveals that all Enterprise Funds have expenses less than one-half of their
current FY 2018/19 amended budgets. As previously mentioned, this is not representative of
typical trends for a full fiscal year, as there is often a lag in processing of expenditures,
particularly those billed by outside entities for services provided.
ENTERPRISE FUNDS
---
Sanitation Sewtr Storm Water Water Parldng Convention
Center
FY 201&119 ~ed Budget 22,392,000 50,679,000 29,390,000 34,555,000 53,609,000 19,374,000
Budget Amendment ·11/14/18 155,000 1,643,000 384,000 1,635,000 456,000 321 ,000
BudqetAmendment-04/10/19 0 0 0 0 0 0
FY 2018/19 Amended Budget 22 ,547000 52,322,000 29,774,000 36,190,000 54,065,000 19,695000
1/2 Adopted Budget 11,196,000 25,339,500 14,695,000 17,277,500 26,804,500 9,687,000
1/2 Amended Budqet 11 273500 26161 000 14,887000 18095000 27 032 500 9 847 500
Revenues as of 03/31/19 9,150 72 1 24 971,030 14,629,201 17,019,328 24,796,364 1,867,064
Expenditures as ofO:l/31/19 9 427 042 20 144 981 11197,439 13 217,127 19,389 659 2820046
Expenditures Abovei(Below) 1/2 Amended Budget ( 1 ,846,458) (6,016,019) (3,689,561) ( 4,877,873) (7,642,841) (7,027,454)
%Variance -8 .2% -11.5% -1 2.4% -13.5% -14.1 % -35.7%
Year-end operating revenue and expenditure projections through September 30, 2019 provide a
more realistic indication of any anticipated year-end surpluses or shortfalls as of this point in
time . In addition, while the actual revenues and expenses · presented above are as of March 31,
2019, the year-end projections incorporate more recent information available. The following
projections do not include the projected FY 2018/19 impacts of the four pending collective
bargaining agreements yet to be ratified which predominately impact all Enterprise Funds
except for Convention Center operations.
As reflected below, revenues for all Enterprise Funds are projected to be equivalent to or in
excess of expenditures as of year-end. It is, however, important to note that as part of the FY
2018/19 operating budget, the City's policy of "not utilizing one-time, non-recurring revenue to
subsidize recurring personnel, operating, and maintenance costs" was waived for the Sanitation
Department, as set forth by Resolution 2018-30512, appropriating $2.8 million of prior year fund
balance from the Sanitation Fund for recurring expenditures in FY 2018/19. Of the $2 .8 million
necessary to be appropriated from prior year fund balance in the Sanitation Fund, $1.9 million
was attributed to the limitation in the Resort Tax Fund's capacity to fund the full $3.7 million to
be transferred to the Sanitation Fund for services provided in the City's tourism-related areas.
The projections below for the Sanitation Fund include the use of approximately $1.6 million of
prior year fund balance from the Sanitation Fund to fund recurring costs projected in FY
2018/19.
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 8 of14
ENTERPRISE FUNDS
Sanitatioo Sewer Storm Water Water Parking Conventioo
Center
FY 2018/19 Adopted Budget 22,392,000 50,679,000 29,390,000 34,555,000 53,609,000 19,374,000
Budget Amendment· 11/14/18 155,000 1,643,000 364,000 1,635,000 456,000 321,000
Budget Amendment· 04/10/19 0 0 0 0 0 0
FY2018/19 Amended Budget 22,547,000 52,322,000 29,774,000 36,190,000 54,065,000 19,695,000
FY 2018/19 Projections
Charges for Services 21,664,000 50,953,000 30,675,000 35,730,000 47,370,000 7,311,000
Other 190,000 1 369 000 (240,000) 481 000 4597000 11 374000
FY201 8/19 ReYellUe Projections 21,874 ODD 52 322 000 30,435 000 36,211 ODD 51 967 000 18,685,000
$ Overi(U nder).Arne nded Budget (673,000) 0 661,000 21,000 (2,098,000) (1,810,000
% Over/( Under) Amended Budget ·3.0% 0.0% 2.2% 0.1% -3 .9% -5.1%
FY 2018119 Excenditure Proiections 21,874 000 52 322 000 29,774000 36 190 000 51967000 18 685,000
$ Ove11!Under) Amended Budget (673.000) 0 0 0 (2,098,000) (1,010,000)
%Over/( Under) Amended Budget -3.0% 0.0% 0.0% 0.0% ·3.9% -5.1%
Excess of Revenues Over/ Under Exoenditures 0 0 661,000 21,000 0 0
Departments projected to exceed budget, or with significant variances to budget in excess of
$300,000, or 10 percent, are explained below:
Sanitation -Expenditures in this fund are projected to be 3.0%, or $673,000, below the
current amended budget, primarily due to projected savings in personnel costs of $887,000
resulting from several vacant positions that the department has been unable to fill or is in
the process of filling. These projected personnel costs savings are, however, anticipated to
be partially offset by the need for additional temporary labor of $231,000 that the
department anticipates will be necessary to supplement permanent department staffing
shortages resulting from the vacancies currently in the department.
Parking -Expenditures in this fund are projected to be 3.9%, or $2.1 million, below the
current amended budget, primarily due to a decrease in the amount available to be set-
aside for. capital -renewal and replacement of existing Parking . Department assets .in . the
amount of approximately $1.8 million. This decrease is directly attributed to the ongoing
diminished demand and usage of on-street and off-street parking adversely impacted by
private on-demand ride booking services. Additional savings of approximately $281,000 are
also projected based on savings in personnel services expenditures resulting from current
position vacancies that the department has been unable to fill or is in the process of filling.
Convention Center -Expenditures in this fund are projected to be 5.1 %, or $1.0 million,
below the current amended budget, primarily due to the loss of various shows and events,
including the Home Show, South Florida Boat Show, and Condo and HOA Expo, as
reported by Spectra, the company currently contracted by the City for management of the
Miami Beach Convention Center. The projected reduction in F'Y 2018/19 expenditures
resulting from the loss of these shows, combined with the projected $4.7 million Convention
Development Tax (COT) bonus to be received from Miami-Dade County for FY 2018/19, is
projected to provide an additional $229,000 to be set-aside for future renewal and
replacement of existing capital assets of the newly renovated Miami Beach Convention
Center.
INTERNAL SERVICE FUNDS
The City accounts for goods and services provided by one department to other departments
citywide on a cost reimbursement basis as Internal Service Funds. Central Services, Fleet
Management, Information Technology, Property Management, Risk Management (Self
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 9 of14
Insurance), and Medical and Dental comprise this category of Proprietary Funds.
An analysis of the actual six-month operating revenues and expenses for the period October 1,
2018 through March 31, 2019, reveals that all Internal Service Funds have expenses less than
one-half of their current FY 2018/19 amended budgets primarily due to expenditures typically
incurred later in the fiscal year.
INTERNAL SERVICE FUNDS ----------
Central Services Fleet Information Property Risk Management Me~ical & Dllll!ll
Management Technology Management nsurance
FY 2018119 Adopted Budget 1,101,000 11,492,000 16,614,000 9,733,000 19,460,000 37,938,000
Budget Amendment-11/14/18 12,000 40,000 110,000 316,000 1,166,000 0
Budaet Amendment-04/10/19 0 0 0 0 0 0
FY2018/19Amended Budaet 1113000 11,532,000 16,724 000 10 049 000 20 626,000 37 938000
1/2 Adopted Budget 550,500 5,746,000 8,307,000 4,866,500 9,730,000 18,969,000
1/2 Amended Budaet 556,500 5,766 000 8,362 000 5,024,500 10,313,000 18 969 000
Revenues as of03/31/19 539,304 5 505 983 7 965,298 4,829,067 9 681,808 17 991 544
Expenditures as of03/31/19 500,015 4,370 190 6,376,227 3,271,022 5,343 430 14 714,900
Expenditures Above/(Below) 1/2 Amended Budget (56,485) (1,395,810) (1,985,m) (1,753,478) (4,969,570) (4,254,100)
%Variance -5.1% -12.1% -11.9% -17.4% -24.1% -11.2%
Year-end operating revenue and expenditure projections through September 30, 2019 provide a
more realistic indication of any anticipated year-end surpluses or shortfalls as of this point in
time. Further, while the actual revenues and expenses presented above are as of March 31,
2019, the year-end projections incorporate additional information available. The following
projections do not include the projected FY 2018/19 impacts of the four collective bargaining
agreements yet to be ratified which predominately impact Central Services, Fleet Management,
and Property Management. Since Internal Service Funds function on a cost reimbursement
basis, should any Internal Service Fund Department exceed its amended budget at year-end,
the overage will be charged back to all applicable departments of which a large proportion
wouid impact the General Fund.
As reflected below, revenues for all Internal Service Funds are projected to be equivalent to
expenditures as of year-end.
INTERNAL SERVICE FUNDS
Central Services Fleet lnfonmtion Property Risk M nwnt Medical &Otldal
Management Technology Management anage ,,....,ce
FY 201 &119 Adopted Budget 1,101,000 11,492,000 16,614,000 9,733,000 19,460,000 37,938,000
Budget Amendment -11/14/18 12,000 40,000 110,000 316,000 1,166,000 0
Budget Amendment-04110/19 0 0 0 0 0 0
FY 2018/19 Amended Budget 1,113,000 11,532,000 16,724,000 10,049,000 20,626,000 37,938,000
FY 2018/19 Projections
Charges for Services 1,091,000 11,110,000 15,862,000 9,657,000 18,540,000 0
Other 22,000 377,000 702,000 192,000 2086000 35 542000
FY 2018/19 Revenue Projections 1,113000 11,487,000 16,564000 9,849,000 20,626000 35 542000
$ Over/(Under) Amended Budget 0 (45,000) (160,000) (200,000) 0 (2,39&,000
% Over/(Under) Amended Budget 0.0% -{).4% -1.0% -2.0% 0.0% -6.3%
FY2018/19 Expenditure Projections 1,113,000 11,487,000 16,564,000 9,849,000 20,626,000 35,542 000
$ Overi(U nder) Amended Budget 0 (45,000) (160,000) (200,000) 0 (2,396,000)
%Over~ Under) Amended Budget 0.0% -{).4% -1.0% -2.0% 0.0% -6.3%
Excess of Revenues Over/(U.Ilder) Expenditures 0 0 0 0 0 0
Departments projected to exceed budget, or with significant variances to budget in excess of
$300,000, or 10 percent, are explained below:
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 10 of 14
Medical and Dental -Expenditures are projected to be 6.3%, or $2.4 million, below the
current amended budget due to medical claims trending lower than budgeted in FY 2018/19
based on current claims experience and adjusted actuarial forecasts as of the end of the
second quarter of FY 2018/19. It is important to note that despite the better-than-anticipated
claims experience realized during the first six months of the year, claims can fluctuate
significantly throughout the year; therefore, we will continue to monitor trends over the
coming months and future projections will be adjusted accordingly.
SPECIAL REVENUE FUNDS
Special Revenue Funds consist of revenues and expenditures which are legally restricted or
committed for specific purposes other than debt service and/or capital projects. Special
Revenue Funds include Resort Tax, as well as 7th Street Garage Operations, 5th & Alton Garage
Operations, the Tourism and Hospitality Scholarship Program, Tree Preservation and
Commemorative Tree Trust Program, Waste Hauler and Sustainability Contributions, Education
Compact Fund, Red Light Camera Program, Emergency 911 Fund, Residential Housing
Program, Information and Communications Technology Fund, People's Transportation Plan
{PTP) Fund, Miami Beach Cultural Arts Council, Police Unclaimed Property and Crash Report
Sales Funds, Police Confiscation Trust Funds (Federal and State), Police Training and School
Resources Fund, and the Adopt-a-Bench Program.
An analysis of the actual six-month operating revenues and expenses for the period October 1,
2018 through March 31, 2019, reveals that all Special Revenue Funds, except the 5th & Alton
Garage, Waste Haulers, and Police Training Fund have expenses less than one-half of their
current FY 2018/19 amended budgets due primarily to expenditures that are typically incurred in
the latter part of the fiscal year. The 5th & Alton Garage, Waste Haulers, and Police Training
Funds have expenses that are more than one-half of their current FY 2018/19 amended
budgets due to one-time expenses for equipment, training, insurance, etc. incurred during the
first half of the fiscal year. It is important to note that while the actuals incurred for these
particular funds through March 31, 2019 are in excess of one-half of their respective FY 2018/19
amended budgets, this is not normally representative of the typical trend for a full fiscal year.
Departments projected to exceed budget, or with significant variances to budget in excess of
$300,000, or 10 percent, are explained below:
Red-Light Camera -This fund is projected to be 40.0%, or $526,000, below the current
amended budget due to delays in the installation of an additional five red light cameras
originally anticipated to be installed and fully operational by January 2019, as well as
revenues generated from the existing red-light cameras trending lower than budgeted, which
includes one existing camera that is offline due to the Convention Center renovation project.
Overall, expenditures are projected to exceed revenues by $25,000; therefore, any shortfall
realized at year-end will be offset by the use of prior year fund balance from the Red Light
Camera Fund.
Red Light Camera
FY 2018/19 FY 2018/19 Projected IB
Amended Budget Projected Amended % O~.er I (Under)
Budget Variance
Expenditures $ 1,316,000 $ 790,000 $ (526,000) -40.0%
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 11 of 14
Commemorative Tree Trust Fund -This fund is projected to be 50.0%, or $5,000, below
the current amended budget due to a significant decline in the anticipated number of
contributions and donations to be received for the Commemorative Tree Program. The
Commemorative Tree Program was established in 2016 and provides residents and visitors
with a unique way of commemorating a special event, memory, or loved one that will
contribute to the enhancement of the City's urban forest. As a result of the decline in
contributions and donations, projected year-end expenditures have been adjusted
accordingly since expenditures are directly correlated with the donations and contributions
received.
Commemorative Tree Trust
FY 2018119 FY 2018119 Projected vs
Amended Budget Projected Amended % O~.er I (Under)
Budget Variance
Expenditures $ 10,000 $ 5,000 $ (5,000) -50.0%
Adopt-A-Bench Program -This fund is projected to be 100.0%, or $60,000, below the
current amended budget due to a significant decline in the number of anticipated
contributions to be received for the Adopt-A-Bench Program. This program was established
to provide individuals and/or entities with the opportunity to commemorate or honor family,
friends, or special events by adopting a new or existing bench in a City park. As a result of
the anticipated decline in contributions, projected year-end expenditures have been adjusted
accordingly since expenditures are associated with contributions received.
Adopt-A-Bench
FY 2018119 FY 2018119 Projected vs
Amended Budget Projected Amended % O~.er I (Under)
Budget Variance
Expenditures $ 60,000 $ 0 $ (60,000) -100.0%
E-911 -While the Fire Department's E-911 projections through September 3'0, 2019 do not
meet the previously mentioned criteria requiring an explanation, it is important to note that
the department's expenditures are based on revenues realized at year-end from fees
collected by voice communications service providers (wireless, wireless prepaid, and non-
wireless) that are remitted to the State of Florida and distributed to eligible counties and
municipalities throughout the State of Florida. As of the second quarter of FY 2018/19,
revenues are projected to be in excess of expenditures as of year-end by $383,000 primarily
due to revenues trending higher than budget. Should these additional projected revenues be
realized at year-end, allowable expenditures incurred in the Department's General Fund will
be charged-back to the E-911 fund.
RESORT TAX FUND
The City's Resort Tax Fund is primarily supported by taxes collected pursuant to Chapter 67-
930 (Section 6) of the Laws of Florida, as amended, and Section 5.03 of the City of Miami
Beach Charter, as amended. This legislation authorizes the use of Resort Taxes for the
promotion of the tourism industry, which includes, but is not restricted to the following: publicity,
advertising, news bureau, promotional events, convention bureau activities, capital
improvements and the maintenance of all physical assets in connection therewith; and for the
payment of the reasonable and necessary expenses of collecting, handling, and processing of
said tax.
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 12 of 14
Typically, the City has considered the following services as "Services Related to the Promotion
of Tourism":
• Police Officers serving entertainment areas
• A portion of Fire Rescue services from Fire Stations 1 and 2
• Ocean Rescue services
• Sidewalk pressure cleaning in South, Middle, and North Beach visitor areas
• South Beach sanitation services
• Enhanced Code Compliance/Enforcement provided to respond to evening entertainment
area violations and staffing of special events
• Other Code Compliance/Enforcement activities in tourism and visitor related
facilities/areas
• Tourism and Cultural Development Department operations and the Cultural Arts Council
• Museums and Theatres (Garden Center, Bass Museum, Colony, and Byron Carlyle
Theatres)
• Golf courses (net of revenues)
• Memorial Day and other high impact period costs
• Homeless services
• July 41h, Visitor Center funding, Holiday Lighting, Festival of the Arts, Jewish Museum,
MDPL, Orange Bowl, Monuments, etc.
These allowable uses have led to increased tourism-related activities, such as special events
including Art Basel, the Air and Sea Show, and various concerts.
Two percent Resort Tax collections as of year-end are projected to be 0.5%, or $298,000,
above the current FY 2018/19 amended budget, which was originally adopted assuming a
conservative 1.0% increase over projected FY 2017/18 collections.
Total two percent Resort Tax expenditures as of year-end are projected to be $15,000, above
the current FY 2018/19 amended budget resulting from an increase in the projected contribution
to the Miami Beach Visitor and Convention Authority (VCA), which is based on a percentage of
total two percent collections.
The proceeds of the one percent bed tax commencing FY 2018/19, as adopted by the City
Commission through Resolution 2018-30512, are to be utilized as follows: 60% allocated for
Transportation initiatives in tourist-related areas; 10% allocated equally among North Beach,
Middle Beach and South Beach for capital projects that enhance Miami Beach's tourist related
areas; and 10% allocated to various arts and cultural programs.
One percent Resort Tax operating revenues as of year-end are projected to be 0.1 %, or
$17,000, above the current FY 2018/19 amended budget. Simultaneously, since transfers for
Transportation initiatives in tourism-related areas, North, Middle, and South Beach Quality of
Life (QOL) projects, and various arts and cultural programs are directly based on the proceeds
of the one percent tax collected, one percent Resort Tax expenditures as of year-end are
equally projected to be 0.1 %, or $17,000, above the current amended budget.
Lastly, the proceeds of the additional one percent bed tax levied solely for the purposes of
expanding, enlarging, renovating, and/or improving the Miami Beach Convention Center,
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 13 of 14
including debt service related thereto, as well as providing Capital Renewal and Replacement
funding for the Miami Beach Convention Center, is projected to be 0.1%, or $17,000, above the
current FY 2018/19 amended budget as of year-end. Since the proceeds of the additional one
percent bed tax must first provide for the payment of debt service and any excess, based on
proceeds collected, be set-aside for Capital Renewal and Replacement funding for the newly
renovated Miami Beach Convention Center, additional one percent bed tax expenditures as of
year-end are also projected to be 0.1 %, or $17,000, above the current amended budget.
Overall, combined 2%, 1% bed tax, and 1% Convention Center Resort Tax revenues as of year-
end are projected to be 0.1 %, or $49,000, above the current FY 2018/19 amended budget,
while expenditures are at the same time projected to be 0.1 %, or $49,000, above the current
amended budget as of year-end as well. As additional economic data and tourism information
becomes available these projections will continue to be refined.
CONCLUSION
FY 2018/19
Adopted
Budget
2nd
1stAmand"''"'i Amandmmt
11/14118 0411QI19
Amanded
FY 2018119
Budget
........... .,
OY31MII
This analysis of budget to actual operating revenues and expenses as of March 31, 2019, with
projections through September 30, 2019, provides the status of the current FY 2018/19
amended budget for the first six months of the fiscal year. While the first six months of the fiscal
year does not provide a definitive indication of experience for the remainder of the fiscal year, it
does provide further clarity in proactively identifying any potential issues.
Based on preliminary projections as of March 31, 2019, the General Fund is anticipated to have
a year-end surplus totaling $3.3 million, which is an increase over the $1.6 million surplus
projected as of the first quarter of this fiscal year. All funds will continue to be monitored over the
coming months and projections will be further refined as the fiscal year progresses and
additional data and information becomes available.
JLM~/f
Letter to Commission (LTC)-FY 2018/19 Second Quarter Analysis
Page 14 of 14
CITY OF M IAMI BEACH
FY 2018/19 GENERAL FUND
2ND QUARTER
Improvement Projecls
Altomey
CityCier1<
City IVanager
Code Compliance
Communications
Emergency IVanagement
Environment & Sustalnabllity
Finance
Fire
Housing & Comm Services
Human Resources/Labor Relations
IVayor and Com m lsslon
Internal Aud~
of Budget ·& Performance lmprov
of i1spector General
Development & Perf lnltlallves
Parl<s and Recreation
SCHEDULE A
FY201B/19
Adopted
Budget
179,020,000
2,400,000
748,000
165,000
25,262,000
31,394,000
12,115,000
12,503,000
1,860,000
3,617,000
5,899,000
14,176,000
35,836,000
19,577,000
1,073,000
5,227,000
5,818,000
1,755,000
4,129,000
6,215,000
2,339,000
1,513,000
1,462,000
6,714,000
87,551,000
3,824,000
3,003,000
2,416,000
832,000
1,875,000
484,000
893,000
38,680,000
4,666,000
112,094,000
2,550,000
15,176,000
5,373,000
12,292,000
253,000
300,000
2,400,000
FY201B/19
Amended
Budget
179,020,000
2,400,000
748,000
165,000
25,282,000
31,769,000
12,115,000
12,503,000
1,860,000
3,617,000
5,899,000
14,351,000
35,836,000
19,577,000
1,073,000
5,227,000
6,124,000
1,765,000
4,304,000
6,353,000
2,589,000
0
1,492,000
6,933,000
89,825,000
3,700,000
3,105,000
2,416,000
1,100,000
1,880,000
484,000
1,059,000
39,076,000
5,513,000
112,708,000
2,743,000
15,349,000
5,373,000
14,159,000
253,000
300,000
3,129,000
Actuals as of
03/31/19
153,749,336
2,400,000
748,000
165,000
9,371,549
18,535,518
5,042,580
6,626,589
812,028
3,826,504
3,978,025
4,446,483
17,918,000
9,600,846
0
2,220,321
2,571,487
766,950
1,966,761
2,584,212
1,061,778
0
499,918
2,960,691
41,699,000
1,355,519
1,241,615
1,059,063
267,667
850,350
0
350,838
2,246,359
52,720,035
1,151,474
5,803,216
2,108,257
3,840,126
0
0
0
%Actual of OVer/(Under)
-nded -nded Amended
Budget Budget Budget