20120927 FY 12-13 Proposed Millage and Operating BudgetMIAMIBEACH
FY 2012/13 Proposed Millage
and Operating Budget
September 27, 2012
2
FY 2012/13 Budget Development
Setting Tentative Millage Rates:
General Fund 5.9826
Renewal & Replacement .1083
Operating Millage Rate 6.0909
GO .2568
Total With Debt 6.3477
State Defined Rollback Rate 5.6184
(reduction of .0746 mills
from FY 2011/12)
(reduction of .1026 mills
from FY 2011/12)
3
FY 2012/13 Tentatively Adopted
Millage Rate
•FY 2010/11 rate increase of 0.56 mills to help offset $32M Deficit
•From 5.6555 to 6.2155
•Proposed Goal: Bring millage rate back to 5.6555 as property values
rise
•2012 property values have not reached FY 2009/10 levels
•Adjustments and appeals through 2011 (the latest year
available), have not seen actual increased values
•Millage reduction in FY 2011/12 and the reduction proposed
for FY 2012/13 represent 22% of that goal
4
FY 2012/13 Tentatively Adopted
Millage Rate
Final/
Revised
Taxable
Value
(billions)
General
Fund/RDA
Operating
Millage
Change In
General
Fund/RDA
Operating
Millage
from FY
2006/07
FY2006/07 22.74 22.26$ 7.3740
FY2007/08 26.85 26.14$ 5.6555 (1.7185)
FY2008/09 26.90 25.89$ 5.6555 (1.7185)
FY2009/10 24.70 23.24$ 5.6555 (1.7185)
FY2010/11 22.10 20.97$ 6.2155 (1.1585)
FY2011/12 21.98 20.76$ 6.1655 (1.2085)
FY2012/13 23.10 6.0909 (1.2831)
Budget Year
Taxable
Property
Values
(billions)
Millage Rates
Operating millage rates remain almost 1.3 mills lower than FY 2006/07.
5
FY 2012/13 Proposed Millage Rate
Total Millage 17% lower than FY 2006/07 when values
were similar
FY 06/07 FY 11/12 FY 12/13 Inc/(Dec)
From
FY11/12
From FY
06/07
Operating 7.1920 6.0572 5.9826 -0.0746
Capital Renewal & Replacement 0.1820 0.1083 0.1083 0.0000
Sub-total Operating Millage 7.3740 6.1655 6.0909 -0.0746 -1.2%-17%
Debt Service 0.2990 0.2884 0.2568 -0.0316
Total 7.6730 6.4539 6.3477 -0.1062 -1.6%-17%
City of Miami Beach Millage Rates
% Inc/(Dec)
6
FY 2012/13 Budget Development
Process began early and is ongoing
•June Committee of the Whole
•Finance & Citywide Projects Committee Meetings
•July 9, 2012
•July 25, 2012
•August 22, 2012
•Commission Budget Hearings
•September 12, 2012 – First Public Hearing
•September 27, 2012 – Second Public Hearing
7
FY 2012/13 Budget Development
Increase in certified values:
•5.0 percent Citywide and 4 .9 percent outside the City Center
Redevelopment Area – as compared to .6% decline Citywide last year
Jan. 1 2012
Value (in billions)
As of July 1 2011
(For FY 2011/12
Budget)
As of July 1 2012
(For FY 2012/13
Budget)
$
(in billions)%
RDA – City Ctr $ 3.4234 $ 3.6087 $ 0.1853 5.4%
South Pointe 3.4460 3.6181 $ 0.1721 5.0%
Other 15.1089 15.8455 $ 0.7366 4.9%
Total Citywide $ 21.9783 $ 23.0723 $ 1.0940 5.0%
Citywide Net
of City Ctr $ 18.555 $ 19.464 $ 0.9087 4.9%
Change from 2011
Value (Budget)
Jan. 1 2011
Value (in billions)
8
FY 2012/13 Budget Development
Changes made at 1st Public Hearing:
•Operating budget millage was decreased from 6.1122 to 6.0909 -- $400,000
reduction in property tax revenue to the General fund
•Employee givebacks of $3 million in the General Fund tentatively approved to
partially offset $7.3 million in increased health and pension costs, allocated
across all General Fund departments
•The millage reduction from 6.1122 to 6.0909 resulted in a reduction in the
transfer to the Redevelopment Agency from $17,385,000 to $17,318,000
•Building Development Process fees changes - $295,000 revenue reduction in
the General Fund
9
FY 2012/13 Balancing the General
Fund Operating Budget
$2.9 million CSL gap fully addressed through employee givebacks
of $3.0 million
Additions and service enhancements, revenue decreases from
building development process fees, additional decrease in
millage, and Set Aside for FY 2013/14 offset by:
•Approximately $1 million in efficiencies
•$4 million additional resort tax transfer for tourism eligible
expenditures,
•$0.3 in Revenue Enhancements
Note: $0.8 million Set Aside for FY 2013/14 – Equivalent to 0.0443
mills – $5/$13 for median/average homesteaded properties
10
FY 2012/13 General Fund
Operating Budget
Total budget $256,280,000 – increase of $11.9 million (4.9 percent)
•Personnel cost increases prior to enhancements and net of
anticipated employee givebacks and efficiencies - $5.9 million
•Building Department enhancements (increased demand offset by
increased revenue) - $0.7 million
•Other service enhancements (return to tax payers for increased
value) - $2.85 million
•Increased internal services charge backs (similar personnel
increases, Police liability claims, and increases in debt service for
replacement vehicles and equipment) - $3.3 million
•Set Aside for FY 2013/14 -$0.8 million
These increases are offset by $1.9 million in other operating and capital
CSL savings/efficiencies
11
FY 2012/13 General Fund
Operating Budget
•Historically, the General Fund budget has increased between
6% and 8% annually, primarily due to increases in salary and
benefit costs versus 4.9% increase in expenditures
•Includes $0.8 million reserve to be set aside for FY 2013/14,
to help offset the loss of the carry forward of FY 2011/12 one-
time pension credit of $2.2 million in the General Fund
12
FY 2012/13 General Fund
Operating Budget
•$18.6 million (8 percent) more than the FY 2006/07 budget
•Despite pension contribution increases of $29 million during
same period
•Inflation from October, 2006 through June, 2012, a similar
period, was approximately 15 percent
•Annual contributions to the City’s two pension plans alone
represent more than $52 million (20 percent) in the General
Fund budget
13
FY 2012/13 2010 Pension Reform
Police and Fire
• All employees – reduced retiree COLA up to 2 years, but allowed pensionable off-duty
compensation/sick leave sell back up to the overtime compensation cap
• New employees – minimally increased retirement age, reduced pension multiplier,
averaged pensionable salary over more time, and further reduced retiree COLA
•Estimated Savings:
•Existing employees – Initial increase of $0.4 million – subsequent savings of
approximately $0.6 million
•New employees – $32.8 million over 30 years – minimal savings in early years.
Non-Sworn Employees:
• All employees – increased pension contributions by 2% and averaged pensionable
salary over more time
•Additional reductions for new employees include increased normal retirement age,
reduced pension multiplier, and reductions to retiree COLA
Estimated savings: $3.3 million in year one – New MBERP employees $900,000 in
the first year – $6 million per year after 10 years
14
FY 2012/13 – Additional Pension
Reform
•Budget Advisory Committee pension reform
recommendations presented August 29, 2012, for further
reforms to pension for new and non-vested employees
•Increases in retirement age to 55 with 10 years or 52
with 25 years
•Reduces pension multiplier
•COLA subject to Commission approval
•Incorporates a Defined Benefit Contribution component
•Allows pension reform to be incorporated into the current set
of contract negotiations
•Earliest savings would be in FY 2013/14
15
FY 2012/13 General Fund –
One-time Revenues
•City Policy is to use one-time, non-recurring revenue for capital
expenditures or one-time expenditures and not subsidize recurring
personnel, operations, and maintenance costs
FY 2012/13 General Fund one-time revenues:
•$3.4 million in prior year surplus (revenue in excess of expenditures)
specifically set aside for this purpose – similar surplus is anticipated to be
available at end of FY 2011/12 for use in FY 2013/14
•$1.5 million in Building Department reserves is anticipated to be available
through FY 2014/15
•Carry-forward savings from the $2.2 million allocation of the one-time
pension credit to the General Fund (not available for FY 2013/14)
•The total $7.1 million in one-time revenues is offset by a $1.4 million
transfer to capital
16
FY 2012/13 Value of Services Tax
Dollars Paid
•Proposed millage rate for FY 2012/13 reduces the operating
millage by 0.0746 mills, together with debt service millage
reduction (0.0316 mills) for a total reduction of 0.1062 mills
•Together with the 0.05 mills reduced in FY 2011 /12, the total
operating millage reduction to-date is 0.1246 mills –
representing 22% of the goal to reduce millage to 5.6555 mills
•Despite the reduction, the impact to homesteaded property
owners with proposed millage with a 3 percent CPI adjustment
to assessed values:
•$4 for a median value property
•$10 for an average value property
17
FY 2012/13 Value of Services Tax
Dollars Paid
Proposed General Fund operating budget includes $3.5 million in service enhancements
•$0.7M for additional Building Department resources - offset by increased CSL
revenue
•$2.85M in services enhancements --Equivalent to 0.1520 mills -- impact of $19/$43
to the median/average value homesteaded property
•12 police officers for Washington Avenue, a crime suppression team, and North
Beach;
•Additional overtime for homeless outreach
•Additional staffing for records unit and detention center
•Enhanced controls in Police Internal Affairs and regular outside audits of high
risk areas
•Two positions to manage leases/rental contracts and monitor special
events/concessions
•Grants software for city departments and equipment needs at Colony Theatre
•$1.4M transfer for funding Pay-As-You -Go funding for capital projects
*Note: Enhancements to Police exclude vehicles -- a savings of $266,000 in FY 2013/14
18
FY 2013/14 Fiscal Challenges
•Loss of one-time pension credit being used in FY 2012/13 ($2.2
million in General Fund)
•Property values unknown
•FY 2012/13 wage concessions not yet negotiated
•Pension reform not yet implemented
•Even with growth in property values, reductions in millage will be
challenged by increasing pension costs
•FY 2013/14 is the last of 5 years in recognizing the major market
decline of FY 2007/08
•Although less significant, market declines occurred in FY 2008/09
and 2010/11
19
FY 2012/13 Enterprise Fund Budgets
•Sanitation, Water, Sewer, Stormwater, Parking, and Convention Center
•$161.1 million - $4.4 million increase (2.8 percent)
•Increases in salary, pension, and health cost similar to the General
Fund; the Sanitation Department Proposed Budget incorporated
reduced personnel costs and increased use of temporaries based
on historical information ($2.1 million)
•Increases in Sewer treatment and DERM fees charged by Miami-
Dade County ($4.6 million) – with associated increases in sewer
revenues collected by the City
•Increases in funding for future renewal and replacement projects
and equipment determined by prior year depreciation amounts ($2.2
million)
20
FY 2012/13 Enterprise Fund Budgets
•These increases are offset by decreases in debt service payments by
the Stormwater Fund ($2 million)
•debt service for bonds sold in FY 2011/12 and associated
refinancing of existing bonds resulted in lower than budgeted debt
service costs
•Reduced operating costs in the Convention Center Fund offset by
reduced revenues due to an accounting treatment change of electrical
revenues ($1.2 million)
•Reduced funding needed to be transferred to the Stormwater Rate
Stabilization Fund ($1 million)
•Other miscellaneous reductions ($0.3 million)
21
FY 2012/13 Internal Service Fund
Budgets
•Central Services, Fleet Management, Information Technology, Risk
Management and Property Management
•$59.3 million - $5.0 million increase (9.2 percent)
•Increases in salary, pension, and health cost similar to the General
Fund
•Increases in Police liability claims ($0.75 million)
•Increases in debt service for replacement of vehicles and equipment
($1.1 million)
•Costs are completely allocated to the General and Enterprise Fund
departments