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20120912 BM Budget RelatedMIAMI BEACH City Commission Meeting (Budget Related Items) City Hall, Commission Chambers, 3rd Floor, 1700 Convention Center Drive September 12, 2012 Mayor Matti Herrera Bower Vice-Mayor Jorge R. Exposito Commissioner Michael Gongora Commissioner Jerry Libbin Commissioner Edward L. Tobin Commissioner Deede Weithorn Commissioner Jonah Wolfson Interim City Manager Kathie G. Brooks City Attorney Jose Smith City Clerk Rafael E. Granado Visit us at www.miamibeachfl.gov for agendas and video "streaming" of City Commission Meetings. ATTENTION ALL LOBBYISTS Chapter 2, Article VII, Division 3 of the City Code of Miami Beach, entitled "Lobbyists," requires the registration of all lobbyists with the City Clerk prior to engaging in any lobbying activity with the City Commission, any City Board or Committee, or any personnel as defined in the subject Code sections. Copies of the City Code sections on lobbyists laws are available in the City Clerk's Office. Questions regarding the provisions of the Ordinance should be directed to the Office of the City Attorney. BUDGET RELATED ITEMS REGULAR AGENDA 1 Budget Related Items, September 12, 2012 R5 -Ordinances R5G Ordinances Modifying The Building, Fire, Planning And Public Works Departments Fees Related To The Building Development Process Implemented On February 1, 2010. 1. An Ordinance Amending Section 14-61 "Permit Fees", Section 14-62 "Building Permits", And That Portion Of Appendix A Of The City's Code Of Ordinances By Modifying Inspection Fees For Building, Plumbing, Electrical, And Mechanical Work, And For Other Building Department Activities; Providing For Repealer, Severability, Codification, And An Effective Date. First Reading 2. An Ordinance Amending Section 50-3 "Plans Examination, Inspections, Permits" And That Portion Of Appendix A Of The City's Code Of Ordinances By Modifying Inspection Fees For Building, Plumbing, Electrical, And Mechanical Work, And For Other Fire Department Activities; Providing For Repealer, Severability, Codification, And An Effective Date. First Reading 3. An Ordinance Amending Section 15-32 "Fees", 15-40 "Refunds", 15-42 "Adjusted Rates" And That Portion Of Appendix A Of The City's Code Of Ordinances By Modifying Zoning Fees For Building, Plumbing, Electrical, And Mechanical Work, And For Other Planning Department Activities; Providing For Repealer, Severability, Codification, And An Effective Date. First Reading 4. An Ordinance Amending Section 98-92 "Permit Fees", Section 98-94 "Refunds", And That Portion Of Appendix A Of The City's Code Of Ordinances By Modifying Inspection Fees For Building, Plumbing, Electrical, And Mechanical Work, And For Other Public Works Department Activities; Providing For Repealer, Severability, Codification, And An Effective Date. First Reading (Requested by Finance & Citywide Projects Committee) (Legislative Tracking: Building Department) R7-Resolutions R7 A 1 A Resolution Adopting: 1) The Tentative Ad Valorem Millage Of 6.1122 Mills For General Operating Purposes, Which Is Eight And Eight-Tenths Percent (8.8%) More Than The "Rolled- Back" Rate Of 5.6184 Mills; And 2) The Debt Service Millage Rate Of 0.2568 Mills; Further Setting The Second Public Hearing To Consider The Millage Rate For Fiscal Year (FY) 2012/13, On Thursday, September 27, 2012 At 5:01 p.m. 5:01 p.m. First Reading Public Hearing (Office of Budget & Performance Improvement) R7 A2 A Resolution Adopting Tentative Budgets For The General, G.O. Debt Service, RDA Ad Valorem Taxes, Enterprise, And Internal Service Funds For Fiscal Year 2012/13 Subject To A Second Public Hearing Scheduled On Thursday, September 27, 2012 At 5:01 p.m. 5:01 p.m. First Reading Public Hearing (Office of Budget & Performance Improvement) 2 2 Budget Related Items, September 12, 2012 R7-Resolutions (Continued) R7B1 A Resolution Of The Board Of Directors Of The Normandy Shores Local Government Neighborhood Improvement District Adopting The Tentative Ad Valorem Millage Of 1.1444 Mills For Fiscal Year (FY) 2012/13 For The Normandy Shores Local Government District, Which Is Thirteen And Seven-Tenth Percent (13.7%) More Than The "Rolled-Back" Rate Of 1.0063 Mills, Subject To A Second Public Hearing Scheduled On Thursday, September 27, 2012 At 5:02 p.m. 5:02 p.m. First Reading Public Hearing (Office of Budget & Performance Improvement) R7B2 A Resolution Of The Board Of Directors Of The Normandy Shores Local Government Neighborhood Improvement District Adopting The Tentative Operating Budget For Fiscal Year (FY) 2012/13 Subject To A Second Public Hearing Scheduled On Thursday, September 27, 2012 At 5:02 p.m. 5:02 p.m. First Reading Public Hearing (Office of Budget & Performance Improvement) End of Budget Related Items 3 3 THIS PAGE INTENTIONALLY LEFT BLANK 4 COMMISSION ITEM SUMMARY Condensed Title: Ordinances Modifying The Building, Fire, Planning And Public Works Departments' Fees Related To The Building Develo ment Review Process lm lamented On Februa 1, 2010. K~}'_ Intended Outcome Supf!orted: Strengthen Internal Controls; Maximize Efficient Delivery Of Services; Increase Community Satisfaction With City Government; Minimize Taxes I Ensure Expenditure Trends Are Sustainable Over The Long Term; Improve The City's Overall Financial Health And Maintain Overall Bond RatinQ Supporting Data (Surveys, Environmental Scan, etc.): In the 2012 Community Satisfaction survey, which covered the period of 2009 through February 2012, 47% of businesses described their experience with the Building Department as positive, and 58% gave a positive evaluation of the department for overall satisfaction. 54% of businesses perceived the Building Department as being open to hearing their concerns. 50% of businesses thought the Building Department's inspections were consistent over time or believed that the inspections were fair. 70% of businesses rated Building Department employees as courteous and professional and the same percentage thought employees had proper training and knowledge. Issue: Shall the Mayor and City Commission approve the ordinances amending various fees related to the Building Develo ment Review Process in the Cit of Miami Beach? Item Summary/Recommendation: On January 13, 2010, the City Commission approved four ordinances for the Building, Fire, Planning and Public Works departments related to the fees for the Building Development Process. These ordinances went into effect on February 1, 2010 and provided a complete overhaul of the fee structure for the above mentioned departments. Additional changes were adopted by the City Commission in September 2011 that went into effect on October 1, 2011, including reductions to the fees for certain permit types, a continuation of discounts for permit fees related to certain permit types, a waiver of the Consumer Price Index (CPI) adjustments for 2011 and 2012, and the introduction of a cap on permit fees at 10% of the calculated cost of construction. The Administration had stated that it would return to the Committee for additional discussion after the 2011 changes were adopted. The Administration held discussions with the Finance and Citywide Projects Committee (Committee) in July and August, 2012 regarding the following proposals, and the Committee recommended that they be forwarded to the full City Commission for further consideration: 1) Fees related to Planning and Public Works' efforts in the Alteration/Remodeling permit types should be reduced, 2) Discounts should continue past September 30, 2012, 3) The CPI increase for 2013 pursuant to the existing ordinance should not be waived, and 4) Fees related to certain permit types should be revised, based on the evaluation of the 10% cap on permit fees and further evaluation of permit fees in general, and that the CPI increase should not apply to these permit types. Additionally, there is a scrivener's error in Section 15-42 "Adjusted Rates" in the City's Code of Ordinances relative to the fees for the Planning Department where the language refers just to that particular section but should refer to the Article, not the Section. The Administration is recommendinQ that the City Commission adopt the ordinance with the proposed revisions. Board Recommendation: The Finance and Citywide Projects Committee heard this item at its July 10, 2012 and August22, 2012 meetings and recommended that the Ci Commission ado t the ordinances. Financial Information: Source of Amount Account ~ 1 2 I Total Financial Impact Summary: A cumulative loss of permit revenue approximately $295,000 annually for the Building Development Process departments (Building, Fire, Planning and Public Works). AGENDA 1 TE M ---"f<_$_(;.. __ q-JZ.-{ DATE ____ _ MIAMI BEACH 5 MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov TO: FROM: DATE: COMMISSION MEMORANDUM Mayor Matti Herrera Bower and Members of the City Co'Tsion Kathie G. Brooks, Interim City Manager /4/-• September 12, 2012 SUBJECT: ORDINANCES MODIFYING THE BUILDING, FIRE, PLANNING AND PUBLIC WORKS DEPARTMENTS FEES RELATED TO THE BUILDING DEVELOPMENT PROCESS IMPLEMENTED ON FEBRUARY 1, 2010. ADMINISTRATION RECOMMENDATION The Administration recommends that the City Commission adopt the four ordinances amending various fees related to the Building Development Process in the City of Miami Beach. INTRODUCTION On January 13, 2010, the City Commission approved four ordinances for the Building, Fire, Planning and Public Works departments related to the fees for the Building Development Process. These ordinances went into effect on February 1, 2010 and provided a complete overhaul of the fee structure for the above mentioned departments. Additional changes were adopted by the City Commission in September 2011 that went into effect on October 1, 2011, including reductions to the fees for certain permit types, a continuation of discounts for permit fees related to certain permit types, a waiver of the Consumer Price Index (CPI) adjustments for 2011 and 2012, and the introduction of a cap on permit fees at 10% of the calculated cost of construction. The Administration had stated that it would return to the Committee for additional discussion after the 2011 changes were adopted. The Administration held discussions with the Finance and Citywide Projects Committee (Committee) in July and August, 2012 regarding the following proposals, and the Committee recommended that they be forwarded to the full City Commission for further consideration. • Fees related to Planning and Public Works' efforts in the Alteration/Remodeling permit types should be reduced, • Discounts should continue past September 30, 2012, and become permanent rather than roll over from year to year, • The CPI increase for 2013 pursuant to the existing ordinance should not be waived, and • Fees related to certain permit types should be revised downward, based on the evaluation of the 1 0% cap on permit fees and further evaluation of permit fees in general, and that the CPI increase should not apply to these permit types. 6 City Commission Memorandum September 12, 2012 Building Development Process Fees Page 2 of9 Additionally, there is a scrivener's error in Section 15-42 "Adjusted Rates" in the City's Code of Ordinances relative to the fees for the Planning Department where the language refers just to that particular section but should refer to the Article, not the Section. The Administration is recommending the language in the Ordinance be changed for accuracy. BACKGROUND Building Development Process The Building Development Process ("Process") in the City of Miami Beach includes the Building Department, the Fire Department's Fire Prevention Division, the Planning Department and the Public Works' Engineering Division. The Building Department provides process intake, routing, billing, and computer support for the entire Process. The Building Department staff conducts plans review and inspections for plumbing, structural, building, electrical, governmental compliance, elevator, accessibility and mechanical trades as required by the different permit types for compliance with Florida Building Code as well as the Miami Beach City Code. Additionally, the Building Department reviews permit applications for compliance with outside regulatory agencies. The Fire Department's Fire Prevention Division is involved in the majority of building permits issued by the City, with the exception of single-family homes. A Fire Department fee is collected for each building permit corresponding to the Fire Department's review and inspection. The Planning Department serves as staff to the City's Planning Board, Board of Adjustment, Design Review Board, Historic Preservation Board, and Single Family Residential Review Panel. Depending on the scope of the project, a new development is required to receive approval from one or more of these Boards. The Planning Department processes applications, reviews them and prepares recommendations to all of the above Boards. Fees are assessed for the various planning applications according to a fee schedule contained within the City Code. The Planning Department also reviews all building permits for compliance with the City's land development regulations, comprehensive plan and consistency with architectural review guidelines and preservation appropriateness criteria. This zoning review is required to ensure compliance with existing legislation, zoning requirements, and state growth management requirements. The Public Works Department Engineering Division staff conducts plan reviews and inspections for all construction activities that occur within the public right-of-way (streets, roadways, waterways, alleys and sidewalks), public property and easements. The Public Works Department also performs plan review activities supporting a variety of Building Department permits on private property that will connect and/or will have potential impacts to City-owned utilities, right-of-way and/or utility easements. Further, the Building, Fire, and Planning Departments participate in the Certificate of Occupancy or Completion process that allows for the use and occupancy of the structure based on certifying that the use is permitted and that the structure is in compliance with applicable City Codes. 7 City Commission Memorandum September 12, 2012 Building Development Process Fees Page 3 of9 2009 Building Development Process Fees Study In mid-2009, the City initiated a study of costs and fees related to the Process with the consulting firm Maximus Consulting Services Inc. ("Maximus"). The primary focus of the study was to develop a simplified fee structure and associated fee levels for services performed by the Building Department in enforcing the Florida Building Code, as well as services performed by the Fire, Planning, and Public Works Departments in enforcing other Federal, State and City Codes related to building permits. On January 13, 2010, the City Commission approved four ordinances for the Building, Fire, Planning and Public Works departments related to the fees for the Building Development Process, as outlined in the Maximus study. These ordinances went into effect on February 1, 2010 and provided a complete overhaul of the fee structure for the above mentioned departments. At the time of implementation, there were increases in the fees related to the Process for the Fire, Planning, and Public Works Departments. These were offset by discounts in the Building Department fees so that, in the aggregate, the total combined fees charged to the development community were to remain at current levels. Decreases in Building Department revenues were partially replaced by previously set aside Building Department reserves in FY 2009/1 0 and are budgeted to be offset in FY 2011/12 so that costs related to enforcing the Florida Building Code continue to be offset by Building revenues. Subsidies from other general fund revenue sources were $725,000 in FY 2009/10, and $1 million in FY 2010/11. It is important to note that discounts were applied to fees to achieve three (3) objectives: 1) ensure that permits are pulled for small projects. If permit fees represent a large or excessive percent of the project costs, it will discourage customers from pulling permits; 2) provide lower fees for residential projects; and 3) incentivize environmental projects. In 2011, the Administration presented additional permit fee changes to the Committee for consideration. These included additional reductions to the fees for certain permit types, a continuation of discounts for permit fees related to certain permit types, a waiver of the Consumer Price Index (CPI) increases for 2011 and 2012, and the introduction of a cap on permit fees at 10% of the calculated cost of construction. The Committee recommended these additional changes, and they were adopted by the City Commission and made effective on October 1, 2011. During the discussions regarding the 2011 changes, the Administration noted that further changes were still being considered and would be brought back to the Committee for consideration. Discussions were held at the July 10, 2012 and August 22, 2012 Committee meetings, where the Committee recommended that the actions be brought forth to the full City Commission for ratification. Current Discussion Points At this time, the Administration is proposing revising the permit fees as follows: • Discounts should continue past September 30, 2012 When the current fee structure was adopted, there were some discounts built into the fee structure that were set to expire on September 30, 2011. Last year, these were extended and are now set to expire on September 30, 2012. 8 City Commission Memorandum September 12, 2012 Building Development Process Fees Page 4 of9 The original intent of these discounts were: 1) To ensure that permits are pulled for small projects. If permit fees represent a large or excessive percent of the project costs, it will discourage customers from pulling permits; 2) To provide lower fees for residential projects; and 3) To incentivize environmental projects. The Administration is recommending that the ordinance be changed such that the discounts remain permanently in effect. • Fees related to Planning and Public Works' efforts in the Alteration/Remodeling permit types should be reduced As a result of concerns that were raised by certain segments of the development community, as well as some concerns raised by staff, regarding the fee amounts and administrative processes related to the fees, the Administration brought Maximus back to review the status of the permit fee implementation to answer whether or not the City met its original objectives, if staff was applying the fee structure correctly, and to review the issues being encountered and identify appropriate solutions. A copy of the Maxim us report is attached as Attachment A. Maximus' re-evaluation of the City's implementation revealed that the City's new permit fee structure based on square feet is more simple than the previous schedule, which was based on construction cost. Maximus spoke at length with Building Department staff to determine if the staff was feeing permit applications correctly and found that indeed they were. With regard to whether or not the Building Development Process departments were recovering more in fees than costs for operation, Maximus determined that the departments were under-recovering their actual costs. Fee collection was actually less than what Maximus originally projected, and not covering the costs of the departments related to the Building Development Process. Based on discussions Maximus had with staff, Maximus proposed refining plan review and permit inspection times for the Alteration/Remodel permit types by the Planning and Public Works Departments. It should be noted that the levels of effort suggested for adjustment are not significant components of the overall fees. Maxim us estimates that the impact to the permit fees collected will result in a savings to customers in the amount of approximately $493,000. This amount will fluctuate depending on the number of permits applied for, the amount of square footage being renovated, and other factors outside of the City's control. The impact to the Planning Department Permit Fee revenue was more significant, estimated at approximately $412,000, and the impact to the Public Works Department budget is approximately $81,000, which will have to be replaced by General Fund dollars to completely fund the operations. The Administration recommends revising the permittees for the Planning and Public Works Departments for Alteration/Remodeling permit types in an effort to provide 9 City Commission Memorandum September 12, 2012 Building Development Process Fees Page 5 of9 more accurate permit fees and additional savings to the City's Building Development Process customers. • The CPI increase for 2013 pursuant to the existing ordinance should not be waived The current ordinances require the fees to be administratively adjusted annually to reflect increase( s) or decrease( s) in the Consumer Price Index for Consumers in the Southeast United States for all items, unless otherwise directed by the City Commission. The Consumer Price Index (CPI) adjustments for 2011 and 2012 were waived by the City Commission, finding it to be in the best interest of the City and the public. As a point of information for the City Commission's consideration, the CPI for the southern region for all items from October 2010 through October 2011 was an increase of 3. 7%. This means that the fees will be increased by 3. 7%. The estimated impact on the Building Development Process departments' FY 2012/13 Current Service Level (CSL) revenues is approximately $404,000 if enacted effective October 15, 2012. Further, the preliminary estimated subsidy for the FY 2012/13 CSL budget from non-Building General Fund revenues is approximately $1.4 million, including indirect costs. Without the use of Building Department reserves set aside in prior years, the subsidy would have been 2.9 million. The Administration is recommending allowing the CPI increases of 3.7% take effect effective October 15, 2012. It should be noted that the respective sections of the City's Code of Ordinances dealing with the fees associated with all four ( 4) departments' role in the Process allow for the fees to be "administratively adjusted annually", and not changed by ordinance. However, since so many other changes are proposed, the Administration felt it necessary to include the adjustment in the attached ordinances to eliminate confusion for the codifier, staff and customers. • Fees related to certain permit types should be revised based on the 10% cap on permit fees and further evaluation of permit fees in general As part of the revisions to the Building Department fees adopted in September 2011, effective October 1 , 2011 , there is a 1 0% cap on permit fees. Section 14-61 (p) of the City's Code of Ordinances requires the Administration to reevaluate the permit fees of any permit application where the permit fees, not including any outside agency fees or surcharges, are greater than 10% of the value of construction as declared on the permit application. Excluded from this process are permit applications where the value of construction is less than $1,000 or the permit fee is the minimum permit fee. The reevaluation process consists of a plan reviewer using industry standard cost estimating resources to confirm whether the value of construction as stated on the permit application is in line with the construction industry. The Administration has determined that the level of effort to reevaluate the construction values for all applications triggered by the 10% cap would detract from the plan review level of service if conducted by existing City staff. So, at the current time, this reevaluation process is being conducted by supplemental staff hired through an agreement between the City and a staffing provider, at a cost of approximately $140,000 per 10 City Commission Memorandum September 12, 2012 Building Development Process Fees Page 6 of9 year. It should be noted that this supplemental staffer is also a licensed inspector, and can be called on to provide other functions as needed by the Department, so the $140,000 is not entirely attributable to the 10% rule. However a very conservative estimate is that approximately 55% of this inspector's time is utilized in conducting the reevaluations. Based on the plans submitted with the permit application, the evaluator uses RS Means data, a widely accepted provider of construction costing, to determine the industry standard value for the work described (determined value). The permit fees are evaluated against the determined value to see if the fees are still greater than 10% of the determined cost. • If the permit fees are less than 1 0% of the determined cost, no refund is processed. • If the fees are still more than 1 0% of the determined cost, a refund is processed after the project construction is complete and passes all required inspections, assuming that the refund meets the requirements of Section 14- 62(b) of the City's Code of Ordinances (refunds must exceed $100 in order to be refunded). • If a construction value cannot be determined by the above-indicated resources, typically either because plans are not required as part of the application submittal or RS Means doesn't have an appropriate category, the actual level of effort for plan review and inspection shall be calculated and charged, but shall not exceed the originally calculated fee at time of permit application. When this occurs, the level of effort costs cannot be calculated until the construction is complete, so a determination as to what the permit fee will be and if any refund is due to the customer cannot be made until after all inspections are complete and the project has received final approval. The 10% permit fee cap has been in place since October 1, 2011. Between October 1, 2011 and July 31, 2012, there were 11,172 permit applications approved. Of those, only 1,481 (13.26%) triggered a 10% cap evaluation. The permit fees associated with the over 11 ,000 approved permit applications exceeded $8.6 million. If the permit fees associated with the permits that triggered the 10% cap were all lowered to no more than 10% of the stated value of construction, the potential reduction in permit fees would be approximately $511,000, which represents approximately 6% of permit fees collected. As of August 1, 2012, 1 ,434, or approximately 97%, of the permits that triggered a 10% cap reevaluation had been evaluated. Of those, 291 were approved for a refund. This represents less than 20% of all permits triggered for reevaluation, and less than 3% of all approved permit applications. Approximately $142,000 has been approved for refunds back to the customers based on the 291 permits. This represents 1.65% of the permit fees collected for the 11,172 permit applications approved as of July 31, 2012. Of those remaining to be reviewed, the maximum amount of any potential refunds was approximately $53,000. This number will be 11 City Commission Memorandum September 12, 2012 Building Development Process Fees Page 7 of9 revised as reevaluation takes place. There are still approximately 180 permits that have been evaluated, but for which an industry standard construction cost could not be determined, either because the permit application does not require a plan submittal, or because RS Means does not include a category or methodology for costing that kind of work out. The permit fees for this work will be determined based on actual level of effort, but shall not exceed the permit fee costs calculated at time of permit application. The total cumulative amount of any potential refunds is approximately $125,000. There are approximately 960 permits (approximately 65% of those triggered for a 10% cap evaluation) that have been reevaluated for which no refund is due to the customer because the permit fees calculated at time of application are less than 10% of the value of work as determined using industry standard cost estimating methodologies, as opposed to the value submitted at the time of application by the applicant. The sum of the refunds approved to date, the maximum exposure of those permit fees yet to be reevaluated, and those that will be determined by level of effort is $320,000. This equates to 3.7% of the approximately $8.6 million collected in permits fees for those permits approved during the stated timeframe. It should be stated that evaluating these plans, determining the industry standard construction cost, and approving and processing any potential refunds is a labor intensive process. The cost of supplemental staff reevaluate all triggered plans is conservatively estimated to be approximately $77,000. Staff time related to reviewing the determinations and processing the refunds has not been captured, but has been time consuming. Recommendations for Permit Fee Changes Related to 10% Permit Fee Cap With the analysis of the 1 0% permit fee cap impact on revenue, staff has also reviewed the types of permits most frequently resulting in a refund after reevaluation of the permit fees. It is important to focus on those permit types approved for a refund, as those are the ones where the reevaluation is reflecting that current permit fees are indeed greater than 10% of the industry standard value of construction. The five (5) permit types that resulted in the most refund approvals are provided here in order from highest number of approvals to lowest. These five (5) permit types alone represent approximately 70% of the permits where the reevaluation resulted in a refund being issued to the customer. • Alteration/Remodeling Permits-54 of 291 (18.56%) • Alteration/Remodeling Condo Permits-46 of 291 (15.81%) • Low Voltage Electrical Permits -44 of 291 ( 15.12%) • Plumbing Alteration/Remodeling Permits -33 of 291 ( 11.34%) • Partial Demolition Permits -25 of 291 (8.59%) As was discussed at the July 10, 2012 Committee meeting, the Administration has already proposed changes to the Alteration/Remodeling and Alteration/Remodeling Condo permit types, by refining the fees for the Planning and Public Works Departments on alteration/remodeling work. It is anticipated that these changes will reduce the 12 City Commission Memorandum September 12, 2012 Building Development Process Fees Page 8 of9 Alteration/Remodeling and Alteration/Remodeling Condo permits fees significantly enough to no longer trigger a reevaluation on the majority of these types of permits. With regard to the Low Voltage Electrical Permits, Plumbing Alteration/Remodeling Permits and Partial Demolition permits, the Administration is proposing permit fee refinement as identified in Appendix A of the City's Code of Ordinances, as outlined in the attached summary of proposed fee recommendations (Exhibit 2), which outlines the permit fees for the Building, Fire, Planning and Public Works Departments. Again, it is anticipated that these reductions will reduce permit fees on these permit types significantly enough to have permit fees remain under 10% of the determined value of construction for the majority of these permit types. In the case of Low Voltage Electrical Permits, a fee will no longer apply to these applications when they are submitted as part of a Master Permit, which will result in further savings to customers. In addition to the top five (5) permit types approved for refund, the Administration is proposing refinements to the following permit types. These permit types represent another approximately 7% of the permit types approved for a refund, which if approved, will address approximately 77% of the permits approved for a refund. • Awning/Canopy/Patio Cover Permit • Signage Permit (both electric and non-electric) • Repair Existing Elevator Permit • Generators/Solar Systems • Solar/Alternative Power • Painting • Installation of Plumbing Fixtures The estimated financial impact of these fee reductions on an annual basis would be approximately $206,000, not including the Alteration/Remodel changes described previously. It should be noted that the Administration does not recommend that the proposed CPI increase be applied to the permit categories outlined for revision above. Additionally, there is a scrivener's error in Section 15-42 "Adjusted Rates" in the City's Code of Ordinances relative to the fees for the Planning Department where the language refers just to that particular section but should refer to the Article, not the section. The Administration is recommending the language in the Ordinance be changed for accuracy. FISCAL IMPACTS OF PROPOSED REVISIONS Based on the projections developed by Maximus and staff, it is anticipated that the fiscal impact for the revisions proposed herein are as follows, assuming similar permit activity: Revision (Savinas )/Cost Planning Department Alteration/Remodeling Fee Revision $(412,000) Public Works Department Alteration/Remodeling Fee Revision $( 81,000) CPI Increase $ 404,000 Fee Revisions Based on 1 0% Cap Evaluation and Further ~(206,000) Evaluation of Permit Fees in General Net Change $(295,000) 13 City Commission Memorandum September 12, 2012 Building Development Process Fees Page 9 of9 CONCLUSION The Administration will continue to further evaluate permit fees for those where refinements are recommended, as well as the remaining permit fee types, on a regular basis and bring further recommendations to the Finance and Citywide Projects Committee for review and discussion. The Administration recommends that the City Commission revise the scrivener's error in Section 15-42 of the City's Code of Ordinances, and revise fees related to the Building Development Process as described in this memorandum, Exhibits 1 and 2, and the attached ordinances, including: • Fees related to Planning and Public Works' efforts in the Alteration/Remodeling permit types should be reduced, as referenced in Exhibit 1, and • Discounts should continue past September 30, 2012, rather than rolling over from year to year, • The CPI increase for 2013 pursuant to the existing ordinance should not be waived, and • Fees related to certain permit types should be revised, based on the evaluation of the 10% cap on permit fees and further evaluation of permit fees in general, and that the CPI increase should not apply to these permit types, as referenced in Exhibit 2 and the attached ordinances. KGB/JGG/SS/KT T:\AGENDA\2012\9-12-12\Permit Fee Revisions\Permit Fee Revisions memo 09122012.doc 14 City ofJ'Jt/iami Beach, Florida Building Development Services-Review of Implementation of Fee Study i'Jtlay 2011 INTRODUCTION t'J< h . ..i bH: .1 This report is a review of the implementation of the development fee study conducted in 2009. It includes two deliverables; the first reviews the structure of the fees with cost/ revenue analysis, the second reviews current issues with the fee structure and proposes recommendations for improvement. REVIEW OF IMP LENT ATION OF FEE STUDY (FIRST DELIVERABLE) The City of Miami Beach contracted with MAXIM US to conduct a cost of services study of its development service fees. The study was completed in the fall of 2009, after which The City of Miami Beach enacted the new fee schedule in February 1, 2010. The adopted fee schedule includes discounts on various fee services from the full cost determined through the cost analysis. The objectives of the study were to: a) Simplify the fee structure b) Ensure that fees are revenue-neutral c) Review if the City applied the fees correctly based on the final report SIMPLICITY OF THE NEW FEE STRUCTURE The City of Miami Beach spent a significant amount of staff time and effort during the cost of service study to make sure that the data it provided was accurate and reasonable. It also took the time to understand our proposed Nexus model and adapt it to the specific needs of the City. The City's development services fee schedule is a thirty-page document-many times longer than we see in most cities, mostly due to the desire to tailor the schedule to a variety of specific development activities. Length by itself does not create complexity, but it can make it harder to find a specific item in a long list. It made the process of developing the fee schedule take much longer than it usually does, but it is not our finding that the resulting fee schedule is too complicated. We feel that the City took a move toward simplicity by emphasizing per square foot charges in construction tables. We also recommend that the City limit the number of unique new fee types that evolve over time, but a limited number of periodic changes is not, in our opinion, a violation of the "keep it simple" principle. REVENUE-NEUTRAL To conduct a cost versus revenue comparison since the adoption of the new fee schedule, we requested the following information from the City: • Revenue generated with new fees by month since adoption • City cost based on the FY 2010/11 adopted budget • Permit demand associated with those fees MAXIMUS Consulting Services, Inc. -I - 15 City of Miami Beach, Florida Builtling Developmelll Services-Review of lmplementatioll of Fee Study May 2011 A detailed analysis with graphs of actual revenue and budgeted cost by month is attached to this report in Excel format. The table below shows the variance of revenue projection based on the change in fully- loaded hourly rates from FY 2008-09 to FY 2010-11. The building department hourly rate has increased by 12% but the hourly rates for Planning, Public Works and Fire have all decreased. 2008/09 2010/11 Fully-loaded Fully-loaded hourly rate hourly rate %Change Building $ 114.00 $ 127.53 12% Planning $ 108.08 $ 98.80 -9% Public Works $ 103.07 $ 85.49 -17% Fire $ 95.46 $ 93.29 -2% The table below shows the summary of actual revenue and budgeted costs for the four departments involved in development services. FY 2007/08 2009 Maximus Study 2011 Review Percent Total MAXIMUS Total MAXIMUS Cost Projected Percent Projected Recovery Actual Revenue Estimated Percent Actual Revenue at Full Cost Revenue with with March 2010-Cost for FY Cost TOTAL REVENUE Revenues Cost Recovery Discounts Discounts Feb 2011 2010/11 Recovery BUILDING Annual Revenue • $ 9,732,237 $ 9,536,470 $ 8,144,734 $ 7,833,458 $ 10,680,846 Monthly Average $ 811,020 $ 794,706 102% $ 678,728 85% $ 652,788 $ 890,071 73% PLANNING Annual Revenue $ 452,023 $ 1,597,016 $ 1,337,078 $ 1,163,547 s 1,453,285 Monthly Average s 37,669 $ 133,085 28% $ 111,423 84% $ 96,962 $ 121,107 80% PUBUC WORKS (Engineering) Annual Revenue s 650,448 $ 1,313,507 s 1,184,707 s 599,599 s 1,090,211 Monthly Average $ 54,204 $ 109,459 50% $ 98,726 90% $ 49,967 $ 90,851 55% FIRE (Prevention) Annual Revenue s 648,049 $ 1,836,380 $ 1,499,136 $ 1,408,680 s 1,799,652 Monthly Average $ 54,004 ~ 153,032 35% s 124,928 82% s 117,390 $ 149,971 78% GRANO TOTAL $ 11,482,757 $ 14,283,373 80% $ U,16S,655 85% $ 11,005,284 $ 15,023,994 73% Proj. Revenues with Proposed Revisions $ 7,833,458 $ 652,788 s 751.274 s 62,606 $ 520,265 $ 43,355 $ 783,847 $ 65,321 $ 9,888,844 "Excludes One time project Closeout revenues in the amount of$ 2,673,120collected in FY 2007/08and $922,627 collected between March 2010 and February 2011 Our understanding is that the development industry itself has changed since 2009, resulting in a shift from major new construction to minor remodeling projects. That appears to be the most likely reason for the shortfall. MAXIMUS Consulting Services, (nc. -2- 16 City of Miami Beach, Florida Building Development Services-Review of Implementation of Fee Study May 2011 APPLICATION OF FEE STRUCTURE Has the City applied the fee schedule correctly? Not having directly observed how City staff calculated fees, MAXI MUS cannot answer this question based on direct observation of how fees were calculated. However, City staff demonstrated to us that they understood how to calculate and apply fees. Alteration/remodel applications generated the most discussion in this project, but that discussion was more an expression of concern that the prices seemed high than how to apply fees. During this project, we had several conversations with City staff that left us confident that they know how to apply fees correctly and that reasonable processes are in place to avoid charging unfair or excessive fees. One additional piece of evidence that staff are applying fees correctly is the finding that revenues from permits are roughly equal to the underlying costs of each category of service and in no case is revenue greater than the underlying cost pool. RECOMMENDATIONS ON CURRENT ISSUES (SECOND DELIVERABLE) In 2009, the City of Miami Beach adopted a new fee schedule for permits issued by the departments of Building, Fire, Planning and Public Works (Engineering). City staff have gained experience using this schedule and feel that certain changes may improve the ease of use and collective understanding of how to apply the fees in the ordinance. The purpose of this report is to address current issues and potential new fee categories that were identified during brainstorming sessions with the City of Miami Beach. This report addressed the following issues: • The latest proposed "glitch ordinance" drafted to amend the fee schedules • Current issues with the fee structure, including: o Alterations/Renovation Permits o Single Family Homes o ROW fees/crane fees o High rise fees MAXIM US also reviewed ten alteration/renovation projects that the City deemed illustrative of questions about how to apply the pricing in the ordinance. These examples are provided in a separate file. "GLITCH BILL"-METHODOLOGY The basic premise of activity-based costing is simple -apply an inclusive hourly that reflects the cost of resources to the time required to provide a service. In our 2009 study, a critical piece of our methodology was the hourly rate calculation. The model applies hourly rates to City staff explanations of time requirements to provide various services With respect to the "glitch bill," we find that the City correctly applied the MAXIMUS methodology in calculations to arrive at prices for newly-listed services. MAXIMUS Consulting Services, Inc. -3- 17 Ci~v of lltliami Beaclt, Florida Building Development Services-Review of Implementation of Fee Stm~r Muy 2011 We have three recommendations regarding the "Glitch Bill." 1) While it is sometimes necessary to add additional fee categories, the City should implement a review process so that the new fee categories add clarification and simplification and are not overly complicated or duplications of another fee. We understand the City's need for the additional fees in the glitch bill and believe that these add clarification. 2) Continue the practice of applying rates to estimated time to provide services. In 2009, we worked with staff to estimate the time to perform each service. We spent a great deal of time refining these efforts and checking them against available hours and comparing them to the reported effort required by other local building development services. By extending time estimates by quantities of each transaction type, we built up a total time requirement for each department. We reconciled the total time reported for each department to the time available in each department. net of the time required for paid leave and administrative duties. 3) In the same vein, we suggest that the City of Miami Beach use the annual quantities multiplied by the new fee prices to determine the financial impact of these changes. The only new category that we recommend is one for "other projects not listed." It is impossible to predict all of the types of construction that may occur. In such cases, we recommend adding a category to the fee schedule as follows: "Other projects not listed. In case of a project not otherwise listed, the Building Director or designee shall apply the hourly rates for each department involved to an estimate of time required to review and inspect a new project." ALTERATIONS/REMODEL HISTORY Typically, we use a model with a category for alteration/remodel permits in different occupancy types. The effort required for such permits is less than that involved in construction of new premises. In earlier drafts of our analysis for the City of Miami Beach, our model contained Level 2 Alteration categories for various occupancy types. During draft reviews of our results in 2009, the cost of these activities were deemed sufficiently similar to new construction to merit eliminating the Level 2 Alteration permits in each occupancy type where it had been to that point and simply using the new construction category to price alteration/remodeling permits. Recently. City staff indicated that for some of the applications received. the new construction category might result in an unreasonably high cost-defined as a permit whose price is a significant cost relative to the cost of the underlying construction work itself. This may reflect construction industry trends in the last two years, in which, nationally, there are more small alteration projects and fewer projects involving new construction or significant remodeling. MAXIMUS Consulting Services, Inc. -4- 18 City of Jl;Jiami Beach, Florida Builtling Development Services-Review of Implementation of Fee Study 1\t/ay 2011 In reviewing the current situation, MAXI MUS finds that a reasonable resolution is to determine if the scope of remodeling will involve departments other than Building. The new construction permit pricing assumes involvement of the departments of Building, Fire, Planning and Public Works. After a detailed review, it was determined that all departments are still involved, but that the labor estimates for Planning and Public Works needed to be reduced to match the actual time that staff spend on these projects. ATTACHMENTZ City of Miami 8(!ach, Florida PROPOSED RENOVATION AND NEW CONSTRUCTION FEES PROPOSED DISCOUNTED FEE: ·lriCI\1mei'IQI Fee Per T01AI.AAOJEcTCOST Squue Footage lnCI\1mental Sq Ft (Per flundiitd Sit l't) la ... l Oceuponcy Typo FROM I UP TO Building I Fino I I PUblcJ Planning Works , TOTAl. FRoM I TO 0 500 f 300.00 $ 452« $ 131.17 $ 48.3&, s 522.44 $0 $ Uf420 B Busines~ 501 2,500 $ 255.92 $ 33.41 s 8lU2 $ ,0.83 s 378.54 ,$ 211110.74 s 1o.f45.01 2.501 25,000 $ 80.83 $ 7.40 $ 9.48 $ 0.63. $ .98J4 $ 10,243:18 .s 32.22Uo 25,001 50,000 $ 3U7 $ 5.71 $ 8.60 $ 0.62 $ $2.$0 $ 32.2'80.® $ 45.375.00 METHODOLOGY We worked with City staff to review and update the time spent working on Level 2 alterations. The departments of Building and Fire reviewed their previous estimates and confirmed that they were reasonable. The departments of Planning and Public Works submitted changes. We used the same methodology as in the 2009 study: 1) We worked with staff to determined the labor effort for each type of Level 2 alteration by occupancy type 2) If staff asked us to scale the tim~ estimates by project size, we did so based on the same scaling percentages as the 2009 study 3) We extended the departmental hourly rates to the time data that the departments supplied to reflect the cost of each activity 4) We update the fee schedule to show the actual cost and then applied the same percentage discounts to the recommended fees as in 2009 SPECIAL CASES There are two special cases that need to be noted: 1) Planning requested that we calculate a separate fee for alterations done in historic districts because they require additional labor effort. While we understand their desire for this request, we found that the difference or percent fee increase for historic properties was about 1 %, which we believe is not sufficiently material to justify the complexity of adding a new category to the fee schedule. 2) Staff report that Change of Use should be charged as New Construction. The City needs to clearly indicate this on the fee schedule. Our analysis has assumed that no permits are change of use. This assumption will undervalue the predicted revenue, but the City was not able to estimate how many alteration permits at this time require a change of use at this time. Ml\XLMUS Consulting Services, Inc. -5- 19 City ofllt/iami Beach, Florida Building Development Services-Review of Implementation t~{ Fee Study May 2011 REVENUE IMPACT The City asked MAXIM US to determine the financial impact of this change. The table below reflects the updated data from Planning and Public Works. Revenue Comparison Current Revenue Predicted Revenue (w/ (Building, Fire, Planning, updated labor and Public Works) discounts) Total $ 3,906,651 $ 3,413,214 Additional Public Subsidy $ (493,437) Additional Planning Subsidy $ (412,273) Additional Public Works Subsidy $ (81 '164) SPECIALTY PERMITS VERSUS LEVEL 2 RENOVATIONS/NEW CONSTRUCTION The current fee schedule contains specialty permits for construction permits such as kitchen and bath remodels. The City asked what to do when an application covers what would normally be several different specialty permit items -should they be charged for specialty permits and when should they be charged based on the square footage of the occupancy type of Level 2 alteration/remodel (which is the same fee as new construction)? The purpose of the fee schedule is to charge people what it costs to provide the services their requests invoke. The cost for specialty permits was determine based on how much staff time it would required to provide just that item. When a person needs to permit multiple work items, the staff time required is actually less (due to economies of scale). For example, inspectors can often make one trip to inspect multiple items. The point at which the City's labor estimate for providing services based on level 2 alteration/remodel become more efficient than for specialty permits (usually after 2-3 specialty permits are needed) is when the applicant should be charge for a level 2 alteration/remodel. The challenge here is that there are so many permutations of what an applicant may wish to do, that it is not feasible to produce a schedule that anticipates all of those project types. The schedules follow an average cost methodology. MAXIM US is not aware of any legal requirement to price services based on the requirements of single customers. It is not even clear that such a method would provide reduced fees Theoretically, it would result in lower charges for some and higher charges for others. With actual revenue data suggesting that City collections are below the full cost recovery levels suggested in the 2009 report, it seems that, despite City concern about potentially overcharging, that assessing a specialty permit fee for each feature is valid. SINGLE FAMILY HOMES MAXIMUS Consulting Services, Inc. -6- 20 City of Miami Beach, Florida Building Development Services-Review of lmpleme11tatitm of Fee Stm(v iUay 2011 The Building Department reviewed all labor time estimates and confirmed that the new construction fee schedule time estimates were correct. Based on this, the City of Miami Beach can make a policy decision to discount single family homes if it wishes, although the cost data would support full cost pricing. The City has already decided to discount all custom homes less than 1 ,500 square feet. However, this is a policy decision and does not affect how much it actually costs the city to provide these services. Square Footage TOTAl.. PROJECT COST TOTAl.. PROJECT COST I class! Occupancy Type FROM I UP TO FROM I TO FROM I TO Percent I Discount 0 1.500 $0 $ 9,635.18 $0 $ 9,905.78 -63% ---· R-3 Dwellings-Custom Homes 1,501 2,500 $ 9,775.68 $ 11,039.98 $ 6,419.20 $ 11,039.91'1 0% --2,50'1 10.000 $ 11.180.46 $ 21.fl78.00 $ 11,180AG $ 21,576.00 0% --10,001 50,000 $ 21,703.02 $ 72.384.00 $ 21,703.02 $ 72,384.00 0% In our experience, it is rare to discount single-family home permit prices. With all due respect to limiting charges to applicants, these calculations reflect the value of the work done, they amount to small percentages of total project cost and charging based on cost protects other taxpayers from having to pay part of the cost of these private-benefit transactions. RIGHT OF WAY FEES/CRANE FEES Public Works used to charge based for blocking of Right-of-Way, (plus .25 Per L.F. per day, plus a Right-of-Way obstruction fee of $10.53 per square ft per day. The City is now charging for the blocking of right Crane operators complained that the current $953 ROW obstruction fee which the crane operators pass onto their customers was too costly for crane lifts requiring less than 2 hours to complete. Public Works was tasked to create a flexible ROW obstruction fee to be assessed separately for local, collectors and arterial roadways/street corridors; by implementing a priority/standard plan review process with priority reviews being processed as an emergency review to be completed on the same day submitted. The flexible obstruction rates for priority/standard reviews clearly demonstrate that staff reduced level of efforts per category produced a significant fee reduction for crane operations performed within the public rights of way. In the "Glitch Bill" amending the original fee schedule, Public Works has proposed charging for ROW based on the corridor classification (local, collector, arterial) and whether the review is propriety or standard. This is a standard structure for Public Works and MAXIMUS Consulting Services, Inc. -7 - 21 City oj1tliami Beach, Florida Buildillg Developmellt Services-Review of Implemeutatioll of Fee Stm{v lttlay 2011 MAXIM US supports this change. This change also makes it easier for Public Works to provide labor based justifications for their fees. HIGH-RISE PERMITS In 2009, MAXIM US worked with City staff to gain an understanding of labor efforts for each service. We ask City staff to decompose their work into steps and will estimate the time required for each step. Since it is not feasible to ask how long the City spends with intake, plan review, and inspection for each occupancy type and each size project within each occupancy type, we make some simplifying assumptions. • For certain permit types, we asked questions about effort level differences for projects of different sizes in a single occupancy type. For example, we asked staff how long it took to provide a group of services for the following sized businesses. Related Standard IBC BUilding Use Occupanc Class e. ., IBCIFBC Occu anc Size s B Business 500 " complete all lines-commercial Scaling 2500 .. complete allllnes-Commercia/.Scal/ng 5.000 .. complete al/llnes--commercial Scaling 10000 " complete aflllnes-Commercial Scaling 25,000 " complete allllnes--commerclal Scallng 50,000 B Business-High Rise <50,000 sf 25,000 B Business-High Rise 50,000 sf to 100,000 sf 75,000 B Business-High Rise >100,000 sf 150,000 • The City's answers about how much longer it takes to serve a larger-sized project within these key occupancy types represent a percentage difference that we can apply to related occupancy types. The standard MAXIM US Nexus model contains an occupancy category for business and business high-rise (as seen above). However, MAXIMUS confirmed that the labor required to provide a business permit and a business high=rise permit were sufficiently similar to combine the two categories. In addition, the City grouped occupancy types where the cost per square foot for permits greater than 50,000 was similar. On average, it always requires more time to permit a larger building. As a result, the cost of a larger project should be more than a smaller sized permit of the same occupancy type. However, the cost for square foot actually decreases. The City has taken this unique aspect into consideration when developing their fees. Many cities, especially those that have not based their fee structure on an activity-based costing study, do not take this into consideration. MAXI MUS Consulting Services, Inc. -8- 22 Ci(l' r?f'Miami Beach, F1orida Building De1•e!opment Service.'i-Review r~f'lmplemellfatiou r~l Fee Stut~V May2011 Staff spent significant time deciding that this was the best solution. Unless the underlying facts have changed -and we have not seen evidence of this -we recommend no change to the structure of the 2009 report on this point. PUBLIC WORKS REVENUE FY20071\J8 2009 Ma~mus Study 2011 Rovmw Percent Cost Recovery Percent Cost Actual Total MAXIMUS based on r-Y T a tal MAXIMU S RecO\'OfYW!Ih Revenue Esurna:ed Full 2007108 Projected Revenue Adopted March 2010 · Est:mawd Cost Percent Cos! TOT ''L REVENUE 1\ctuat Rovanues Cost Rovonues wilh Adopted t:ees Fees Feb20!1 forFY2010/t 1 Recovery PUBLIC VVORKS (Eng,neenng) 1\nnual Revenue $650.448 $1,313.507 $ t' t84.707 5599,599 s 1,090,211 Monthly Awrage S54.20tl 5109,459 50(YG $96.726 90% $49,967 s 90,851 55''/o Potential New R!es (General Amd)· Not Implemented Coastal Re"ew 15.461 S IJ,290 fsaw'aiCapaCity-----------t---·----···-·---·· ·· --------------!---·-··-· +-- CerHf!calion Letter Appllcallon Backnow Annual lnspecuon Perm11 {Fire ~::ppresS!Cn Feel Annual Revenue Mjusted $650,448 $54,204 185.528 15·1.607 $957,911 S79,826 68°1\1 180.000 154,000 $837,417 S599,599 s 795,066 $59,785 87% $49,967 s 66,256 75t:.'o Based on our initial review. it appeared as if Public Works was only recovering 55% of costs, while most other departments were recovering closer to 75%. The main reason for this difference is that our analysis included three new potential fee categories that were not implemented. Excluding these, Public Works actually recovered 75% of cost. In addition, the Public Works department has continued to see a decline in permit activity. This is the main reason Public Works less than 100%, of cost. In 2008, Public Works performed 936 right-of-way permits. In 2011 the annualized number is projected to be 638, which is a 68% decline in permit volume. MAXIM US Consulting Services. Inc. -9- 23 ~ ~ To t a l Ad d i t i o n a l Pu b l i c Su b s i d y Ad d i t i o n a l Pl a n n m g Su b s i d y Ad d i t i o n a l Pu b l i c Wo r k s Su b s i d y Re v e n u e Co m p a r i s o n Cu r r e n t Re v e n u e (B u i l d i n g , Fi r e , Pl a n n i n g , Pu b l i c Wo r k s ) $ 3, 9 0 6 , 6 5 1 Pr e d i c t e d Re v e n u e (w / up d a t e d la b o r an d di s c o u n t s ) $ 3, 4 1 3 , 2 1 4 $ (4 9 3 , 4 3 7 ) $ (4 1 2 , 2 7 3 ) $ (8 1 , 1 6 4 ) ~ U' l Pu b l i c Pu b l i c Bu i l d i n g Bu i l d i n g Fi r e Fi r e Pl a n n i n g P l a n n i n g Wo r k s Wo r k s Total Total Cu r r e n t Pr o p o s e d Cu r r e n t Pr o p o s e d Cu r r e n t Pr o p o s e d Cu r r e n t Pr o p o s e d Current Proposed Total ~ Fe e Fe e Di f f e r e n c e Fe e F e e Di f f e r e n c e Fe e F e e Di f f e r g n c e Fe e F e e Di f f e r e n c e Fee Fee Difference Ge n e r a t o r - S i n g l e Fa m i l y $ 37 7 . 0 0 $ 15 1 . 0 0 $ (2 2 6 . 0 0 ) $ $ $ - $ 12 3 . 0 0 $ 49 . 0 0 $ (7 4 . 0 0 ) $ $ $ $ 500.00 $ 200.00 $ (300.00) Ge n e r a t o r ~ C o m m e r c i a l Un d e r 10 , 0 0 0 sq It or no n - l i f e sa f e t y re l a t e d ge n e r a t o r $ 2, 3 9 2 . 0 0 $ 1, 1 9 6 . 0 0 $ (1 , 1 9 6 . 0 0 ) $ 26 2 . 0 0 $ 13 1 . 0 0 $ (1 3 1 . 0 0 ) $ 34 6 . 0 0 $ 17 3 . 0 0 $ (1 7 3 . 0 0 ) $ $ $ $ 3,000.00 $ 1,500.00 $ (1 ,500.00) 10 , 0 0 0 to 50 , 0 0 0 sq ft $ 2, 9 8 3 . 0 0 $ 1, 4 9 2 . 0 0 $ (1 , 4 9 1 . 0 0 ) $ 50 1 . 0 0 $ 25 1 . 0 0 $ (2 5 0 . 0 0 ) $ 34 6 . 0 0 $ 17 3 . 0 0 $ (1 7 3 . 0 0 ) $ $ $ $ 3,830.00 $ 1,916.00 $ (1,914.00) Ab o v e 50 , 0 0 0 sq It $ 3, 1 9 0 . 0 0 $ 1, 7 8 4 . 0 0 $ (1 ,4 0 6 . 0 0 ) $ 81 0 . 0 0 $ 45 3 . 0 0 $ (3 5 7 . 0 0 ) $ 34 6 . 0 0 $ 19 4 . 0 0 $ (1 5 2 . 0 0 ) $ $ $ $ 4,346.00 $ 2,431.00 $ (1,915.00) So l a r ( P h o t o v o l t a i c ) / A l t e r n a t e Po w e r Sy s t e m s - S i n g l e fa m i l y $ 48 9 . 0 0 $ 24 5 . 0 0 $ (2 4 4 . 0 0 ) $ $ - $ $ 11 . 0 0 $ 6. 0 0 $ (5 . 0 0 ) $ - $ $ $ 500.00 $ 251.00 $ (249.00) Sy s t e m s - C o m m e r c i a l / M u l t i - f a m i l y $ 1, 8 9 9 . 0 0 $ 95 0 . 0 0 $ (9 4 9 . 0 0 ) $ $ $ - $ 21 . 0 0 $ 11 . 0 0 $ (1 0 . 0 0 ) $ $ - $ I $ 1,92o.oo $ 961.00 $ (959.00) Tr a n s f e r Sw i t c h fo r Fu t u r e Ge n e r a t o r ( p e r un i t ) $ 29 1 . 0 0 $ 14 6 . 0 0 $ (1 4 5 . 0 0 ) $ $ $ $ 9. 0 0 $ 5. 0 0 $ (4 . 0 0 ) $ $ $ $ 300.00 $ 151.00 $ (149.00) Pa i n t i n g Pe r m i t Re s i d e n t i a l $ 35 . 0 0 $ 27 . 0 0 $ (8 . 0 0 ) $ $ $ $ 65 . 0 0 $ 65 . 0 0 $ I $ $ $ - $ 100.00 $ 92.00 $ (8.00) Co m m e r c i a l $ 11 5 . 0 0 $ 27 . 0 0 $ (8 8 . 0 0 ) $ $ $ $ 10 9 . 0 0 $ 10 9 . 0 0 $ $ 26 . 0 0 $ 26 . 0 0 $ $ 250.00 $ 162.00 $ (88.00) Pl u m b i n g Fi x t u r e s Fi x t u r e Ro u g h , u n d e r 5 un i t s $ 20 0 . 0 0 $ 10 0 . 0 0 $ (1 0 0 . 0 0 ) $ $ $ $ $ $ $ $ - $ $ 200.00 $ 100.00 $ (100.00) Fi x t u r e Se t s re p l a c e m e n t , Up to 5 un i t s $ 14 3 . 0 0 $ 10 0 . 0 0 $ (4 3 . 0 0 ) $ $ $ $ $ $ $ $ $ $ 143.00 $ 100.00 $ (43.00) In s t a l l a t i o n of tr a c t i o n el e v a t o r s an d es c a l a t o r s , pe r un i t . Ea c h ad d i t i o n a l st o r y ov e r 10 $ 15 4 . 0 0 $ 84 . 0 0 $ (7 0 . 0 0 ) $ $ $ $ $ $ $ - $ $ $ 154.00 $ 84.00 $ (70.00) El e v a t o r Re p a i r s (J a c k / O i l li n e s ) $ 51 9 . 0 0 $ 25 0 . 0 0 $ (2 6 9 . 0 0 ) $ $ $ $ $ $ $ $ - $ $ 519.00 $ 250.00 $ (269.00) El e v a t o r Re p a i r s (C a n In t e r i o r / Ot h e r s ) $ 29 1 . 0 0 $ 25 0 . 0 0 $ (4 1 . 0 0 ) $ $ $ -. $ $ $ $ $ $ $ 291.00 $ 250.00 $ (41.00) Pa r t i a l De m o l i t i o n Un d e r 30 0 sq ft $ 71 1 . 0 0 $ 22 8 . 0 0 $ (4 8 3 . 0 0 ) 1 1 $ 73 . 0 0 $ 23 . 0 0 $ (5 0 . 0 0 ) $ 50 . 0 0 $ 16 . 0 0 $ (3 4 . 0 0 ) 1 1 $ $ $ - $ 834.00 $ 267.00 $ (567.00) 30 0 - 1 00 0 sq ft $ 71 1 . 0 0 $ 71 1 . 0 0 $ - I I $ 73 . 0 0 $ 73 . 0 0 $ $ 50 . 0 0 $ 50 . 0 0 $ II $ 24 . o o $ 24 . 0 0 $ - $ 858.00 $ 858.00 $ Th e fo l l o w i n g ar e ot h e r pe r m i t ty p e s re c o m m e n d e d fo r fe e re d u c t i o n s . Th e To t a l Di f f e r e n c e in fe e s re f l e c t s th e mi n i m u m am o u n t o f sa v i n g s a cu s t o m e r ma y ex p e r i e n c e i f th e s e pr o p o s e d fees are adopted, as the basis fo r ca l c u l a t i o n is ch a n g i n g fr o m sq u a r e fo o t a g e to pe r un i t or vi c e ve r s a . Bu i l d i n g Si g n I Ea c h $ 14 2 . 0 0 $ 11 6 . 0 0 $ (2 6 . 0 0 ) $ $ $ $ 10 8 . 0 0 $ 10 8 . 0 0 $ I I $ $ $ - I I $ 250.00 $ 224.00 $ (26.00) Aw n i n g s , c a n o p i e s an d pa t i o co v e r s - Ne w Si n g l e Fa m i l y Ho m e (P e r Un i t ) $ 91 . 0 0 $ 15 0 . 0 0 $ 59 . 0 0 $ $ $ $ 81 . 0 0 $ $ (8 1 . 0 0 ) 1 1 $ 10 . 0 0 $ $ (1 0 . 0 0 ) 1 1 $ 182.00 $ 150.00 $ (32.00) Al l Ot h e r Oc c u p a n c i e s 1- 3 0 Un i t s $ 19 8 . 0 0 $ 14 6 . 0 0 $ (5 2 . 0 0 ) $ 98 . 0 0 $ 95 . 0 0 $ (3 . 0 0 ) $ 11 8 . 0 0 $ 10 8 . 0 0 $ (1 0 . 0 0 ) $ 25 . 0 0 $ - $ (2 5 0 0 ) 1 1 $ 439.00 $ 349.00 $ (90.00) Ea c h ad d i t i o n a l 10 un i t s ov e r 30 $ 49 3 . 0 0 $ 18 5 . 0 0 $ (3 0 8 . 0 0 ) $ 20 3 . 0 0 $ $ (2 0 3 . 0 0 ) $ 16 8 . 0 0 $ $ (1 6 8 . 0 0 ) $ 25 . 0 0 $ - $ (2 5 . 0 0 ) 1 1 $ 889.00 $ 185.00 $ (704.00) Th e fo l l o w i n g pe r m i t ty p e is re c o m m e n d e d fo r fe e re v i s i o n . Sa v i n g s wi l l be re a l i z e d fo r an y qu a n t i t y o f si g n s un d e r fo u r (4 ) si g n s . Ho w e v e r , in Fi s c a l Ye a r 20 1 1 / 2 0 1 2 , no pe r m i t ap p l i c a t i o n s have included more than three (3 ) si g n s . El e c t r i c Si g n On e El e c t r i c Si g n $ 24 7 . 0 0 $ 71 . 0 0 $ (1 7 6 . 0 0 ) $ $ - $ $ - $ 29 . 0 0 $ 29 . 0 0 $ - $ $ $ 247.00 $ 100.00 $ (147.00) 2- 5 El e c t r i c Si g n s $ 36 6 . 0 0 $ $ (3 6 6 . 0 0 ) $ $ $ - $ $ $ $ $ - $ $ 366.00 $ $ (366.00) Ea c h Ad d i t i o n a l Si g n ov e r 5 $ 47 . 0 0 $ $ (4 7 . 0 0 ) $ $ $ $ $ $ - $ $ $ $ 47.00 $ $ (47.00) Ea c h Ad d i t i o n a l Si g n ov e r 1 $ $ 71 . 0 0 $ 71 . 0 0 $ $ $ $ $ 29 . 0 0 $ 29 . 0 0 $ $ $ $ $ 100.00 $ 100.00 ----\\'"") "':>(. ?:" ~ r;-\'J ORDINANCES TO BE SUBMITTED 26 COMMISSION ITEM SUMMARY Condensed Title: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1) THE TENTATIVE AD VALOREM MILLAGE OF 6.1122 MILLS FOR GENERAL OPERATING PURPOSES, WHICH IS EIGHT AND EIGHT-TENTHS PERCENT (8.8%) MORE THAN THE "ROLLED-BACK" RATE OF 5.6184 MILLS; AND 2) THE DEBT SERVICE MILLAGE RATE OF 0.2568 MILLS; FURTHER SETIING THE SECOND PUBLIC HEARING TO CONSIDER THE MILLAGE RATE FOR FISCAL YEAR (FY) 2012/13, ON THURSDAY, SEPTEMBER 27, 2012 AT 5:01 P.M. Key Intended Outcome Supported: Minimize taxes; Control Costs of payroll including salary and fringes; ensure expenditure trends are sustainable over the long term; Improve the City's overall financial health and maintain overall bond rating; Increase community satisfaction with city services Supporting Data (Surveys, Environmental Scan, etc.): • Over the last several years, the City of Miami Beach has adopted budgets that provided tax and fee relief while at the same time providing improving services that address community priorities (e.g. public safety, cleanliness, landscaping and beautification, recreation and cultural arts programming, renewal and replacementfundingforour facilities, and building/development functions). In FY 2007/08 alone, the property tax rate declined by approximately 1.8 mills, with savings to the average property owner of over $400. In addition, in FY 2005/06 and FY 2006/07, the City funded $200 and $300 "homeowner dividends" paid to homesteaded property owners in the City. • However, recent years have been very challenging due to declines in property values and increasing costs, particularly pension costs. Since FY 2007/08, property values have declined $3.8 billion to the July 1, 2012 certified taxable value, a reduction of approximately 14 percent, despite about $3 billion in new construction added to the roll. The July 1, 2012 Certification ofTaxable Value from the Miami-Dade County Property Appraiser reflects an increase of 5% in property values for the City as a whole, 5.4% in the RDA and 4.9% outside of the RDA. Issue: I Shall the Mayor and City Commission adopt the resolution? Item Summa /Recommendation: The total proposed tentative operating millage is Reduced from FY 2011/12 at 6.1122 mills, including a general operating millage rate of 6.0039 and a General Fund Capital Renewal and Replacement millage of 0.1083. The voted debt service millage rate is increased from 0.2884 to 0.2568. The proposed millage provides funding for a $1.1 million set aside for FY 2012/13 to offset the loss of a one-time carry forward of $2.1 million in FY 2011/12 pension credit savings in the General Fund to FY 2012/13. This is equivalent to 0.0585 mills. In addition, the millage provides funding for $3.5 million in service enhancements including Building Department staff due to increased demand, twelve Police Officers, additional Police overtime for homeless outreach, additional staffing for Police Records and Detention Center, increased internal controls, additional staff to manage a $2 million growth in lease revenues over the last three years, and $1.4 million transfer to capital pay-as- ou-o ro·ects. e uivalent to 0.1865 mills Advisory Board Recommendation: Financial Information: Source of Amount Account Funds: 1 I I 2 OBPI Total Financial Impact Summary: The combined millage rate overall remains approximately 2.3 mills lower than it was in FY 1999/00. In addition, the millage rate is approximately 1.3 mills lower than it was in FY 2006/07, when property values were similar to the July 1 , 2012 certified values resulting in a net tax le'!Y, reduction of ~27 million since FY 2006107. City Clerk's Office Legislative Tracking: MIAMI BEACH 27 AGENDA ITEM --::-R_7_A_I - DATE q-jZ-{2-- MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: FROM: Mayor Matti Herrera Bower and Members of the City Commission Kathie G. Brooks, Interim City Manager Jf' A, J-. September 12, 2012 DATE: SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1} THE TENTATIVE AD VALOREM MILLAGE OF 6.1122 MILLS FOR GENERAL OPERATING PURPOSES, WHICH IS EIGHT AND EIGHT-TENTHS PERCENT (8.8%} MORE THAN THE "ROLLED-BACK" RATE OF 5.6184 MILLS; AND 2} THE DEBT SERVICE MILLAGE RATE OF 0.2568 MILLS; FURTHER SETTING THE SECOND PUBLIC HEARING TO CONSIDER THE MILLAGE RATE FOR FISCAL YEAR (FY} 2012/13, ON THURSDAY, SEPTEMBER 27,2012 AT 5:01P.M. ADMINISTRATION RECOMMENDATION The Administration recommends that the City Commission adopt the attached Resolution which sets the following: 1) Proposed Millage Rates for FY 2011/12: General Operating 6.0039 mills Capital Renewal & Replacement 0.1083 mills Sub-Total Operating Millage 6.1122 mills (6.1655 FY 2011/12, 0.0533 decrease) Voted Debt Service 0.2568 mills (0.2884 FY 2011/12, 0.0316 decrease) Total 6.3690 mills (6.4539 FY 2011/12,0.0849 decrease) 2) The tentatively adopted combined millage rate of 6.3690 mills is 0.0849 mills less than the 6.4539 combined millage rate for FY 2011/12. The tentatively adopted operating millage of 6.1122 mills for FY 2012/13 is 0.4938 mills more than the roll-back rate of 5.6184, and thus, the City is required to publish a Notice of Tax Increase. 3) The second public hearing to consider the final millage rates and budgets for FY 2012/13 shall be on Thursday September 27, 2012 at 5:01 P.M., in the City Commission Chambers, City Hall, 1700 Convention Center Drive. The "Rolled-Back" millage rate for FY 2012/13 is the millage rate required to produce the same level of property tax revenues in the General Fund in FY 2012/13 as anticipated to be received in FY 2011/12. It is important to note, that the January 1, 2011 tax roll Citywide declined by $1.2 billion (5.6%) between the July 1, 2011 valuation and the July 1, 2012 valuation due to appeals, adjustments, etc, which is part of the reason the FY 2012/13 "roll-back rate" is dramatically lower than the FY 2011/12 current millage rate and lower than it would be if the rollback rate was only 28 FY 2012/13 Proposed Millage September 12, 2012 Page2 adjusted for the increase in revenues generated by higher property values. The area outside of City Center RDA, which impacts General Fund revenues, declined in value by almost $1 billion during the same period of time. The Administration is recommending a total combined millage rate for the City of Miami Beach of 6.3690. The total proposed operating millage decreases to 6.1122 mills, which includes a General Operating millage rate of 6.0039 and a General Fund Capital Renewal and Replacement millage of 0.1083. The proposed voted debt service millage rate is adjusted from 0.2884 to 0.2568, a decrease of 0.0316 mills. The proposed millage provides funding to partially offset increases in employee health and pension costs as well as funding approximately $3.5 million in enhancements. PROCEDURE Florida Statutes 200.065 requires that at the conclusion of the first public hearing on the proposed tax rate and budget, the City Commission proceed in the following specific manner: 1. Adopt a tentative ad valorem millage rate for FY 2012/13 operating purposes. This is accomplished by adopting a Resolution that includes the percentage increase or decrease over the "Rolled-back" rate; the required Debt Service millage rate; and, the date, time, and place of the second public hearing State statute requires that only the title be read aloud. 2. Adopt a tentative general operating budget for FY 2012/13. Also included, are budgets for the Enterprise and Internal Service Funds. This is accomplished by adopting a companion Resolution. (See accompanying City Budget Agenda Item). Both the millage and budget Resolutions must be adopted again after a second and final public hearing. SUMMARY In FY 2010/11 the city's approach to addressing the then deficit of $32 million included a distribution of the shortfall between taxpayers and employees. Taxpayers had their tax rate increased from 5.6555 to 6.2155, an increase of 0.56 mills. The goal of the Commission has been to bring them back to that level as property values increase over time. It should be remembered that between FY 2009/10 and FY 2010/11 values declined by $2.6 billion driving the need for an increase in the millage. FY 2012/13 values are still short of FY 2009/10 values by $1.6 billion. As values approach FY 2009/10 values, through further increases in the future, this will provide the opportunity for further reductions in the millage. In FY 2011/12 the City took its first step in that direction with a reduction in the millage rate of 0.05 mills. The proposed millage rate for FY 2012/13 reduces the operating millage by an additional 0.0533 mills and a total reduction of 0.0849 mills including the reduction in debt service millage. The total millage reduction over the two fiscal years is .0133 mills. Over two years, this reduction represents 18 percent of the goal to get back to a millage rate of 5.6555. 29 FY 2012/13 Proposed Millage September 12, 2012 Page 3 The proposed millage has been developed based on $2.6 million in givebacks in the General Fund to partially offset $5.7 million in pension and health increases. These givebacks will need to be negotiated with bargaining groups over the coming year. Further, the proposed millage incorporates a set aside of $1.1 million for FY 2013/14 to partially offset the loss of a $2 million one-time pension credit ($2.5 million citywide) in FY 2012/13 that will not be available for FY2013/14. Should this be used instead to further reduce the millage, it would result in a further reduction of .0585 mills. The Administration is recommending a total combined millage rate for the City of Miami Beach of 6.3690. The total proposed operating millage declines to 6.1122 mills, including a general operating millage rate of 6.0039 and a General Fund Capital Renewal and Replacement millage of 0.1083. The proposed voted debt service millage rate is adjusted from 0.2884 to 0.2568, a decrease of 0.0316 mills. It is important to remember that in prior years, the City of Miami Beach significantly reduced tax rates as property values increased. Between FY 1999/00 and FY 2009/10, total combined City of Miami Beach property tax rates declined approximately 2.8 mills. In FY 2007/08 alone, the millage rate declined by approximately 1.8 mills, with annual savings to the average homesteaded property of over $400. Further, despite an increase of 0.56 mills in the operating tax rate in FY 2010/11, City of Miami Beach proposed combined millage rates today remain more than 2.3 mills lower than in FY 1999/00 (25 percent), and approximately 1.3 mills lower than 2007/08 when property values were above today's values. ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH On July 1, 2012, the City received the "2012 Certification of Taxable Value" from the Property Appraiser's Office stating that the taxable value for the City of Miami Beach is $23,072,321 ,980 including $96,864,87 4 in new construction. The preliminary 2012 value represents an increase of$ 1.1 billion or 5.0 percent more than the July 1, 2011 Certification of Taxable Value of $21 ,978,289,928 , and an increase of 5.0 percent excluding new construction. The comparative assessed values for the Miami Beach Redevelopment Agency City Center redevelopment district increased from $3,423,353,944 to $3,608,718,451, an increase of $185,364,507, or a 5.4 percent increase in values over 2011 certified values. In addition, assessed values within the geographic area formerly known as the South Pointe redevelopment district increased from $3,446,036,913 to $3,618,097,360, an increase of $172,060,447, or a 5 percent increase in values over 2011 certified values. As a result, taxable values in the areas outside the City Center RDA/South Pointe area increased by 5 percent, from $15.1089 billion to $15.8455 billion, an increase of $0.7366 billion. Citywide values excluding City Center increased from $18.555 billion to $19.463 billion, an increase of $0.9086 billion or 4.9 percent. Values outside the City Center area determine General Fund revenues. 30 FY 2012/13 Proposed Millage September 12, 2012 Page4 COMPARATIVE ASSESSED VALUES (in billions) Jan. 1 2012 Value (in Jan. 1 2011 Value (in billions) billions) As of July 1 2011 Revised As of July 1 (For FY Value (For 2011 2011/12 FY 2011/12 Change in (For 2011/12 Budget) Projection) 2011 Values % Chg. Buqget) RDA -City Ctr $ 3.4233 $ 3.1299 $ (0.2934) -9% $ 3.6087 South Pointe * 3.4460 3.2393 (0.2067) -6% 3.6181 General Fund excl S.Pte 15.1090 14.3860 (0.7229) -5% 15.8455 Total Citywide $ 21.9783 $ 20.7552 $ (1.2231) -6% $ 23.0723 Citywide Net of City Ctr -5% $ 18.5550 $ 17.6253 $ (0.930 $ 19.4636 Change from 2011 Value (BudQet) $ (in billions) % Cl}g_ $ 0.1853 5.4% $ 0.1721 5.0% $ 0.7366 4.9% $ 1.0940 5.0% $ 0.9087 4.9% * Revised values for South Pointe not available, but are assumed to be impacted by the same percentage as citywide. DETERMINING THE OPERATING MILLAGE LEVY The first building block in developing a municipal budget is the establishment of the value of one mill of taxation, wherein the mill is defined as $1.00 of ad valorem tax for each $1,000 of property value. For the City of Miami Beach, this value for each mill is determined by the 2012 Certification of Taxable Value and has been set at $23,072,322. Florida Statutes permit a discount of up to five percent for early payment discounts, delinquencies, etc. Therefore, the 95 percent value of the mill is $21,918,706. However, net of City Center RDA tax increment which represents the amount available to the General Fund, the 95 percent value of the mill is $18,768,367,010. IMPACTS OF DECLINE IN PROPERTY VALUES In FY 2011/12, the operating millage rate for general City operations was adopted at 6.1655. Based on the July 1, 2012 Certification of Taxable Value, 6.1655 mills would generate approximately$ 135,139,781 in general tax revenues, an increase of $6,407,992 over FY 2011/12 budgeted property tax revenues Citywide (General Fund, City Center RDA and the South Pointe area). The General Fund property tax revenues will increase by $5.76 million, if the FY 2011/12 millage rate is maintained. Further, the January, 1 2011 tax roll Citywide declined by $1.2 billion between the July 1, 2011 valuation and the July 1, 2012 valuation due to appeals, adjustments, etc., which is part of the reason that the FY 2012/13 "roll-back rate" is significantly less than the FY 2011/12 current millage rate. The area outside of City Center RDA declined by almost $1 billion. Further, pursuant to recently enacted State legislation, the City may elect to approve millage rates above the roll-back rate up to the constitutional cap of 10 mills subject to the following votes by the Commission or referendum: • Option 1: A majority of the Commission is required to approve a millage up to 8.0844 (equivalent to 100.447% of prior year maximum ad valorem proceeds allowed by a majority 31 FY 2012/13 Proposed Millage September 12, 2012 Page 5 vote, net of the impact of the Tax Increment Districts). The adjustment of 100.447% reflects the statewide per capita personal income increase for the prior year • Option II: A two-thirds approval (5 of 7 votes) of the Commission is required to approve a millage up to 8.8928 (equivalent to a 10% increase in the ad valorem revenues above Option I). • Option Ill: A unanimous approval of the Commission or referendum is required to approve a millage above 8.8928 up to the 10 mill cap DETERMINING THE VOTED DEBT SERVICE MILLAGE LEVY The general obligation debt service payment for FY 2012/13 is approximately $5.9 million. Based on the July 1, 2012 Certified Taxable Value from the Property Appraiser, these bonds would require the levy of a voted debt service millage of 0.2568 mills. This represents a decrease of 0.0316 mills. OPTIONS FOR REDUCING THE MILLAGE An analysis was performed to determine what the impact on property tax revenue would be with differing levels of millage reduction. The following table illustrates the corresponding millage rate for several scenarios: Scenario one reduces the additional property tax revenue by $1 million, reduces the overall millage by approximately 0.5 mills. Impact To General Average Fund Renewal & Operating Debt Total Change In Homestead Millage Replmnt Millage Millage Millage Total Millage ed Rate Rate Rate Rate Rate Rate Property Decrease of $1 million from revenue at current millage rate 6.0039 0.1083 6.0622 0.2568 6.3190 (0.05) (30) State Defined Rollback rate 5.5101 0.1083 5.6184 0.2568 5.8752 (0.58) (157) The recommendation is to initially reduce the millage rate in accordance with Scenario one, which reduces the millage rate by .0849 with the possibility of further millage rate reductions to be determined before the budget is adopted. COMBINING THE OPERATING AND VOTED DEBT SERVICE MILLAGE LEVIES Illustrated below is a comparison of the combined millage rates and ad valorem revenues to the City of Miami Beach for FY 2011/12 (final) and FY 2012/13 (preliminary) including RDA. It is recommended that in the General Fund, 0.1083 mills of the total operating millage continue to be dedicated to renewal and replacement, resulting in approximately $1.86 million in renewal and replacement funding. ! o/olnc/(Dec) From From FY City of Miami Beach Millage Rates FY06/07 FY 11/12 FY 12/13 lnc/(Dec) FY11/12 i 06/07 ' Operating 7.1920 6.0572 6.0039 -0.0533 Capital Renewal & Replacement ' 0.1820 0.1083 0.1083' 0.0000 Sub-total Operating Millage 7.3740 6.1655 6.1122;' -0.0533 -0.9% -17% Debt Sei".Ace 0.2990 0.2884 0.2568 -0.0316 Total 7.6730 6.4539 6.3690 -0.0849 -1.3%, -17% 32 FY 2012/13 Proposed Millage September 12, 2012 Page6 lfthe proposed millage rates are tentatively adopted, then the City of Miami Beach's total operating millage will decrease by .0533 from the current year, and the voted debt service millage will decrease by 0.0316 mills. IMPACT OF PROPOSED MILLAGE ON PROPERTY OWNERS Homesteaded Properties Amendment 10 to the State Constitution took effect on January 1, 1995 and limited the increase in assessed value of homesteaded property to the percentage increase in the consumer price index (CPI) or three percent (3%), whichever is less. For 2011, the CPI has been determined to be 3.2 percent and therefore, the increase is capped at 3% for increased values as of January 1, 2012. Overall, based on an analysis of the homesteaded properties in the 2010 tax roll (the latest available from the Miami-Dade County Property Appraiser at this time), the median value of homesteaded property in Miami Beach for 2012 (as of August 2011) was $119,461, and the average $277,201. Applying the increase to the market value of all existing homesteaded properties from the 2011 tax roll, and the 3 percent CPI adjustment, the impact of the millage rate adjustment to homesteaded properties would be as shown in the following table. Homesteaded Properties FY 2011/12 (as of .January 1 2011)* with 3%CPI Median Average Median Average Taxable Value $ 119,461 $ 277,201 $ 123,045 $ 285,517 City of Miami Beach Taxes Operating $ 737 $ 1,709 $ 752 $ 1,745 Voted Debt 34 71 32 73 Total Miami Beach $ 771 $ 1,780 $ 784 $ 1,818 $ Change in Taxes Operating $ 15 $ 36 Voted Debt (2) 2 Total Miami Beach $ 13 $ 38 *Source: Miami-Dade County Property Appraiser File as of 8/17/10 Non-Homesteaded Properties It is anticipated that, overall commercial properties, would reflect an increase based on the overall increase in the property values, although individual properties could vary significantly. Historical Perspective It is important to remember that in prior years, the City of Miami Beach significantly reduced tax rates as property values increased. Between FY 1999/00 and FY 2009/10, property tax rates declined approximately 2.8 mills. In FY 2007/08 alone, the property tax rate declined by approximately 1.8 mills, with annual savings to the average homesteaded property of over $400. In addition, in FY 2005/06 and FY 2006/07, the City funded $200 and $300 homeowner dividends paid to homesteaded property owners in the City. 33 FY 2012/13 Proposed Millage September 12, 2012 Page 7 Cl ... en CIO ,... Q) 10 Cl II) Jg :f o::r M N ... Cl Total Combined Millage Millage Rate T T T T T 98 99 '00 '01 '02 '03 '04 'OS '06 '07 '08 '09 '10 11 12 13 Fiscal Years The combined millage rate overall remains approximately 2.3 mills lower than it was in FY 1999/00. In addition, the millage rate is almost 1.3 mills lower than it was in FY 2006/07, when property values were above the July 1, 2012 certified values. As a result, the proposed property tax levy is lower in FY 2012/13 than it was in FY 2006/07. Property Values and Tax Levy en 250 30 'U c §l ..., ~ 200 0 'C (!) >. ..., > 150 20-< Ql ~ ...J X c ro 100 (!) 1-10 ~ 'C Ql 50 ~ c :.0 ()" E ~ 0 0 0 ~ 0 '07 '08 '09 '10 '11 '12 '13 f!&nw::ml Property Values --11-Tax Levy including Debt 34 FY 2012/13 Proposed Millage September 12, 2012 PageS Property Value, Millage and Property Tax Levy Millage Rates Final/ Taxable Revised Property Taxable Total General Values Value Citywide Fund/RDA Budget Year (billions) (billions) Millage Millage FY1997/98 $ 6.46 $ 6.40 9.2100 7.4990 FY1998/99 6.97 $ 6.87 8.9830 7.4990 FY1999/00 7.66 $ 7.54 8.6980 7.4990 FY2000/01 8.37 $ 8.22 8.5550 7.3990 FY2001/02 9.40 $ 9.22 8.3760 7.2990 FY2002/03 10.56 $ 10.41 8.3220 7.2990 FY2003/04 12.09 $ 11.85 8.1730 7.2990 FY2004/05 14.04 $ 13.86 8.1730 7.4250 FY2005/06 17.45 $ 17.15 8.0730 7.4810 FY2006/07 22.74 $ 22.26 7.6730 7.3740 FY2007/08 26.85 $ 26.14 5.8970 5.6555 FY2008/09 26.90 $ 25.89 5.8930 5.6555 FY2009/10 24.70 $ 23.24 5.9123 5.6555 FY2010/11 22.10 $ 20.97 6.5025 6.2155 FY2011/12 21.98 $ 20.76 6.4539 6.1655 FY2012/13 23.10 6.3690 6.1122 Tax levy (in millions) General Fund Total (including 5. Total Pointe, and including Renewal & Debt Replcmnt) $ 57.45 $ 46.78 $ 60.37 $ 44.66 $ 64.29 $ 47.36 $ 69.08 $ 49.75 $ 75.97 $ 54.37 $ 84.81 $ 61.05 $ 95.39 $ 68.17 $ 110.74 $ 79.38 $ 135.91 $ 111.69 $ 168.38 $ 140.31 $ 150.42 $ 125.33 $ 150.59 $ 125.94 $ 138.70 $ 115.73 $ 136.55 $ 112.14 $ 135.80 $ 111.29 $ 140.91 $ 114.72 The final millage column contains final property values except for FY 2011/12 which is not finalized yet. Overlapping Jurisdictional Operating and Debt Service Millage Levies City of Miami Beach property owners must also pay property taxes to Miami-Dade County, the Miami-Dade County School Board, the Children's Trust, the South Florida Water Management District, and the Florida Inland Navigation District. The countywide tax rate for Miami-Dade County is proposed to decrease from 4.8050 mills to 4. 7035 mills; the library tax rate is proposed to decrease from 0.1795 mills to 0.1725 mills; and the debt service millage stayed the same at 0.2850. The proposed tax rate for the Miami-Dade School District is 8.0050; 0.2440 mills less than the prior year millage of 8.2490. The Children's Trust millage is maintained at 0.5 mills. The proposed tax rate for the South Florida Water Management District is 0.4289; which is the same as the current year. The proposed tax rate for the Florida Inland Navigation District is 0.0345; unchanged from the FY 2011/12 millage. 35 FY 2012/13 Proposed Millage September 12, 2012 Page 9 A summary of the tax rate changes is provided in the following table. OVERLAPPING TAX MILLAGE FY06/07 FY 11/12 FY 12/13 City of Miami Beach Millage Rates Operating 7.1920 6.0572 6.0039 Capital Renewal & Replacement 0.1820 0.1083 0.1083 Subtotal Operating Millage 7.3740 6.1655 6.1122 Voted Debt Sefl..ice 0.2990 0.2884 0.2568 Total 7.6730 6.4539 6.3690 Miami Dade County Countywide 5.6150 4.8050 4.7035 Library 0.4860 0.1795 0.1725 Debt Service 0.2850 0.2850 0.2850 Subtotal 6.3860 5.2695 5.1610 School Board 8.1050 8.0050 8.0040 Children's Trust 0.4220 0.5000 0.5000 Other 0.7360 0.4708 0.4634 Total 23.3220 20.6992 20.4974 Variance Variance from 11/12 from 06/07 -0.0533 -1.1881 0.0000 -0.0737 ..0.0533 -1.2618 -0.0316 -0.0422 ..0.0849 -1.3040 -0.1015 -0.9115 -0.0070 -0.3135 0.0000 0.0000 -0.1085 -1.2250 ..0.0010 ..0.1010 0.0000 0.0780 -0.0074 -0.2726 ..0.2018 -2.8246 With the Proposed millage rates for FY 2012/13, the Miami Beach portion of the FY 2012/13 tax bill is approximately 31 percent of the total bill. Of note. even with the recently proposed millage decreases by the County, the County millage is 1. 2 mills less than their millage in FY 2006/07, as compared to the City's proposed millage which is 1. 3 mills less than the City millage in FY 2006/07. Further, the School Board millage is only minimally below the FY 2006/07 millage rate, despite the recently proposed decrease. The significant difference in the total overlapping millage rate is a direct result of the City's effort to keep the millage rates as low as possible. Impact of Combined Tax Rates of Overlapping Jurisdictions on Homesteaded Properties Applying the proposed millage rates to the median and average January 1, 2011 taxable values of $119,461 and $277,201, respectively, half of the homesteaded properties would pay less than $2,478 for all taxing jurisdictions combined, while the average taxes generated would be approximately $5,753 per homesteaded property. Of these taxing jurisdictions, the highest component is the Miami-Dade School Board, at $956 for a median value property, and $2,219 for an average valued property. 36 FY 2012/13 Proposed Millage September 12, 2012 Page 10 The following table provides examples of changes in property taxes for homesteaded properties as a result of these declines in values, using the proposed tax rates and potential changes from 201 0 values. Impact on Homesteaded Properties Assuming Changes in Taxable Value FY 2011/12 (as of January 1 FY 2012/13 2011)* with 3% CPI Median I Average Median I Average 2010 Taxable Value $ 119,461 $ 277,201 $ 123,045 $ 285,517 City of Miami Beach Operating $ 743 $ 1,723 $ 752 $ 1,745 Voted Debt $ 34 $ 80 $ 32 73 Total Miami Beach $ 777 $ 1,802 $ 784 $ 1,818 Miami Dade County $ 735 $ 1,707 $ 635 $ 1,473 Schools $ 985 $ 2,287 $ 984 $ 2,284 Other $ 138 $ 321 $ 119 $ 275 Total $ 2,635 $ 6,117 $ 2,522 $ 5,850 Change in Taxes City of Miami Beach Operating $ 9 $ 22 Voted Debt $ (2) $ _(7 Total Miami Beach $ 7 $ 16 Miami Dade County $ (100) $ (234) Schools $ (1) $ (3) Other $ (19) $ (46) Total $ (113) $ (267 As with the City of Miami Beach millage rates, impacts of the combined jurisdictional millage rates for non-homesteaded properties will likely reflect declines in property values, although individual properties may vary. SECOND PUBLIC HEARING The second public hearing on the tentatively adopted millage rate and budget for FY 2012/13 must be advertised no later than 15 days after the first public hearing. It is recommended that the second public hearing be set for Thursday, September 27, 2012 at 5:01 P.M., in the City Commission Chambers, City Hall, 1700 Convention Center Drive. CONCLUSION The Administration recommends adoption of the attached Resolution which sets both tentative operating and debt service millage rates for FY 2012/13 and establishes a second public hearing to be held on Thursday, September 27, 2012, at 5:01 P.M. KGB:TF 37 RESOLUTION NO. ___ _ A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1) THE TENTATIVE AD VALOREM MILLAGE OF 6.1122 MILLS FOR GENERAL OPERATING PURPOSES, WHICH IS EIGHT AND EIGHT-TENTHS PERCENT (8.8%) MORE THAN THE "ROLLED-BACK" RATE OF 5.6184 MILLS; AND 2) THE DEBT SERVICE MILLAGE RATE OF 0.2568 MILLS; FURTHER SETTING THE SECOND PUBLIC HEARING TO CONSIDER THE MILLAGE RATE FOR FISCAL YEAR {FY) 2012/13, ON THURSDAY, SEPTEMBER 27,2012 AT 5:01P.M. WHEREAS, the City of Miami Beach significantly reduced tax rates as property values increased. Between FY 1999/00 and FY 2011/12, total combined City of Miami Beach property tax rates declined approximately 2.2 mills despite an increase of 0.56 mills in FY 2010/11; and WHEREAS, In FY 2007/08 alone, the millage rate declined by approximately 1.8 mills, with annual savings to the average homesteaded property of over $400; and WHEREAS, City of Miami Beach combined millage rates remain approximately 2.3 mills lower than in FY 1999/00 (25 percent), and approximately 1.3 mills lower than 2006/07 when property values were similar to today's values, resulting in a net tax levy reduction of approximately $27 million; and WHEREAS, the administration is continuing to evaluate opportunities to further reduce the millage, and WHEREAS, on July 18, 2012, the City Commission following a duly noticed public hearing, adopted Resolution No. 2012-27960, which set the proposed general operating millage rates at 6.1122 mills (excluding debt service), a reduction of .0533 mills from the FY 2011/12 rate for general operating purposes, and 0.2568 mills for debt service; and WHEREAS, Section 200.065, Florida Statutes, requires that at the conclusion of the first public hearing on the City's proposed tax rate and budget, the City Commission: 1) adopt a tentative ad valorem millage rate for FY 2012/13 operating purposes; and 2) the required Debt Service millage rate; this is accomplished by adopting a Resolution that includes the percentage increase or decrease over the "rolled-back" rate; and WHEREAS, at this time the Administration would recommend that the City Commission set the second and final public hearing to consider the aforestated millage rates for FY 2012/13. 38 NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, as follows: (1) Pursuant to Section 200.065, Florida Statutes, there is hereby levied a tax for FY 2011/12, on all taxable and non-exempt real and personal property located within the corporate limits of the City of Miami Beach, Florida, as follows: {a) For the purpose of operating the government of the City, the rate assigned amounts to 6.1122 mills. Also included are appropriate reserves and contingencies, which are not limited to reserves for tax discounts and abatements of uncollected taxes. The millage rate reflected is eight and eight-tenths percent (8.8%) more than the "Rolled-back" rate of 5.6184 mills. {b) For the purpose of providing payment on the principal and interest portions of the General Obligation Bond Debt outstanding, the rate assigned amounts to 0.2568 mills. (2) The tentative adopted millage rates for the City of Miami Beach, Florida for FY 2012/13 are subject to a second and final public hearing, herein set for and to be held at 5:01 p.m., Thursday, September 27, 2012, in the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida. PASSED and ADOPTED this 12th day of September, 2012. ATTEST: CITY CLERK 39 MAYOR APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION ~ 0 16 N E I TH U R S D A Y , AU G U S T 23 , 20 1 2 NE --- - - .. ·· - ~ " -· .. - . -- - - . - · - ~ · - · · · · · · - - · · ··- ·- __ ,. ·- . -- ~ - · - - - - - · · .. . . . ·- - - - - MI A M I BE A C H CI T Y OF MI A M I BE A C H NO T I C E OF PU B L I C HE A R I N G S Mi a m i H e r a l d . c o m I THE MIAMI HERALD NO T I C E IS HE R E B Y gi v e n th a t pu b l i c he a r i n g s wi l l be he l d by th e Ma y o r an d Ci t y Co m m i s s i o n of th e Ci t y of Mi a m i Be a c h , Fl o r i d a , in th e Co m m i s s i o n Ch a m b e r s , 3r d Fl o o r , Ci t y Ha l l , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , Mi a m i Be a c h , Fl o r i d a , on We d n e s d a y , Se p t e m b e r 12 , 20 1 2 , to co n s i d e r th e fo l l o w i n g : 5: 0 1 p . m . , TH E FI R S T PU B L I C HE A R I N G AD O P T I N G TH E PR O P O S E D MI L L A G E RA T E S AN D BU D G E T S FO R FI S C A L YE A R 20 1 2 / 2 0 1 3 FO R TH E CI T Y OF MI A M I BE A C H . 5: 0 2 p . m . TH E FI R S T PU B L I C HE A R I N G AD O P T I N G TH E PR O P O S E D MI L L A G E RA T E AN D BU D G E T FO R FI S C A L YE A R 20 1 2 / 2 0 1 3 FO R JH E NO R M A N D Y SH O R E S LO C A L GO V E R N M E N T NE I G H B O R H O O D IM P R O V E M E N T DI S T R I C T . In q u i r i e s ma y be di r e c t e d t o th e Of f i c e of Bu d g e t <3 _ n d Pe r f o r m a n c e Im p r o v e m e n t (3 0 5 ) 67 3 - 7 5 1 0 . IN T E R E S T E D PA R T I E S ar e · in v i t e d to ap p e a r at th i s me e t i n g , or be re p r e s e n t e d by an ag e n t , or ·t o ex p r e s s th e i r vi e w s in wr i t i n g ad d r e s s e d ~o th e Ci t y Co m m i s s i o n , c/ o th e Ci t y Cl e r k , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , 1s t Fl o o r , Ci t y Ha l l , Mi a m i Be a c h , Fl o r i d a 33 1 3 9 . Co p i e s of th e § e it e m s ar e av a i l a b l e fo r pu b l i c in s p e c t i o n du r i n g no r m a l ·b u s i n e s s ho u r s in th e Ci t y Cl e r k ' s Of f i c e , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , 1s t . Fl o o r , Ci t y Ha l l , Mi a m i Be a c h , Fl o r i d a 33 1 3 9 . Th i s me e t i n g ma y be co n t i n u e d , an d un d e r su c h ci r c u m s t a n c e s ad d i t i o n a l le g a l no t i c e wi l l no t be pr o v i d e d . Ra f a e l E. Gr a n a d o , Ci t y Cl e r k Ci t y of Mi a m i Be a c h Pu r s u a n t to Se c t i o n 28 6 . 0 1 0 5 , Fl a . St a t . , th e Ci t y he r e b y ad v i s e s th e pu b l i c th a t : if a pe r s o n de c i d e s to ap p e a l an y de c i s i o n ma d e by th e Ci t y Co m m i s s i o n wi t h re s p e c t to an y ma t t e r co n s i d e r e d at it s me e t i n g or it s he a r i n g , -s u c h pe r s o n mu s t en s u r e th a t a ve r b a t i m re c o r d of th e pr o c e e d i n g s is ma d e , wh i c h re c o r d in c l u d e s th e te s t i m o n y an d ev i d e n c e up o n wh i c h th e ap p e a l is to be ba s e d . Th i s no t i c e do e s no t co n s t i t u t e co n s e n t by th e Ci t y fo r th e in t r o d u c t i o n or ad m i s s i o n of ot h e r w i s e in a d m i s s i b l e or ir r e l e v a n t ev i d e n c e , no r do e s it au t h o r i z e ch a l l e n g e s or ap p e a l s no t ot h e r w i s e al l o w e d by la w . To re q u e s t th i s ma t e r i a l in ac c e s s i b l e fo r m a t , si g n la n g u a g e in t e r p r e t e r s , in f u r m a t i o n on ac c e s s fo r pe r s o n s wi t h di s a b i l i t i e s , an d / o r an y ac c o m m o d a t i o n to re v i e w an y do c u m e n t or pa r t i c i p a t e in an y Ci t y - s p o n s o r e d pr o c e e d i n g . pl e a s e co n t a c t us fi v e da y s in ad v a n c e at (3 0 5 ) 67 3 - 7 41 1 (v o i c e ) or TT Y us e r s ma y al s o · c a l l th e Fl o r i d a Re l a y Se r v i c e at 71 1 . Ad #7 2 5 :~~ 1 " " ; ' 1 " ' r.'"i ' ~ ~ - \ " I l i ? f > ! ' ~ ' COMMISSION ITEM SUMMARY Condensed Title: A resolution of the Mayor and City Commission of the City Of Miami Beach, Florida, adopting tentative budgets for the General, G.O. Debt Service, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal Year 2012/13 subject to a second public hearing scheduled on Thursday, September 27, 2012 at 5:01 P.M. Key Intended Outcome Supported: Minimize taxes; Control Costs of payroll including salary and fringes; Ensure expenditure trends are sustainable over the long term; Improve the City's overall financial health and maintain overall bond rating; Increase community satisfaction with city services Supporting Data (Surveys, Environmental Scan, etc.): The 2012 results continue to show the community has a very favorable view of the City as an 'excellent' or 'good' place to live and 89% reported their overall quality of life within the City as either 'excellent' or 'good' and 80% reported their standard of living as good and improving compared to 53% in 2009. The City remained stable in most of the areas measured. Residential respondents provided the highest positive ratings for the appearance and maintenance of the city's public buildings and public schools, and the appearance of playgrounds and recreational programs. In addition, residents continue to provide positive ratings for areas such as safety during the day/evening and services from Fire, EMS and Ocean Rescue/Beach Patrol. Businesses continue to rate the City of Miami Beach as 'one of the best' or an 'above average place' to run a business. Improvement was seen in rating the City of Miami Beach as a place to run a business compared to past years with over 80% indicating business was improving compared to 49% in 2009. Business ratings showed the highest positive ratings for the overall quality of the beaches, the maintenance of parks, the appearance and maintenance of the city's public buildings, and landscape maintenance in rights of way and public places. Also, the majority of the businesses reported being 'very satisfied' or 'somewhat satisfied' with the City's website overall. The survey also identified areas where the City could improve. Foremost among these were storm drainage, traffic, homelessness, parking, and management of special events, are areas that received comparatively low ratings in the residential survey. Business owners rated storm drainage, public transportation, parking, experience with the building department, and traffic low comparatively low. Issue: Shall the Mayor and City Commission adopt the attached resolution establishing the tentative budgets above and settin the date for the second ublic hearin ? Item Summary/Recommendation: Advisory Board Recommendation: Financial Information: Source of Amount Account Funds: 1 $256,975,000 General Fund Operating D 2 $ 5,928,000 G.O. Debt Service 3 $ 17,385,000 RDA Funds-Ad Valorem Taxes 4 $161,088,000 Enterprise Funds Total $441 ,376,000 *Net of Internal Service Funds OBPI $ 59,328,000 Internal Service Funds Financial Impact Summary: This budget represents more than $70 million in predominantly recurring reductions over the last 6 years, and the General Fund Operating budget is $12.6 million (8 percent) more than in FY 2006/07, in spite of 15 percent growth in the Consumer Price Index (CPI) in a similar period, and a over 86 percent growth in pension costs, and many new facilities and projects coming on line. City Clerk's Office Legislative Tracking: s· Off s: lgn- Department Director Assistant City Manager MIAMI BEACH 41 Cit~nager ~ AGENDA ITEM DATE R7A2 1-·12~{2-. MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: FROM: DATE: Mayor Matti Herrera Bower and Members of the Citi Co/ission Kathie G. Brooks, Interim City Manager~ A A , September 12, 2013 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING TENTATIVE BUDGETS FOR THE GENERAL, G.O. DEBT SERVICE, RDA AD VALOREM TAXES, ENTERPRISE, AND INTERNAL SERVICE FUNDS FOR FISCAL YEAR 2012/13 SUBJECT TO A SECOND PUBLIC HEARING SCHEDULED ON THURSDAY, SEPTEMBER 27, 2012 AT 5:01P.M. ADMINISTRATION RECOMMENDATION The Administration recommends that the City Commission adopt the attached Resolution which establishes tentative budgets for the General, G.O. Debt Service, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal Year (FY) 2012/13. PROCEDURE As outlined in the companion General Operating Millage Agenda Item, Section 200.065, Florida Statutes specifies the manner in which budgets are adopted. First, the tentative millage rate for both the general operating and debt service is adopted, then immediately thereafter, tentative budgets by fund are adopted. The attached Resolution adopting tentative budgets for the General, G.O. Debt Service, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for FY 2012/13 is therefore presented to you at this time for adoption. Additional details are contained in my Budget Message which is attached, however, highlights of that document are outlined below. BACKGROUND Over the last several years, the City of Miami Beach has adopted budgets that provided tax and fee relief while at the same time providing improved services that address needs and priorities identified by the community (primarily in public safety, cleanliness, landscaping and beautification, recreation and cultural arts programming, renewal and replacement funding for our facilities, and building/development functions); and providing structural changes that enhanced capital funding and reserves. Exhibits A through F attached to my budget message provide details of the efficiencies/reorganizations, service reductions, revenue 42 Adopting Tentative Budgets September 12, 2012 Page 2 enhancements, and service enhancements considered as part of the development of the proposed FY 2012/13 Work Plan and Budget. As a result of these initiatives, the proposed budget continues our focus on providing "value of services for tax dollars paid" by continuing to provide services to the community free of charge or at significantly reduced fees, including free performance arts and movies in the parks, free access to pools and youth centers, reduced fee recreation programming, enhanced maintenance of our newly renovated facilities, etc. -the services that our residents and businesses told us yet again are important to them during the 2012 Community Satisfaction Survey. Between FY 2007/08 and FY 2011/12, the General Fund absorbed more than $41 million in reductions (almost 17 percent of the $244 million FY 2011/12 General Fund budget) and reductions of approximately $49 million and 269 positions across all funds. Combined with more than $20 million in employee "give-backs" between FY 2009/10 and FY 2011/12, this represents almost $69 million in combined "givebacks" and reductions over 5 years. The FY 2012113 budget adds $1 million in efficiencvreductions and anticipates $2.6 million in additional employee givebacks in the General Fund. FY 2012/13 Budget Development Process As in past years, the Proposed Work Plan and Budget was developed through an intensive review process with our City Commission. Preliminary budget information was provided to the Commission at a Commission of the Whole meeting on July 6, 2012 where budget strategies and priorities were established. Additional budget briefings were held with the Finance and Citywide Projects Committee on July 9, July 10, July 25, and August 22, including a discussion of capital project priorities, projected General Fund revenues and expenditures, proposed efficiencies, impacts of service level alternatives, potential revenue enhancements, and potential service enhancements. At the time of adoption of the preliminary millage in July, it was estimated that the City had a gap of $4.4 million, an improved position from the estimated gap of $5.4 million at the same time in the development of the FY 2011/12 budget. Between setting the preliminary millage in July and finalizing the Proposed Work Plan and Budget, as we committed to do, we refined our projections. Our revenues, in particular, tend to have greater fluctuations than expenditures, and we were conservative early in the process and refined these projections over the summer. Changes since July include increased revenue estimates (primarily building development process fees, and rents and leases, offset by decreased interest earnings). As a result. the projected Current Service Level (CSL) gap was reduced to $3.3 million as discussed at the August 22 . 2012 meeting. At the August 22 FCWPC meeting, an approach to balance the General Fund budget was discussed. This approach included $2.6 million in employee givebacks; $932,000 in efficiencies; bringing in an additional $4 million in Resort Tax revenues to the General Fund to offset tourism-eligible expenditures, and modest increases in revenues. These were offset by $2.1 million in additions for living wage, operating costs associated with bringing capital projects on line, and various service enhancements -the majority of which was related to Police service enhancements and Building service enhancements (due to increased demand); and a transfer of $1.4 million to fund capital projects. 43 Adopting Tentative Budgets September 12, 2012 Page3 Changes After the Finance and Citywide Projects Budget Briefings Since the August 22, 2012 meeting with the Finance and Citywide committee, the Proposed Operating budget has continued to be refined. The following are the significant changes that have been incorporated: • Based on the final valuation for the Fire and Police pension, the City's annual contribution for FY 2012/13 has been reduced by approximately $400,000 compared to the preliminary estimate; resulting in a reduction of the pension allocation to Fire and Police. As a result, the recommended level of employee givebacks, which has been driven by increases in health and pension costs, is proposed to be similarly reduced from $3 million to $2.6 million in the General Fund. • Based on further discussions with the Finance Department regarding the accounting treatment of the $2.5 million pension credit received in both plans in FY 2011/12, the method of application of the credit to help offset pension increases has been changed. Rather than applying the credit against expenditures in FY 2012/13, as had been presented to the Committee of the Whole and to the FCWPC, the credit from FY2011/12 will be carried forward as revenues from FY 2011/12 to FY 2012/13, and the full pension contribution will be reflected in expenditures for FY 2012/13. The net impact on available funds, however, remains the same. • Two positions which had been recommended for conversion from classified positions (data entry clerk and administrative aide) to unclassified positions have been removed from the proposed list of reductions as it was determined that the significant portion of the savings was due solely to the turnover in each of the positions. • General Fund operating costs have been reduced, offset by increases in the capital and debt category, to reflect the savings anticipated from the initiatives implemented by Amaresco, in which energy and operating cost savings are anticipated to be offset by increased debt service issued to fund the cost of the initiatives. Through these refinements and changes, the gap between General Fund CSL expenditures and CSL revenues was reduced to $2.9 million, with revenues of $252.7 million and expenditures of $255.6 million. APPROACHES TO BALANCE Based on direction provided by the Finance and Citywide Projects Committee meetings in July and August 2012, the approximately $2.9 million shortfall between Current Service Level revenues and expenditures has been almost fully addressed through employee givebacks of $2.6 million, which partially offsets the additional employee health and pension cost.. In addition, the total cost of additions and service enhancements in the General Fund ($3.7 million) has been more than offset by almost $1 million in efficiencies, an increase in the resort tax transfer to the General Fund by $4 million for tourism eligible expenditures, and small revenue enhancements, resulting in a surplus of $1.1 million which is recommended for set aside for the FY 2013/14 budget. The resulting total Proposed General Fund 44 Adopting Tentative Budgets September 12, 2012 Page4 Operating Budget for FY 2012/13 is$ $256,975,000, which is $12.6 million or 5 percent more than the FY 2012/12 Adopted Budget of $244,336,7 40. The $12.6 million is primarily personnel cost increases (although offset by employee givebacks), increased internal services charges backs including Police liability claims and increases in debt service for replacement of vehicles and equipment, as well as proposed service enhancements. The FY 2012/13 proposed General Fund Budget is about $20 million (8 percent) more than the FY 2006/07 budget, despite pension contribution increases of $29 million during the same period. Inflation from October, 2006 through June, 2012, a similar period, was approximately 15 percent. This reflects a decrease across all other expenditures during that time, and even offsetting increases in health and salaries, a growing concern to us, as there is and should be a limit to the proportion of budget allocated to these costs. At this point, annual contributions to the City's two pension plans alone represent more than $52 million (20 percent) of the total General Fund budget. As a result, pension reform continues to be a high priority for the City, with recommendations from the Budget Advisory Committee presented to the Commission on August 29, 2012. This timing allows pension reform to be incorporated into the current set of contract negotiations. The Current Service Level expenditures reflect no additional transfers to the 11 percent Emergency Reserve or towards the City's additional 6 percent contingency goal. Reserve levels as of Se[tember 30, 2011 were $40.5 million, providing the required funding for the City's 11 percent reserve at $27.7 million and $12.8 million (5.1 percent) towards the City's 6 percent contingency goal. The City's 11 percent reserve is projected to be fully funded in FY 2011/12 from reserve levels as of September 30, 2010 at $26.7 million, in addition to funding $11.9 million or 4.9 percent towards the additional 6 percent contingency goal, for a total fund balance reserve of almost $38.6 million, if there are no additional changes in fund balance, and no additional transfers made. In addition to reductions and employee givebacks, the FY 2012/13 General Fund Operating Budget also reflects greater diversification of revenues since FY 2006/07. The Proposed Work Plan and Budget includes resort taxes and a transfer of Parking Operations Fund year-end surplus as well as Parking Operations Fund reimbursements and right-of-way fees paid to the General Fund that total almost $37 million; approximately 15 percent of the Proposed General Fund FY 2012/13 Budget. In large part due to these alternative sources, property tax revenues represent less than half ( 45 percent) of the total funding for the General Fund budget, as compared to 59 percent in FY 2006/07, a significant reduction over the past several years. Historically, the General Fund budget has increased between 6% and 8% annually, primarily due to increases in salary and benefit costs. In FY 2012/13, the $12.6 million (5.2%) increase in expenditures includes a $1.1 million reserve recommended to be set aside for FY 2013/14, to help offset the loss of the carry forward of the FY 2012/13 one-time pension credit of $2.5 million. Net of this reserve, the increase is $11.5 million (4.7%). It is important to note that operating costs are approximately$1. 7 million less than the FY2011112 budget. reflecting the continuation of various cost savings initiatives by the City such as re-bidding contracts. and careful review of department line item expenditures. Together, salaries and fringe represent 73 percent of CSL costs, with salaries and pension representing approximately 67 percent of the total current service level (CSL) budget of $255.5 million, (including the impacts of merit/steps increases, pension contributions, etc.) 45 Adopting Tentative Budgets September 12, 2012 Page 5 Use of One-Time Revenues The City's policy regarding use of one-time revenues states that "The City of Miami Beach will use onetime, non-recurring revenue for capital expenditures or one time expenditures and not subsidize recurring personnel, operations, and maintenance cost". Similar to the FY 2010/11 and FY 2011/12 budgets, FY 2012/13 General Fund revenues reflect the use of $3.4 million in prior year surplus (revenues in excess of expenditures) specifically set aside for this purpose Building Department reserves of $1.5 million are also included. As noted above, the carry-forward of the savings from the $2.2 million allocation of the one-time pension credit to the General Fund is also reflected as a one-time revenue for FY 2012/13. In total, the General Fund Operating Budget reflects a total of $7.1 million in one-time revenues, offset by $1.4 million proposed transfer to capital. OTHER OPPORTUNITIES TO REDUCE THE FY 2012/13 GENERAL FUND BUDGET There has been discussion of additional reductions in millage rate. It is important to note that the recommendations regarding the City's operating millage was made after a careful review of expenditures. The $1.1 million is the net surplus available after the recommended employee givebacks, efficiencies, additions and enhancements, and revenue increased incorporated into the FY 2012/13 General Fund proposed operating budget. The equivalent millage for $1.1 million is 0.0585 which could be reduced for FY 2012/13. However given the loss on the one time pension credit carried forward from FY 2011/12 to FY 2012/13, it is recommended that the surplus be set aside to help offset this loss in FY 2013/14. In addition, the millage could be significantly further reduced in lieu of providing $3.5 million in General Fund enhancements. This is equivalent to a reduction of 0.1865 mills. However, I believe it will provide greater value to our community to provide a return for the increased values by increasing our service levels. These enhancements include: • Increasing Building Department staff to prevent deterioration in services in response to increase demand • Enhancements to Police services, including 6 police officers for additional Patrol along Washington Avenue, 4 police officers for a crime suppression team, 2 officers for along the beaches in North Beach, additional overtime for homeless outreach and additional staffing for our records unit and detention center • Enhanced internal controls in Police Internal Affairs and though a regular outside audit of high risk areas • Additional staff to help manage leases and rental contract and monitor special events and concessions; as well as providing for grants software and equipment needs at the Colony Theatre • $1.4 million provides a transfer for funding Pay-as-You Go funding for capital projects. 46 Adopting Tentative Budgets September 12, 2012 Page 6 VACANT POSITIONS At the request of the Finance at Citywide Projects Committee on August 22, 2012, Attachment 2 provides a listing of vacant positions distributed the Letter to the Commission July 31, 2012. At that time, there were a total of 44 vacant positions in the General Fund, with an annual value of $2.8 million. However, several of these vacant positions were already identified for elimination as part of our $1 million in efficiencies reductions. Further some critical positions have been hired in the interim, including the Urban Forrester, Police positions, and School Crossing Guards. This leaves a balance of 30 positions on the list with a value of $1.9 million. I consider the remaining positions to be critical to our ongoing operations and would not recommend them for elimination. PROPOSED FY 2012/13 ENTERPRISE FUND BUDGETS Enterprise Funds are comprised of Sanitation, Water, Sewer, Stormwater, Parking, and Convention Center Departments. The Proposed FY 2012/13 Enterprise Funds Budget is $161.1 million .. This represents an increase of $4.4 million (2.8 percent) from the FY 2011/12 budget of $156.7 million, primarily due to: • increases in salary, pension and health cost similar to those described in the General Fund, although in 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 sewer revenues collected by the City • Increases in funding for future renewal and replacement projects and equipment which is determined by prior year depreciation amounts ($2.2 million) These increases area offset by decreases in debt service payments by the Stormwater Fund ($2 million)as the debt service for bonds sold in FY 2011/12 along with the associated refinancing of existing bonds resulted in lower than budgeted debt service costs; reduced operating costs in the Convention Center offset by reduced revenues due to an accounting treatment change of electrical revenues ($1.2 million); reduced funding needed to be transferred for the Stormwater Rate Stabilization Fund ($1 million); and other miscellaneous reductions ($0.3 million). PROPOSED FY 2012/131NTERNAL SERVICE FUND BUDGETS Internal Service Funds are comprised of the Central Services, Fleet Management, Information Technology, Risk Management and Property Management Divisions. The Proposed FY 2012/13 Internal Service Fund budget is $59.3 million. This represents an increase of $5.0 million (9.2 percent) from the FY 2011/12 budget of $54.3 million, primarily due to increases in salary, pension and health cost similar to those described in the General Fund as well as increases in Police liability claims ($0.75 million) and debt service for replacement of vehicles and equipment ($1.1 million). These costs are completely allocated to the General Fund and Enterprise Fund departments, and the Risk Management Fund reimburses the General Fund for the cost of legal services. 47 Adopting Tentative Budgets September 12, 2012 Page 7 CONCLUSION In summary, the FY 2011/12 General Fund Proposed Work Plan and Budget maintains current service priorities for the community, despite property tax rates set at 1.2 mills (16 percent) lower than FY 2006/07 when property values were similar to the 2011 certified values. The Administration recommends adoption of the attached Resolution which establishes tentative budgets for General, G.O. Debt Service, RDAAd Valorem Taxes, Enterprise, and Internal Service Funds for FY 2011/12, subject to a second public hearing scheduled on Thursday, September 27, 2012 at 5:01 P.M. Attachment 48 City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miomibeochfl.gov Kathie G. Brooks, Interim City Manager Tel: 305-673-7010, Fox: 305-673-7782 September 12, 2012 Honorable Mayor Matti Herrera Bower and Members of the City Commission: I am pleased to transmit the Proposed Work Plan and Operating Budget for Fiscal Year (FY) 2012/13, commencing on October 1, 2012 and ending on September 30, 2013 (Proposed Work Plan and Budget), including the Proposed Work Plan, the Proposed Operating Budget, the Proposed Capital Budget, and the associated Capital Improvement Program for FY 2013/14 through FY 2016/17. The total Proposed General Fund Operating Budget is $256,975,000, which is $12.6 million or 5 percent more than the FY 2011/12 adopted budget of $244,336,7 40. Further, General Fund reserve levels as of September 30, 2011 for the 11 percent emergency reserve and the 6 percent contingency goal were a total of $40.5 million. The General Fund 11 percent requirement for FY 2012/13 based on the proposed operating budget net of capital transfers and reserves for FY 2013/14 is $27.7 million, resulting in $12.8 million (a 5.1 percent additional contingency), if there are no additional changes in fund balance, and no additional transfers made. Budget Highlights • The FY 2012/13 budget acids $1 million in reductions and $2.6 million in employee givebacks to almost $69 million in reductions in predominantly recurring expenditures over the last 5 years • General operating millage rate is reduced by .0533 mills (and more than 0.1 mills since FY 2010/1 1), which together with the 0.316 mills decline in debt service results in a total decline of 0.849 mills • The proposed millage is 1.3 mills below FY 2006/07 when property values were at a similar level • The General Fund Operating budget is 8 percent more than in FY 2006/07, in spite of 15 percent growth in the Consumer Price Index (CPI} in a similar period, 126 percent growth in pension costs, and many new facilities and projects coming on line • General Fund enhancements of $3.5 million provide improved services to the community providing a return to the community for the increase in property tax levy 49 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 2 The City's Proposed Operating Budget in total for FY 2012/13 is $441,376,000 including the General Fund, General Obligation Debt Service, Enterprise Funds and Transfers to the Redevelopment District. This reflects an increase of $17.3 million, or 4.1 percent over the prior year total Adopted Operating Budget of $424,062,635. In addition, the budget for Internal Service Funds, which are wholly supported by transfers from the General Fund, Enterprise Funds and the Redevelopment District, is $59,328,000, an increase of $5 million, or 9.3 percent, over the prior year total adopted operating budget of $54,280,445. The City of Miami Beach has experienced significant change in the last several years, due to changes in property tax legislation, property values that first increased and then declined, and increasing pension plan contributions due to the downturn in the investment market. Today, property values in FY 2012/13 are similar to FY 2006/07, $23.1 billion versus $22.7 billion. Since their peak in FY 2007/08, property values Citywide have declined almost $3.8 billion (approximately 14 percent) through FY 2012/13, despite almost $3 billion in new construction added to the roll. Without the new construction, the decline in values would be even greater, at 29 percent. Outside the City Center RDA, which impacts General Fund Property Tax revenues, the decline in values is even more significant at 20 percent, even after new construction. In FY 2010/11 the city's approach to addressing the then deficit of $32 million included a distribution of the shortfall between taxpayers and employees. Taxpayers had their tax rate increased from 5.6555 to 6.2155, an increase of 0.56 mills. The goal of the Commission has been to bring them back to that level as property values increase over time. It should be remembered that between FY 2009/10 and FY 2010/11 values declined by $2.6 billion which, together with pension cost increases, drove the need for an increase in the millage. FY 2012/13 values are still short of FY 2009/10 values by $1.6 billion. As values approach FY 2009/10 values, through further increases in the future, this will provide the opportunity to bring the millage down to 5.6555. In FY 2011/12 the City took its first step in that direction with a reduction in the millage rate of 0.05 mills. The proposed millage rate for FY 2012/13 reduces the operating millage by an additional 0.0533 mills and a total reduction of 0.0849 mills including the reduction in debt service millage. The total operating millage reduction between FY 201 0/11 and the proposed FY 2012/13 millage is 0.1033. Over two years, this reduction represents 18% of the goal to get back to a millage rate of 5.6555. The Proposed Budget recommends a total combined millage rate for the City of Miami Beach of 6.3690 which is comprised of a general operating millage rate of 6.0039 (a decrease of 0.0533 mills), a General Fund Capital Renewal and Replacement millage of 0.1083, and a voted debt service millage rate of 0.2568 (a decrease of 0.0316 mills). As shown in the table below, in prior years the City of Miami Beach significantly reduced tax rates as property values increased. Between FY 1999/00 and FY 2009/10, total combined City of Miami Beach millage rates declined approximately 2.8 mills. In FY 2007/08 alone, the millage 50 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 3 rate declined by approximately 1 .8 mills, with annual savings to the average homesteaded property of over $400. Property Value, Millage and Property Tax Levy Millage Rates Tax Levy (in millions) General Fund Final/ Total Taxable Revised (including S. Property Taxable Total General Total Pointe, and Values Value Citywide Fund/RDA including Renewal & Budget Year (billions) (billions) Millage Millage Debt Replcmnt) FY1997/98 $ 6.46 $ 6.40 9.2100 7.4990 $ 57.45 $ 46.78 FY1998/99 6.97 $ 6.87 8.9830 7.4990 $ 60.37 $ 44.66 FY1999/00 7.66 $ 7.54 8.6980 7.4990 $ 64.29 $ 47.36 FY2000/01 8.37 $ 8.22 8.5550 7.3990 $ 69.08 $ 49.75 FY2001/02 9.40 $ 9.22 8.3760 7.2990 $ 75.97 $ 54.37 FY2002/03 10.56 $ 10.41 8.3220 7.2990 $ 84.81 $ 61.05 FY2003/04 12.09 $ 11.85 8.1730 7.2990 $ 95.39 $ 68.17 FY2004/05 14.04 $ 13.86 8.1730 7.4250 $ 110.74 $ 79.38 FY2005/06 17.45 $ 17.15 8.0730 7.4810 $ 135.91 $ 111.69 FY2006/07 22.74 $ 22.26 7.6730 7.3740 $ 168.38 $ 140.31 FY2007/08 26.85 $ 26.14 5.8970 5.6555 $ 150.42 $ 125.33 FY2008/09 26.90 $ 25.89 5.8930 5.6555 $ 150.59 $ 125.94 FY2009/10 24.70 $ 23.24 5.9123 5.6555 $ 138.70 $ 115.73 FY2010/11 22.10 $ 20.97 6.5025 6.2155 $ 136.55 $ 112.14 FY2011/12 21.98 $ 20.76 6.4539 6.1655 $ 135.80 $ 111.29 FY2012/13 23.10 6.3690 6.1122 $ 140.91 $ 114.72 Further, despite an increase of 0.56 mills in the operating tax rate in FY 2010/11, City of Miami Beach proposed combined millage rates today remain more than 2.3 mills lower than in FY 1999/00 (25 percent), and approximately 1 .3 mills lower than 2006/07 when property values similar to today's values. As a result, the proposed property tax levy is approximately $27 million lower in FY 2012/13 than it was in FY 2006/07. Total Combined Millage 98 99 '00 '01 '02 '03 '04 'OS '06 '07 'OS '09 '10 11 12 13 Fiscal Years 51 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 4 Property Values and Tax Levy '07 '08 '09 '10 '11 '12 '13 ''''"'''"'Property Values -iii-Tax Levy including Debt Today' s General Fund Operating Budget also reflects greater diversification of revenues since FY 2006/07. The Proposed Work Plan and Budget includes resort taxes and a transfer of Parking Operations Fund year-end surplus as well as Parking Operations Fund reimbursements and right-of- way fees paid to the General Fund that total almost $37 million; approximately 15 percent of the Proposed General Fund FY 2012/13 Budget. In large part due to these alternative sources, property tax revenues represent less than half (45 percent) of the total funding for the General Fund budget, as compared to 59 percent in FY 2006/07, a significant reduction over the past several years. Between FY 2007/08 and FY 2011/12, the General Fund absorbed more than $41 million in reductions (almost 17 percent of the $244 million FY 2011/12 General Fund budget) and reductions of approximately $49 million and 269 positions across all funds. Combined with more than $20 million in employee "give-backs" between FY 2009/10 and FY 2011/12, this represents almost $69 million in combined "givebacks" and reductions over 5 years. Total 5-Year Reductions through FY 2011/12 General Fund $Impacts FT PT Public Safety $ {7,635,095) (69.0) 1.0 Operations (5,805,867) (61.0) (23.0) Administrative Support (2,858,694) (33.0) 1.0 Econ & Cultural Dev (1,193,426) (17.0) - Citywide (1,467,642) - - Subtotal Reductions $ (18,960,724) (180.0) (21.0) Transfers $ (22, 734,851) -- Total General Fund Reductions $ (41,695,575) (180.0) (21.0) Internal Service Funds $ (3,498,225) (37) - Enterprise Funds (3,333,021) (39) 8.0 GRAND TOTAL REDUCTIONS** $ (48,526,821) {256.0) {13.0) Estimated Employee Givebacks $ 120,349 36Ql_ GRAND TOTAL REDUCTIONS AND GIVEBACKS $ (68,876,181) (256.0) (13.0) 52 FY 2012/13 Proposed Work Plan and Budget Message September 12,2012 Page 5 The FY 20 12/13 budget adds $1 million in eHiciency reductions and anticipates $2.6 million in employee givebacks. Of note, the FY 2012/13 proposed General Fund Budget is about $20 million (8 percent) more than the FY 2006/07 budget, despite pension contribution increases of $29 million during the same period. Inflation from October, 2006 through June, 2012, a similar period, was approximately 15 percent. This reflects a decrease across all other expenditures during that time, and even offsetting increases in health and salaries, a growing concern to us, as there is and should be a limit to the proportion of budget allocated to these costs. At this point, annual contributions to the City's two pension plans alone represent more than $52 million (20 percent) of the total General Fund budget. As a result, pension reform continues to be a high priority for the City, with recommendations from the Budget Advisory Committee presented to the Commission on August 29, 2012. This timing allows pension reform to be incorporated into the current set of contract negotiations. FY 2012/13 PROP()SED W()RKPLAN AND BOI)GET OVERVIEW I As in past years, the Proposed Work Plan and Budget was developed through an intensive review process with our City Commission. Preliminary budget information was provided to the Commission at a Commission of the Whole meeting on July 6, 2012 and budget strategies and priorities were established. Additional budget briefings were held with the Finance and Citywide Projects Committee on July 9, July 10, July 25, and August 22, including a discussion of capital project priorities, projected General Fund revenues and expenditures, proposed efficiencies, impacts of service level alternatives, potential revenue enhancements, and potential service enhancements. At the time of adoption of the proposed millage in July, it was estimated that the City had a gap of $4.4 million, an improved position from the estimated gap of $5.4 million at the same time in the development of the FY 2011/12 budget. Between setting the preliminary millage in July and finalizing the Proposed Work Plan and Budget, as we committed to do, we refined our projections. Our revenues, in particular, tend to have greater fluctuations than expenditures, and we were conservative early in the process and refine these projections over the summer. Changes since July include increased revenue estimates (primarily building development process fees, and rents and leases, offset by decreased interest earnings). As a result, the pro;ected Current Service Level (CSL) gap was reduced to $3.3 million as discussed at the August 22 , 20 7 2 meeting. At the August 22 FCWPC meeting, an approach to balance the General Fund budget was discussed. This approach included $2.6 million in employee givebacks; $932,000 in efficiencies; $bringing in an additional $4 million in Resort Tax revenues to the General Fund to offset tourism- eligible expenditures, and modest increases in revenues. These were offset by $2.2 million in additions for living wage, operating costs associated with bringing capital projects on line, and various service enhancements -the majority of which was related to Police service enhancements 53 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 6 and Building service (due to increased demand); and a transfer of $1 .4 million to fund capital projects. Since the August 22, 2012 meeting with the Finance and Citywide committee, the Proposed Operating budget has continued to be refined. The following are the significant changes that have been incorporated: • Based on the final valuation for the Fire and Police pension, the City's annual contribution for FY 2012/13 has been reduced by approximately $400,000 compared to the preliminary estimate initially received; resulting in a reduction of the pension allocation to Fire and Police. As a result, the recommended level of employee givebacks, which has been driven by increases in health and pension costs, is proposed to be similarly reduced from $3 million to $2.6 million in the General Fund. • Based on further discussions with the Finance Department regarding the accounting treatment of the $2.5 million pension credit received in both plans in FY 2011/12, the method of application of the credit to help offset pension increases has been changed. Rather than applying the credit against expenditures in FY 2012/13, as had been presented to the Committee of the Whole and to the FCWPC, the credit from FY2011 /12 will be carried forward as revenues from FY 2011/12 to FY 2012/13, and the full pension contribution will be reflected in expenditures for FY 2012/13. The net impact on available funds, however, remains the same. • Two positions which had been recommended for conversion from classified positions (data entry clerk and administrative aide) to unclassified positions have been removed from the proposed list of reductions as it was determined that the significant portion of the savings was due solely to the turnover in each of the positions. • General Fund operating costs have been reduced, offset by increases in the capital and debt category, to reflect the savings anticipated from the initiatives implemented by Amaresco, in which energy and operating cost savings are anticipated to be offset by increased debt service issued to fund the cost of the initiatives. Historically, the General Fund budget has increased between 6% and 8% annually, primarily due to increases in salary and benefit costs. In FY 2012/13, the $12.6 million (5.2%) increase in expenditures includes a $1 .1 million reserve recommended to be set aside for FY 2013/14, to help offset the loss of the carry forward of the FY 2012/13 one-time pension credit of $2.5 million. Net of this reserve, the increase is $11 .5 million (4.7%), and is similarly driven by increases in salary and benefit costs (primarily pension and health). Employee Givebacks As noted above, a primary driver of increases between the FY 2011/12 adopted operating budget and the FY 2012/1 3 proposed operating budget are personnel costs increases, primarily increases 54 FY 2012/13 Proposed Work Plan and Budget Message September 12,2012 Page 7 in health insurance and pension costs. In the General Fund the estimated combined increase is approximately $7.4 million is direct allocations to the General Fund as well as an additional Internal Service Fund charges which are due to pension and health increases in those funds. The increase citywide is $9.1 million. The proposed employee givebacks of $2.6 million are intended to partially offset the employee health and pension cost increase in the General Fund. While not specifically budgeted, the intent is to negotiate similar levels of givebacks in all funds for a total of $3.5 million in givebacks citywide. It should be noted that the FY 2012/13 Proposed Operating Budget assumes status quo for all bargaining agreements until new agreements are negotiated. As a result, the Proposed Operating Budget assumes no merit increases for the Communications Workers of America bargaining unit. The impact of this is approximately $0.25 million in the General Fund which is in addition to the employee givebacks noted above. Efficiencies, Reductions and Revenue Enhancements As with the preparation of budgets for the last five years, departments are continuing to analyze and present their budget from two perspectives: 1) reviewing for potential efficiencies, reorganizations to reduce cost, etc., without impacting services; and 2) performing a modified zero- based analysis of each department budget, identifying potential service reduction alternatives versus core functions. For each of the potential service reductions, departments provided the type of impact and the magnitude of the impact. Core functions were defined as those functions which, if cut, render it impossible for the department to provide basic service at a reasonable level. In spite of the significant reductions in the General Fund over the last 5 years, we continue to be proactive in locating additional efficiencies in the General Fund. For FY 2012/13 almost $7 million of efficiencies are built into the proposed General Fund budget. However, the focus of the FY 2012/13 budget was to provide service enhancements in areas of need, rather than identify areas for reducing service levels. Proposed revenue enhancements for FY 2012/1 3, projected to generate additional revenue totaling $263,000, as shown in Attachment D, including Police Department false alarm fees, Fire Department transport fee increases to mirror the Miami-Dade charge rates, Parks and Recreation will increase pavilion rental rate fees, and Colony theater rental fees. Service Enhancements Potential service enhancements for FY 2012/13 are proposed at a cost of $3.5 million in the General Fund, providing a return on value for the increased property tax levy. There are also $200,00 in additions related to living wage increases and the operating cost of capital projects coming on-line, as well as $1.8 million in service enhancements in other funds. The $3.5 million of enhancements in the General Fund provides for the following: 55 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 8 • Just under one million Enhancements in the Police Department are proposed to address crime suppression and beach closure activities • Over $700,000 of the enhancements to add contract based staffing to the Building Department to address increased activity in that area and ensure customer responsiveness • $200,000 for strengthening internal controls • $200,000 for additional staff to help manage leases and rental contract and monitor special events and concessions; as well as providing for grants software and equipment needs at the Colony Theatre • $1.4 million provides a transfer for funding Pay-as-You Go funding for capital projects Increased Use of Resort Taxes to offset Tourism Eligible Expenditures in the General Fund Based on an outside consultant study conducted in 2010 using FY 2007/08 actual costs, it is estimated that there are approximately $50.5 million in eligible resort tax expenditures in the General Fund. These include expenses associated with police officers serving entertainment areas; a portion of fire rescue services from Fire Stations 1 &2; ocean rescue services; enhanced code compliance provided to respond to evening entertainment area violations and staffing of special events; other code compliance activities in tourism and visitor related facilities/ areas; Tourism and Culture Department and the Cultural Arts Council; museums and theaters (Garden Center, Bass Museum, and Colony Theater); golf courses (net of revenues); Memorial Day and other special event costs; homeless services; July 4 1h; Visitor Center funding; holiday lights; Jewish Museum; Miami Design Preservation League (MDPL); Orange Bowl; monuments; etc. However, $8.8 million of these costs were estimated as being addressed by dedicated funding for the South Pointe area pursuant to the Miami-Dade County Convention Development Tax interlocal agreement, thereby resulting in approximately $4 7.7 million in eligible Resort Tax expenses in the Genera/ Fund. Based on FY 2011/12 resort tax collections to date, it is estimated that there will be an additional $4 million available in resort tax collections to provide additional funding for these General Fund activities in FY 2012/13. The total proposed Resort Tax Fund transfer to the General Fund for FY 2012/13 is approximately $31 million. 56 FY 2012/13 Proposed Work Plan and Budget Message September 12, 201 2 Page 9 Use of One-Time Revenues The City's policy regarding use of one-time revenues states that "The City of Miami Beach will use onetime, non-recurring revenue for capital expenditures or one time expenditures and not subsidize recurring personnel, operations, and maintenance cost". Similar to the FY 2010/11 and FY 2011/12 budgets, FY 2012/13 General Fund revenues reflect the use of $3.4 million in prior year surplus (revenues in excess of expenditures) specifically set aside for this purpose Building Department reserves of $1 .5 million are also included. As noted above, the carry-forward of the savings from the $2.2 million allocation of the one-time pension credit to the General Fund is also reflected as a one-time revenue for FY 2012/13. In total, the General Fund Operating Budget reflects a total of $7. 1 million in one-time revenues, offset by $1 .4 million proposed transfer to capital. In addition, the $7.2 million in prior year Parking Fund operating surplus, as was initiated in FY 2010/11, budget is also included. While this is generally not a recommended financial practice, it is being recommended at this time so as to allow for a gradual decline in the use of one-time revenues for recurring expenditures over the next few years. As in prior year budgets, the intent will be to expend these dollars last during the fiscal year, so that if any savings are achieved throughout the year, the amount of funds needed from this source will be reduced, in which event the funds will be available to be used in subsequent fiscal years. Use of Remaining Surplus The FY 2012/13 budget includes the set aside of a reserve of $1.1 million for FY 2013/14 to help offset the loss of the onetime pension credit of $2.2 million for FY 2012/13 that will not be available in FY 2013/14. The $1.1 million is the net surplus available after the recommended employee givebacks, efficiencies, additions and enhancements, and revenue increased incorporated into the FY 2012/13 General Fund proposed operating budget. The equivalent millage for $1.1 million is 0.0585. Exhibits A through E provide a summary of the efficiencies/reorganizations, service reductions, revenue enhancements, and service enhancements considered as part of the development of the proposed FY 2012/13 Work Plan and Budget. As a result of these initiatives, the proposed budget continues our focus on providing "value of services for tax dollars paid" by continuing to provide services to the community free of charge or at significantly reduced fees, including free arts and movies in the parks, free access to pools and youth centers, reduced fee recreation programming, enhancement maintenance of our newly renovated facilities, etc. -the services that our residents and businesses told us yet again are important to them during the 2012 Community Satisfaction Survey. 57 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 10 In 2012, the City of Miami Beach conducted its fourth set of comprehensive statistically valid community satisfaction surveys. The Community Survey was designed to provide resident input on quality of life, city services, and taxes; and to identify key drivers for improvement. Overall, when compared to the 2009 residential survey, the City remained stable in most of the areas measured. Residential respondents provided the highest positive ratings for the appearance and maintenance of the city's public buildings and public schools, the appearance of playgrounds and recreation programs. A record high 89% of residents rated Miami Beach excellent or good as a place to live and the standard of living outlook improved 80% in 2012 compared to 53% in 2009. Business results also remained stable in many of the survey items from the 2009 survey. Businesses continue to rate the City of Miami Beach as 'one of the best' or an 'above average place' to run a business. These results indicate a stable level of satisfaction with Quality of Life in Miami Beach and services provided by the City, although there is need for improvement in specific areas. Detailed survey results are available on the City's website and in the Strategic Planning section of the FY 2012/13 Proposed Work Plan and Budget in Brief document. CITYWIDE WORK PLAN A summary of our Citywide Work Plan is attached (Exhibit F) for your review along with the highlights presented on the following pages. CLEANER AND SAFER Cleanliness of our City continues to be a priority for our residents and businesses. We will maintain expanded services that have been implemented in recent years. The City uses a quantitative index to assess the impact of these efforts and results have shown significant overall improvement. Between FY 2005/06 and FY 2010/11, 85.5 percent of public areas Citywide were rated as clean or very clean as compared to 65.2 percent in FY 2005/06. None-the-less, our residents continue to view cleanliness as an important service area, and in the 2012 survey, it was cited as the most important service to retain. As a result, no reductions in service levels are recommended in existing sanitation services, and additional funding is proposed for enhanced pressure cleaning on Lincoln Road, Washington Avenue, and Ocean Drive. Provides funding for an enhanced level of pressure cleaning in the City's entertainment areas The resident surveys in 2005, 2007, 2009, and 2012 confirmed that safety is one of the top quality of life factors for our residents and increasing the visibility of police in neighborhoods as 58 FY 2012/13 Proposed Work Plan and Budget Message September 1 2, 201 2 Page 11 one of the most important areas for the City to address to improve public safety. Recent trends reflect an increase in Part I crimes and in 2011 the City of Miami Beach experienced an increase (9 percent) in total violent crimes and non-violent crimes combined, when compared to 201 0. Of significance, however, while non-violent crimes (which include burglary, larceny and auto theft) increased 9.6 percent, violent crimes increased 2.66 percent. Despite the recent increase, there has been a 7 percent decline in total violent crimes and non-violent crimes since 2001 in spite of the 30 percent increase in daily population and special events since 2001. However, the Miami Beach crime rate is slightly below the latest total nationwide violent crimes and non-violent crimes reported by the FBI for the first six months of 2012 by 5.2 percent and 5.7 percent, respectively. Nationwide, violent crime declined by 6.4 percent and property crimes declined by 3.7 percent. The Proposed Work Plan and Budget adds two ATV officers to the North area for working the night shift to enforce beach closures, four Police Officers in the South and Citywide to form an additional Crime Suppression team, six Police Officers in the South area for a walking beat along Washington Ave, one Detention Officer to augment current staffing levels, an enhancement to the Records Unit, and additional overtime for the Neighborhood Resource Officer Homeless Outreach Program. The Proposed Budget and Work Plan also increases security coverage on Lincoln Road between the hours of 1 am and 6 am, allowing for 24 hour coverage between the security services and Police Officers. Adds l2 police oHicers to the Proposed Work Plan and Budget MORE BEAUTIFUL AND VIBRANT; MATURE AND STABLE; UNIQUE HISTORIC AND URBAN ENVIRONMENT The maintenance and appearance of our residential neighborhoods and business districts continues to be a priority, along with protecting the quality of life enjoyed by all members of our community. In addition to maintaining initiatives implemented in recent years, the Proposed Work Plan and budget converts a shared position in Real Estate, Housing and Community Development with the Tourism and Culture Department into two full-time positions to provide enhanced monitoring of concessions and special events. Funding is also provide through the Resort Tax fund to provide the enhanced level of staffing for Spring Break and Memorial Day as was implemented in FY 2011/12. The Proposed Work Plan and Budget maintains $219,000 in funding for reforestation, replacement of landscaping, pavers, up-lighting, etc. through the Capital Investment Upkeep Account. The availability of quality recreation programs continues to be one of the highest priorities for our community. As a result, the Proposed Work Plan and Budget reflects no reductions in our offering of recreation programs. Successful recreation programs for teens and seniors also continue to be a priority, along with weekly classes in visual or performing arts in after school programs and summer camps 59 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 12 CULTURAL, ENTERTAINMENT AND TOURISM CAPITAL AND AN INTERNATIONAL CENTER FOR INNOVATION AND BUSINESS The City's business and tourism sectors are an integral part of our City as reflected in our vision statement, and has demonstrated significant improvement over the last two years including record increases in Resort Taxes in the last two years, increases in Parking department revenues, and increases in Building development activity. In order to continue to enhance customer service in the Building Department, the Proposed Work Plan and Budget adds approximately $700,000 in positions to the Building department in response to the increased activity. However, in order to remain flexible and responsive to changes in demand levels, these resources are added through contracted services rather than as full time positions. A condominium ombudsman function will also be created though the use of existing resources in the Building Department. In addition, enhancements funded through the Resort Tax Fund intended to enhance economic development though tourism initiatives that include enhanced marketing for Washington Avenue marketing similar to other marketing initiatives currently funded through the Greater Miami Convention and Visitors Bureau for the City; funding for a grant to the FIU-Wolfsonian over two years to provide a master plan for the Museum site that will be used to access $1 0 million in Miami-Dade County General Obligation Bond funding for expanding and revitalizing their facilities on Washington Avenue and Lennox Avenue, and funding for re-instatement of the Festival of the Arts in North Beach. Further, the Proposed Work Plan and Budget maintains funding through the Resort Tax Fund for tourism-related economic development activities in North Beach that were initiated in FY 2011/12. WELL-IMPROVED INFRASTRUCTURE The proposed Budget and Work Plan provides for continued improvements and maintenance of our facilities and neighborhoods infrastructure by appropriating $1 .2 million in our capital budget to address shortfalls in funding for the above ground portions of our neighborhood right of way projects (primarily for milling and resurfacing). Together with the transfer of 1 .4 million from the General Fund, $2.7 million in pay-as you go funding is included in the Proposed FY 2012/13 budget to fund seawall repairs at Muss Park as well as the addition of a potential Kayak Launch at that facility (subject to community input), improvements to our Park facilities (irrigation at Fisher Park, Stillwater Park Sports Field, Crespi Park Field Renovation, Flamingo Park Madvac System, Tatum Park Outdoor Sand Volleyball) and the additional above ground funding for the following neighborhood projects: • Bayshore Central Bid Pack A • Bayshore, Lower North Bay Road Bid Pack B • Bayshore Lake Pancoast Bid Pack C • Bayshore Neighborhood Sunset Isles I and II • Bayshore Neighborhood Sunset Isles Ill and IV 60 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 13 Funding for the Resort Tax dedicated to tourism-eligible quality of life projects and funding received through the Convention Development tax lnterlocal Agreement with Miami-Dade County. These projects include: • Middle Beach Recreation Corridor Phase II • Baywalk Phase I • Flamingo Park • Par 3 Golf Course Master Plan • 6th Street Restrooms • North Shore Open Space Park Replacement Fitness Circuit/Trail • Beach Access Gates • Citywide Dune Restoration and Enhancement • Alton Road Irrigation System from Sh Street to Michigan • Collins Ave, Sh Street to Lincoln Rd. • Citywide Dune Restoration and Enhancement Further Enterprise and special revenue funds such as the Redevelopment Agency, South Pointe Capital, Convention Center, Parking and People's Transportation Tax (PTP)will provide funding for: • Collins Park Parking Garage • Collins Canal Enhancement Project • Seawall-Botanical Garden/Collins Canal • Lincoln Road Landscaping • Aluminum Street Lighting Pole Replacement-City Center • Beachwalk Lighting Retrofit • Euclid Ave Improvements at Lincoln Rd • Flamingo 6th Street ROW improvements • South Pointe Pier • South Point Park Playground Fence • 54 Inch Diameter Sewer Main Rehabilitation, Alton South of Sh • Convention Center -Replace various disconnects/bus ducts/electrical panels. Exhibit Hall Chairs, Ballroom C&D Carpet, and two 1 00 ton chilled water air handlers, interior bus ducts, C & D ballroom disconnects, chilled water valves.; and install ADA Automatic Doors, • Sunset Harbor Parking Garage AIPP Funding • Surface lots at Harding Ave & 71 St., North Shore Youth Center, 6972 Bay Drive, 7061 Bonita Drive, 4001 Prairie Avenue and Bass Museum Surface Lot • Relocation of Parking Meter Sign and Shop to accommodate Relocation of the Property Management Facility • License Plate Recognition Software for Parking Enforcement 61 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 14 • Continued Replacement of Master Meters and Revenue Control Equipment Upgrades • Street Infrastructure Improvements -Crosswalks, Mast Arm Painting, Pedestrian Crossings, Speed Radar Units • Additional Funding for the West Avenue Bridge VALUE OF SERVICES FOR TAX DOLLARS PAID As noted earlier, between FY 2007/08 and FY 2011/12, the General Fund absorbed more than $41 million in reductions (almost 17 percent of the $244 million FY 2011/12 General Fund budget) and reductions of approximately $49 million and 269 positions across all funds. Further, a total of approximately $15 million in employee "give-backs" were achieved between FY 2009/10 and FY 2010/11, and $20 million through FY 2011/12, through a combination of freezing cost of living adjustments for all employees for two and one-half years, elimination of merit increases for all employee except members of the Fraternal Order of Police (FOP) and International Association of Firefighters) IAFF, increased contribution to pension for all employees except members of FOP and IAFF, pension plan changes for the Miami Beach Employees Retirement Plan, increased contributions for take- home vehicles by FOP members for 18 months, reduced holiday pay for IAFF members, and increased contributions to health insurance by members of the FOP and IAFF for 18 months. Combined with more than $20 million in employee "give-backs" between FY 2009/10 and FY 2011/12, this represents almost $69 million in combined "givebacks" and reductions over 5 years, with no significant impacts to the services provided to our community. Although the economy appears to have stabilized, the impact of the recent recession impacted both property tax revenues as well as pension costs through FY 2012/13 and likely further into the future. Therefore, the City's strategy continues to consider the long term financial sustainability of the City. Beginning with the development of the FY 2009/10 budget, a strategy was developed to address short-term, mid-term and long-term financial needs. • Strategies to address short-term financial needs included ongoing efficiencies and wage concessions by employees. • Mid-term financial sustainability was addressed by pension concessions from current employees in the Miami Beach Employees Retirement Plan • Longer term financial sustainability is enhanced by the pension plan restructures that have been put in place for new employees in the Miami Beach Employee Retirement Plan. For example, for General Employees, the plan restructure proposed for new employees is projected by the City's actuary to reduce the City's ann.ual required contribution by almost $1 million in FY 2012/13, with additional reductions annually as the number of employees in the Miami Beach Employees Retirement Plan hired after October 1, 2010 continues to increase. Further, additional pension plan reform recommendations have been developed 62 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 15 by the City's Budget Advisory Committee for the Fire and Police Pension Plan which were presented to the City Commission on August 29, 2012. All of the givebacks achieved, except the 18 month increased contribution to health by FOP and IAFF and the increased contributions for take-home vehicles by FOP members for 18 months, represent ongoing, recurring savings to the City and the employee give-backs contribute significantly towards the City's strategic goal (key intended outcome) to control payroll costs. With the planned $1.16 million in efficiencies and $2.6 million in employee "givebacks" incorporated in the Proposed Work Plan and Budget for FY 2012/13, the 6 year total of reductions and employee Givebacks is almost $73 million. FY2012/13 Proposed General Fund $Impacts Ff PT Public Safety ($136,000) 1.0 1.0 Operations (135,000) (3.0) (4.0) Administrative Support (189,000) (1 .0) - Econ & Cultural Dev --- Citywide (152,000) -- Subtotal $ (612,000) (3.0) (3.0) Transfers (320,000) -- Total $ (932,000} (3.0} (3.0} Internal Service Funds (30,000) -- Enterprise Funds (196,000) (12.0) 8.0 GRAND TOTAL $ (1 ,158,000} (15.0} 5.0 Despite the dramatic impact of five years of reductions due to property tax reform exacerbated by a dramatic downturn in property values and dramatic increases in pension costs, the Proposed Work Plan and Budget preserves benefits specifically for City of Miami Beach residents, including: • Our free "Culture in the Parks" series; • Access to free cultural arts programs (theater, dance, music and visual arts) for children involved in after school and summer camps; • Scholarship specialty camps in the summer, in addition to children participating in day camps; and programs for traveling athletic leagues. • Free access to City pools on weekends and during non-programmed hours; • Free general admission to our Youth Centers on weekends and during non-programmed hours; • Free Learn-to-Swim programs for 3 to 4 year old residents; • Reduced resident rates for recreation programs • Free "family friendly" Movies in the Park; • Free admission to museums on Miami Beach, including the Bass and Wolfsonian Museums every day and the Jewish Museum on Wednesdays, Fridays and Saturdays; 63 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 16 • Free access to the majority of our senior citizen programs and special populations programs, including several free dances that take place throughout the year; • Free of charge play at the Par 3 golf course for all residents; • Free crime analysis of residents' homes by our Police Department; and • Free child safety seat checks by our Fire Department. We have also prioritized Key Intended Outcomes to ensure the long-term sustainability of our City government, including improved communications with our residents, ensuring financial sustainability and ensuring that we have the best possible employees to deliver services to our community. ENVIRONMENTAL SUSTAINABILITY, COMMUNICATIONS, CUSTOMER SERVICE AND INTERNAL SUPPORT FUNCTIONS Regarding environmental sustainability, the City established a permanent committee in FY 2007/08 called the Sustainability Committee, with the objective of providing a mechanism to discuss green (environmental) issues of concern to the community. In FY 2011/12, based on recommendations from the Sustainability Committee, the City implemented a recycling ordinance. The FY 2012/13 budget includes funding for an intensive education and outreach campaign and after six months, beginning in January 2013, warnings will be issued. The sustainability Officer will be responsible for conducting outreach, recycling guidance, and if necessary, issue warnings. Once the recycling program has been implemented, the Sustainability Officer can address other sustainability issues (greening restaurants, etc. Administration will go back to the Commission before issuing any fines. This enhancement has been funded from the Waster haulers Additional Services Public Benefit Fund. To promote transparency of City operations and strengthen internal controls, the City has posted on- line all expenditures and Committee referrals and, in FY 2009/10, the City also began posting on- line Internal Audit and Performance Improvement reports. The Proposed Work Plan and Budget provides funding for initiative that will help strengthen our internal controls and help promote transparency, including funding for a review/audit of one area of the city's operations per year, beginning to restructure the Internal Affairs division in the Police Department with the conversion of a supervisor position to become permanently assigned to the division rather than rotating personnel for this position, and by providing Automated Vehicle Locator (AVL) technology in Parks and Recreation vehicles, additional Fire Department vehicles, and Public Works General Fund vehicles. Proposed revenue enhancement initiatives include the purchase of grants research software to be used by six city departments and the addition of a full-time leasing specialist to help manage leases in the City as lease revenues have grown from $3.4 million to $5.4 million in the last 3 years. The Proposed Work Plan and Budget continues funding to enhance communications with our residents, enhance the availability of city services and processes that can be accessed and transacted via the internet, and preserve our technology infrastructure. To that end, the Proposed Work Plan and Budget continues to fund the City's MB Magazine, and MB TV. 64 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 17 Further, the Proposed Work Plan and Budget includes a $0.4 million transfer to the Information and Communications Technology Fund. Projects to be funded in FY 2012/13 include: • Technology Enhancements for New Accela Permitting System: replaces or enhances the ticketing, queuing and calling system for the permit application and walk-thru plan review process. Includes portable printers for inspectors and Code Compliance Officers, a payment kiosk for the Code Compliance Division. Includes an improved plans management and tracking system and a mechanism to obtain feedback on the Accela Citizen Access portal. • Enhancement to Eden Accounts Payable module: will allow documents to be attached to invoices providing easy acc3ess to backup information and eliminating the need for departments to maintain multiple copies of the same document. _Upgrade of Automated Cleanliness Assessment: to streamline the workflow and process with a new user interface for field data collection, allowing direct data upload into the cleanliness database and generation of reports from the central database. • Off-Duty Job Tracking Application replaces the existing outdated application at the Police Department with a program that can interface with the City's payroll system, which will streamline the process of processing off-duty pay. • Development of Mobile Applications: recommended by the City focus group Technology Charette: for development of mobile applications such as Report It! And a parking application to locate garages with available parking. • License Plate Recognition: (Funded by the Police confiscation Fund and the Parking Fund) includes the purchase of two mobile Automatic License Plate Reader systems to enhance public safety and crime prevention efforts. The Parking Department is pursuing the same technology for its parking payment system. • Gated Revenue Control System Upgrade: (Funded by the Parking Fund) includes centralized processing of all data for all of the City's parking garages with a central monitoring station. The work will be completed in three phases. • Master Meter Replacement: (Funded by the Parking Fund) will purchase and install 750 new multi space pay stations for on-street and off-street parking locations. This will replace 500 existing pay stations and expand the use of pay stations in Middle and North beach. • There are other projects that do not require funding but are planned to be under development next year with in-house staffing resources: re-writing of the pending City Commission documents log and lobbyist and board and committee programs, in the Office of The City Clerk, complete a historic buildings database and GIS map and provide hotel and restaurant information for the Visitor and Convention Authority (VCA) for the development of a visitor information website and data aggregation portal. In FY 2005/06, the City established a financial goal of funding at least 5% of the General Fund operating budget as transfers for capital projects and capital projects contingency. The purpose of this goal was multi-faceted: 1. To provide flexibility in the operating budget that would allow the budget to be reduced without impacting services during difficult economic times; 2. To ensure that the City funded needed upkeep on our General Fund facilities, and right-of- way landscaping, lighting, etc. 65 FY 2012/13 Proposed Work Plan and Budget Message September 1 2, 201 2 Page 18 3. To provide a mechanism to address additional scope of small new projects prioritized by the community and the Commission instead of having to delay these for a larger General Obligation Bond issue; and 4. To provide contingency funding so that projects where bids were higher than budgeted did not have to be delayed, especially during a heated construction market where delays often lead to further increases in costs. In recent years this funding was dramatically reduced due to funding constraints, and at the same time, reflecting declines in construction industry pricing in those years. The Proposed Work Plan and Budget incorporates an increase of 0 .5% from 1% in FY 2011/12 bringing the total to almost 1.5% in FY 2012/13 for capital components, GENERAL FUND FINANCIAL SUMMARY The General Fund is the primary source of funding for the majority of City services. Revenues are derived from ad valorem property taxes, franchise and utility taxes, business license and permit fees, revenue sharing from various statewide taxes, user fess for services, fines, rents and concession fees and interest income. Additionally, intergovernmental revenues from Miami-Dade County and Resort Taxes contribute funding for tourist-related activities provided by General Fund departments. The first step in preparing the FY 2011/12 budget is an evaluation of Current Service Level (CSL) revenues and expenditures. CSL revenues represent the amount of revenues that would be generated based on existing tax rate, fees and charges. CSL expenditures represent the expenditures associated with providing the same level of service next year as in the current budget year. ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH On July 1, 2012, the City received the "2012 Certification of Taxable Value" from the Property Appraiser's Office stating that the taxable value for the City of Miami Beach is $23,072,321,980 including $96,864,87 4 in new construction. The preliminary 2012 value represents an increase of $ 1.1 billion or 5.0 percent more than the July 1, 2011 Certification of Taxable Value of $21,978,289,928, and an increase of 5.0 percent excluding new construction. The comparative assessed values for the Miami Beach Redevelopment Agency City Center redevelopment district increased from $3,423,353,944 to $3,608,71 8,451, an increase of $0.1854, billion or a 5.4 percent increase in values over 2011 certified values. In addition, assessed values within the geographic area formerly known as the South Pointe redevelopment district increased from $3,446,036,913 to $3,618,097,360, an increase of $0.172 billion, or a 5 percent increase in values over 2011 certified values. As a result, taxable values in the areas outside the City Center RDA/South Pointe area increased by 4.9 percent, from $15.1089 billion to $15.8455 billion, an increase of $0.7366 billion. 66 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 19 Citywide values excluding City Center increased from $18.555 billion to $19.463 billion, an increase of $0.9086 billion or 4.9 percent. Values outside the City Center area determine General Fund revenues. COMPARATIVE ASSESSED VALUES (in billions) 1 Jan. 1 LUI L Value (in Change from 201 1 Jan. 1 201 1 Value (in billions) billions) Value (Budget) AS ot July I Kev•sea AsotJuy 2011 Value (For 2011 (For FY FY Change in (For 2011/12 2011/12 2011 2011/12 $ Budget) Projection) Values %Chg. Budget) (in billions) % Chg RDA-City Ctr $ 3.4234 $ 3.1299 $ (0.2935) -9% $ 3.6087 $ 0.1854 5.4% South Pointe * 3.4460 3.2393 (0.2067) -6% 3.6181 $ 0.1721 5.0% General Fund excl S.Pte 15.1089 14.3860 (0.7229) -5% 15.8455 $ 0.7366 4.9% Total Citywide $ 21.9783 $ 20.7552 $ (1.2231) -6% $ 23.0723 $ 1.0940 5.0% Citywide Net of City Ctr -5% $ 18.555 $ 17.625 $ (0.930) $ 19.464 $ 0.9087 4.9% * Revised values for South Pomte not avmlable, but are assumed to be impacted by the same percentage as citywide. Value of One Mill The first building block in developing a municipal budget is the establishment of the value of one mill of taxation, wherein the mill is defined as $1 .00 of ad valorem tax for each $1,000 of property value. For the City of Miami Beach, this value for each mill is determined by the 2012 Certification of Taxable Value and has been set at $23,072,322. Florida Statutes permit a discount of up to five percent for early payment discounts, delinquencies, etc. Therefore, the 95 percentvalueofthe mill is $21,918706. Impacts of Declines in Property Values In FY 2011/12, the operating millage rate for general City operations was adopted at 6.1655. Based on the July 1, 2012 Certification of Taxable Value, 6.1655 mills would generate approximately $ 135,139781 in general tax revenues, an increase of $6A07,992 over FY 201 1/12 budgeted property tax revenues Citywide (General Fund, City Center RDA and the South Pointe area). The General Fund property tax revenues will increase by $5.76 million, if the FY 2011/12 millage rate is maintained. Further, the January, 1 201 1 tax roll Citywide declined by $1 .2 billion between the July 1, 2011 valuation and the July 1, 2012 valuation due to appeals, adjustments, etc., which is part of the reason that the FY 2012/13 "roll-back rate" is significantly less than the FY 2011/12 current millage rate. The area outside of City Center RDA declined by almost $1 billion. 67 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 20 State Legislated Operating Millage Requirements Further, pursuant to recently enacted State legislation, the City may elect to approve millage rates above the roll-back rate up to the constitutional cap of 1 0 mills subject to the following votes by the Commission or referendum: • Option 1: A majority of the Commission is required to approve a millage up to 8.0844 (equivalent to 100.447% of prior year maximum ad valorem proceeds allowed by a majority vote, net of the impact of the Tax Increment Districts). The adjustment of 100.447% reflects the statewide per capita personal income increase for the prior year • Option II: A two-thirds approval (5 of 7 votes) of the Commission is required to approve a millage up to 8.8928 (equivalent to a 1 0% increase in the ad valorem revenues above Option 1). • Option Ill: A unanimous approval of the Commission or referendum is required to approve a millage above 8.8928 up to the 10 mill cap Determining the Voted Debt Service Millage Levy The general obligation debt service payment for FY 2012/13 is approximately $5.9 million. Based on the July 1, 2012 Certified Taxable Value from the Property Appraiser, these bonds would require the levy of a voted debt service millage of 0.2568 mills. This represents a decrease of 0.0316 mills. Combining the Operating and Voted Debt Service Millage Levy Illustrated below is a comparison of the combined millage rates and ad valorem revenues to the City of Miami Beach for FY 2011/12 (final) and FY 2012/13 (preliminary) including RDA. It is recommended that in the General Fund, 0.1 083 mills of the total operating millage continue to be dedicated to renewal and replacement. % lnc/(Dec} From From FY City of Miami Beach Millage Rates FY 06/07 FY 11/12 FY 12/13 lnc/(Dec) FY10/11 06/07 Operating 7.1920 6.0572 6.0039 -0.0533 Capital Renewal & Replacement 0.1820 0.1083 0.1083 0.0000 Sub-total Operating Millage 7.3740 6.1655 6.112t' ·0.0533 -0.9% -17% Debt Ser\ice 0.2990 0.2884 0.2568 -0.0316 Total 7.6730 6.4539 6.3690 ·0.0849 -1.3% -17% 68 FY 2012/13 Proposed Work Plan and Budget Message September 12,2012 Page 21 If these recommended millage rates are tentatively adopted, then the City of Miami Beach's total operating millage will decrease by .0533 from the current year, and the voted debt service millage will decrease by 0.0316 mills. This represents a total decrease of 0.0849 mills. Impact on Homesteaded Properties Amendment 10 to the State Constitution took effect on January 1, 1995 and limited the increase in assessed value of homesteaded property to the percentage increase in the consumer price index (CPI) or three percent (3%), whichever is less. For 2011, the CPI has been determined to be 3.2 percent and therefore, the increase is capped at 3% for increased values as of January 1, 2012. Overall, based on an analysis of the homesteaded properties in the 201 0 tax roll (the latest available from the Miami-Dade County Property Appraiser at this time), the median value of homesteaded property in Miami Beach for 201 2 (as of August 2011) was $11 9 ,461, and the average $277,201 . Applying the increase to the market value of all existing homesteaded properties from the 2011 tax roll, and the 3 percent CPI adjustment, the impact of the millage rate adjustment to homesteaded properties would be as shown in the following table. Homesteaded Properties FY 2011/12 (as of January 1 2011 )* with 3% CPI Median Average Median Average Taxable Value $ 119,461 $ 277,201 $ 123,045 $ 285,517 City of Miami Beach Taxes Operating $ 737 $ 1,709 $ 752 $ 1,745 Voted Debt 34 71 32 73 Total Miami Beach $ 771 $ 1,780 $ 784 $ 1,818 $ Change in Taxes Operating $ 15 $ 36 Voted Debt (2) 2 Total Miami Beach $ 13 $ 38 *Source: Miami-Dade County Property Appraiser File as of 8/17/10 Overlapping Jurisdictional Operating and Debt Service Millages City of Miami Beach property owners must also pay property taxes to Miami-Dade County, the Miami-Dade County School Board, the Children's Trust, the South Florida Water Management District, and the Florida Inland Navigation District. The countywide tax rate for Miami-Dade County is proposed to decrease from 4.8050 mills to 4.7035 mills; the library tax rate is proposed to decrease from 0.1795 mills to 0.1725 mills; and the debt service millage stayed the same at 0.2850. 69 FY 2012/13 Proposed Work Plan and Budget Message September 12,2012 Page 22 The proposed tax rate for the Miami-Dade School District is 8.0050; 0.2440 mills less than the prior year millage of 8.2490. The Children's Trust millage is maintained at 0.5 mills. The proposed tax rate for the South Florida Water Management District is 0.3928; which is the same as the current year. The proposed tax rate for the Florida Inland Navigation District is 0.0345; unchanged from the FY 2010/11 millage. With the Proposed millage rates for FY 2012/13, the Miami Beach portion of the FY 2012/13 tax bill is approximately 31 percent of the total bill. Of note, even with the recently proposed millage decreases by the County, the County millage is 7.2 mills less than their millage in FY 2006/07, as compared to the City's proposed millage which is 7.3 mills less than the City millage in FY 2006/07. Further, the School Board millage is only minimally below the FY 2006/07 millage rate, despite the recently proposed decrease. The significant difference in the total overlapping millage rate is a direct result of the City's effort to keep the millage rates as low as possible A summary of the tax rate changes is provided in the following table. %ofFY Variance Variance 12/13 OVERLAPPING TAX MILLAGE FY 06/07 FY11/12 FY 12/13 from 11/12 from 06/07 Total City of Miami Beach Millage Rates Operating 7.1920 6.0572 6.0039 -0.0533 -1.1881 Capital Renewal & Replacement 0.1820 0.1083 0.1083 0.0000 -0.0737 Subtotal Operating Millage 7.3740 6.1655 6.1122 -0.0533 -1.2618 Voted Debt Service 0.2990 0.2884 0.2568 -0.0316 -0.0422 Total 7.6730 6.4539 6.3690 -0.0849 -1.3040 31% Miami Dade County Countywide 5.6150 4.8050 4.7035 -0.1015 -0.9115 Library 0.4860 0.1795 0.1725 -0.0070 -0.3135 Debt Service 0.2850 0.2850 0.2850 0.0000 0.0000 Subtotal 6.3860 5.2695 5.1610 -0.1085 -1.2250 25% School Board 8.1050 8.0050 8.0040 -0.0010 -0.1010 39% Children's Trust 0.4220 0.5000 0.5000 0.0000 0.0780 2% Other 0.7360 0.4708 0.4634 -0.0074 -0.2726 3% Total 23.3220 20.6992 20.4974 -0.2018 -2.8246 100% 70 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 23 Impact of Combined Tax Rates of Overlapping Jurisdictions on Homesteaded properties Applying the proposed millage rates to the median and average January 1, 201 1 taxable values of $119,461 and $277,201, respectively, half of the homesteaded properties would pay less than $2,478 for all taxing jurisdictions combined, while the average taxes generated would be approximately $5,753 per homesteaded property. Of these taxing jurisdictions, the highest component is the Miami-Dade School Board, at $956 for a median value property, and $2,219 for an average valued property. The following table provides examples of changes in property taxes for homesteaded properties as a result of these declines in values, using the proposed tax rates and potential changes from 2010 values. Impact on Homesteaded Properties Assuming Changes in Taxable Value from .January 1, 2012 FV 2011/12 (as of .January FV 2012/13 1 2011)* with 3% CPI Median I Average Median I Average 201 0 Taxable Value $ 119,461 $ 277,201 $ 123,045 $ 285,517 City of Miami Beach Operating $ 743 $ 1,723 $ 752 $ 1,745 Voted Debt $ 34 $ 80 $ 32 73 Total Miami Beach $ 777 $ 1,802 $ 784 $ 1,818 Miami Dade County $ 735 $ 1,707 $ 635 $ 1,473 Schools $ 985 $ 2,287 $ 984 $ 2,284 Other $ 138 $ 321 $ 119 $ 275 Total $ 2,635 $ 6,117 $ 2,522 $ 5,850 Change in Taxes City of Miami Beach Operating $ 9 $ 22 Voted Debt $ (2) $ (7) Total Miami Beach $ 7 $ 16 Miami Dade County $ (100) $ (234) Schools $ (1) $ (3) Other $ (19) $ (46) Total $ (113) $ (267) As with the City of Miami Beach millage rates, impacts of the combined jurisdictional millage rates for non-homesteaded properties will likely reflect declines in property values, although individual properties may vary. GENERAL FUND CURRENT SERVICE LEVEL INITIAL BUDGET GAP General Fund Revenues On the revenue side for FY 2012/13, based on the July 1, 2012 Certification of Taxable Value from the Miami-Dade County Property Appraiser, values of existing properties increased by 5 71 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 24 percent from the July 1, 2011 tax roll certification. This increase compares to taxable value increases of at least 8 percent per year from July 1, 2001 through July 1, 2007, but decreases of an average of 6.4% per year belween FY 2008/09 and FY 2011/12. In total, Current Service Level (CSL) revenues are expected to increase by $8.4 million for FY 2012/13, principally due to an increase of $4.3 million property tax as a result of higher property value, $2.2 million in carry forward of a one-time pension credit from FY 2011/12 as well as $3.3 million in increased licenses and permits revenue, reflecting the increases in building development activity. These increases are offset by decreases across a number of categories. These decrease include decreases in the following categories: other taxes due to declining telephone utility tax revenue, intergovernmental revenue due to trends in gas tax revenue and revenues received for 911 costs which have been moved to a separate fund, charges for services due to fire transport fees, fines & forfeits due to lower than expected red light camera revenue, investment interest due to market conditions, and decreases in the miscellaneous revenue category due to corporate sponsorship one-time signing bonus revenue in FY 2011/12. The total CSL revenue estimate at this time is $252.7 million, an increase of $8.4 million from the FY 2011 /1 2 adopted budget. ... ·. < ·.·· •...•.•. ···~ :. <L • ... F~2~~;~}1~· • • ... •. •. F¥2o12i13: •·o/Joft=V .. lti<;l(Q~Q}ov~r X '""' • ...... .c.c ·····~/. :> L:{ ;.>\~.~f3:~i·~··} :~d1~13. · FY 2011112 .·· .· ... •. ~ ·•··. .... t<~ven.1.1e~ · .. sil~~~t? <. · ··~$[;·· ...... J::tifilt e~d.g¢t ,, <-'••>"'··"' ' Operating Millage Property Tax Citywide 98,198,923 102,042,000 40% 3,843,077 Property Tax South Pointe 10,439,424 10,850,000 Capital Renewal/Replacement 1,755,752 1,825,000 1% 69,248 Normandy Shores 108,469 129,000 0% 20,531 Subtotal 11 0, 502,568 114, 846, 000 45% 4,343,432 Other Taxes 24,278,385 24,023,000 1% (255,385) Licenses & Permits 17,074,053 20,328,000 8% 3,253,947 Intergovernmental Revenue 10,091,000 9,827,000 4% (264,000) Charges for Services 4,879,252 4,458,000 2% (421 ,252) Golf Courses 5,805,119 5,979,000 2% 173,881 Fines & Forfeits 2,574,000 2,192,000 1% (382,000) Interest 3,430,000 2,983,000 1% (447,000) Rents & Leases 6,034,143 6,439,000 3% 404,857 Miscellaneous 12,423,449 11,830,000 5% (593,449) Other-Resort Taxes 26,965,440 26,965,000 11% (440) Other -Reserves -Bldg Dept 1,546,709 1,500,000 1% (46,709) Other -parking Surplus Transfer 7,200,000 7,200,000 3% - OTHER-Prior Year Setaside 3,551,120 3,400,000 1% (151,120) Prior Yr Set Aside Pension Credit -2,210,000 1% 2,210,000 All Other 7,981,502 8,532,000 3% 550,498 subtotal 133,834,172 137,866,000 55% 4,031,828 Total $ 244,336,740 $ 252,712,000 100% $ 8,375,260 72 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 25 GENERAL FUND CURRENT SERVICE LEVEL EXPENDITURES On the expenditure side, CSL expenditures typically have increased between 6% and 8% annually due to salary and benefit increases and other normal cost of living adjustments. In FY 2012/13, increases are estimated to result in an approximately $11 .2 million (4.6%) increase in expenditures, the majority of which is due to the following: • A $1 .4 million increase to reflect previously bargained salary adjustments for employees, including the impact of 5% step increases for employees not at the maximum of their range in the FOP and IAFF bargaining units; and a maximum of 2 percent performance-based merit increase for employees in the Government Supervisor's Association (GSA) bargaining unit, the American Federation of State, County and Municipal Employees bargaining unit (AFSCME) and unclassified employees. There is no COLA included for any employees nor are there merits for CWA employees consistent with the status quo of their current agreement. • A $0.2 million increase primarily due to Fire Department overtime cost, although the Fire Department overtime budget is projected at a level below prior year actual costs. • A $5.7 million increase in pension plan contribution costs which will be partially offset in FY 2011/12 by the carryforward of year end fund balance due to a one-time credit of $2.2 million ($2.5 million city wide), as well as $0.1 million increases in other pension costs. • A $1 .6 million increase in health care costs which reflect both an anticipated 10% increase in health insurance costs as well as the impact of the expiration of the IAFF and FOP 5 percent of salaries to reduce city health costs. • A $0.3 million increase in Other Benefits, primarily due to leave payouts associated with employees leaving employment with the City. • A $3.2 million Increase in Internal Service Fund charge-backs to Departments primarily due to similar increases in salary and pension costs as described above that are then charged back to the General Fund, as well as equivalent increases in health insurance costs for retirees, increases in Police liability claims and increases in debt service for fleet vehicles. It is important to note that fuel prices in FY 2012/13 are budgeted at current prices. Should prices increase further, the General Fund will need to fund these increases. • A $1.7 million decrease in other operating costs primarily due to the offsetting move of 911 expenditures to a separate fund, decreased rent as Fire Prevention is now in a city facility, decreased copier rental costs associated with the new contract, energy and maintenance savings anticipated from initiatives implemented by Amaresco, as well as continued refinement and efficiencies in operating needs. • A $.3 million increase in capital costs due to increased transfers to the Renewal and Replacement Fund as a result of the increased values and the dedicated millage, as well as increases in debt service resulting from off-setting debt related to the Amaresco initiative. 73 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 26 ,, ·, , .•• , •. ,,·.. <. , .... ''··' ,:a;~~o;a.~-t~ .:.:,o/cJ.of~¥ Jnol(P&e}ovE)r ,,·,,. '· · .,., .• 1 '~v8\20•. ud., •..•. 1.~1 .• e·.·.,.~.•t1.; .. ~~. ·i;', ,· , · ;. c8i. {~z2.~: .•. u.,.c'.' .. 1.····S2 .... f ...... ·.l· ,'~. :.,.!., .•• tya·········21'.:.o8,·:·1 0 '1.'d11 9 2e· ···t> Salaries Overtime/Other Wages Benefits Pension -F&P Pension-MBERP Other Pension Costs Health and Life Other Benefits Total Benefits Total Salary and Benefits Operating Internal Service Funds Capital & Debt Total c'·.<· • ·. • . . . · .. · ~ , . · ; ~~il.l~lg~t . . . .·. """ .... . .·· .. ·. . , .. . $ 101,126,813 $102,540,000 40.1% $ 1,413,187 10,419,043 10,658,000 4.2% 238,957 35,602,142 38,532,000 15.1% 2,929,858 10,964,684 13,756,000 5.4% 2,791,316 5,802,867 5,913,000 2.3% 110,133 9,147,658 10,782,000 4.2% 1,634,342 4,043,146 4,333,000 1.7% 289,854 65,560,497 73,316,000 28.7% 7,755,503 177,106,353 186,514,000 73.0% 9,407,647 26,983,687 25,300,000 9.9% (1 ,683,687) 36,131,881 39,312,000 15.4% 3,180,119 4,114,819 4,447,000 1.7% 332,181 $ 244,336,7 40 $ 255,573,000 100% $ 11,236,260 The resulting gap between General Fund CSL expenditures and CSL revenues 1s approximately $2.9 million. It is important to note that operating costs are approximately $1.7 million less than the FY 2011/12 budget, reflecting the continuation of various cost savings initiatives by the City such as re-bidding contracts, and careful review of department line item expenditures. Together, salaries and fringe represent 73 percent of CSL costs, with salaries and pension representing approximately 67 percent of the total current service level (CSL) budget of $255.6 million, (including the impacts of merit/ steps increases, pension contributions, etc.) APPROACHES TO BALANCE Based on direction provided by the Finance and Citywide Projects Committee meetings in July and August 2012, the approximately $2.9 million shortfall between Current Service Level revenues and expenditures has been addressed through employee givebacks of $2.6 million, which partially offsets the additional employee health and pension cost .. The total cost of additions and service enhancements in the General Fund ($3 .7 million) has been more than offset by departmental efficiencies, an additional resort tax transfer, and revenue enhancements, resulting in a surplus of $1 .1 million to be used as a set aside for the FY13/14 budget, to offset the loss of the one time carryforward of the $2.1 million FY 2011/12 pension credit savings to FY 2012/13. 74 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 27 The resulting total Proposed General Fund Operating Budget for FY 2012/13 is$ $256,975,000, which is $12.6 million or 5 percent more than the FY 2012/12 Adopted Budget of $244,336,7 40. Proposed CSL Budget Revenues $ 252,712,000 Expenditures $ 255,573,000 Net CSL Gap $ (2,861,000) :-:~; .. -.:_ ,_. _:,~: ~ ::·:; .<:.'-··. , r··;: :~.:·; .. ·· ·-~?<·~ .: .··:~·::·<·\, .. : · . ··;;,.>(:: .:·,::0.:.:~·~ ~ :.:~~::\ ~:.~ S: .;~-~:\· :.~,::~ : .. :: :~~~ <-::·:~::~:::.::;~ .. :.:.~ ~: .~ ;~/:.;~:,:::·'3;··\· :}~:~:\~~;.~~~:a;~\~·:·:~.:·.~{~,:::· .;_:F: :·::~.?<·~· .: } ,;0 :'.:' . $7.2 million in pension increases across all funds prior to a one time credit and $5.7 million in the General Fund. $1.9 million health increase citywide and $1.6 million in the General Fund, including the $.86 million impact of the expiration of the five percent of salaries giveback toward health insurance for Police and Fire General Fund Employee Givebacks Potential· A~ditional Changes in.E:xpendi~ures Living Wage FY2012/131ncrease Landscape Maintenance Impact of New Capital Projects Minimal Impact Reductions/Efficiencies Service Reductions Additions and Enhancements Additional Building Positions in Response to Increased Demand Enhancements for Internal Affairs and Ouside Audits Transfer to Pay As You Go Other Service Enhancements General Fund Impact of Change to Health Insurance Start Date for New Employees General Fund Impact of Internal Service Fund Enhancements $ Impact of Efficiencies/Enhancements $ Ottt.er ~~aqges in Revenues Resort Tax-Transfer to GF Additional CIP Chargeback Revenues Revenue Enhancements 75 Revised Net Gap $ $ $ $ $ Tot.al ~e.t StlrPI.us/Set A.Side $ ·· 2,600,000 (2,600,000) 62,000 81,000 (932,000) 702,000 200,000 1,400,000 1,253,000 (24,000) 134,000 2,876,000 (3,137,000) 4,000,000 263,000 4,263,000 1;c126,000 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 28 Options for Further Reducing the Millage An analysis was performed to determine what the impact on property tax revenue would be with further millage reductions. The following table illustrates the corresponding millage rate for reducing the operating property tax revenue by $1 million as well as the impact of reducing the millage to the roll-back rate. Proposed Proposed Proposed Proposed Proposed Proposed General Fund Renewal & Operating Debt Total Change In Millage Replmnt Millage Millage Millage Total Millage Revenue Impact Rate Rate Rate Rate Rate Rate Decrease of $1 million from GF revenue at proposed millage rate $ 1,000,000 6.0039 0.1083 6.1122 0.2568 6.3690 0.0533 Reducing millage rates would also impact revenues to the Redevelopment District by $180,000 and $1,640,000 respectively for the two scenarios. Enterprise Funds are comprised of Sanitation, Water, Sewer, Stormwater, Parking, and Convention Center Departments. The Proposed FY 2012/13 Enterprise Funds Budget is $161 .1 million. . This represents an increase of $4.4 million (2.8 percent) from the FY 2011/12 budget of $156.7 million, primarily due to: • increases in salary, pension and health cost similar to those described in the General Fund, although in 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 sewer revenues collected by the City • Increases in funding for future renewal and replacement projects and equipment which is determined by prior year depreciation amounts ($2.2 million) These increases area offset by decreases in debt service payments by the Stormwater Fund ($2 million)as the debt service for bonds sold in FY 2011/12 along with the associated refinancing of existing bonds resulted in lower than budgeted debt service costs; reduced operating costs in the Convention Center offset by reduced revenues due to an accounting treatment change of electrical revenues ($1 .2 million); reduced funding needed to be transferred for the Stormwater Rate Stabilization Fund ($1 million); and other miscellaneous reductions ($0.3 million).fee impact is 37 cents per household per month. 76 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 29 Internal Service Funds are comprised of the Central Services, Fleet Management, Information Technology, Risk Management and Property Management Divisions. The Proposed FY 2012/13 Internal Service Fund budget is $59.3 million. This represents an increase of $5.0 million (9.3 percent) from the FY 2011/12 budget, primarily due to increases in salary, pension and health cost similar to those described in the General Fund as well as increases in Police liability claims ($.75 millionL and debt service for replacement of vehicles and equipment ($1 .1 million). These costs are completely allocated to the General Fund and Enterprise Fund departments, and the Risk Management Fund reimburses the General Fund for the cost of legal services. ··.·I The Proposed FY 2012/1 3 Resort Tax budget is $54.2 million, an increase of $6.6 million ( 14 percent) from FY 2011/12. This reflects the continued increase in resort tax revenues, consistent with other tourism indicators throughout the County, but especially in Miami Beach. Of the $6.6 million increase: • $4 million is transferred to the General Fund for tourism-related services provided by General Fund departments for a total transfer of $30.47 million. • $0.72 million is used to increase funding for Memorial Day and Spring Break to levels deployed in FY 2011/12 as well as provide for enhanced holiday decorations • $0.05 million is for the contractual CPI adjustment in the transfer to the Greater Miami Convention and Visitors Bureau, for a total of $5.31 million. • $0.39 million and $0.30 million are transferred for quality of life capital projects and the arts and the Miami Beach Visitors Convention Authority based on funding formulas, for a total of $4.68 million and $2.11 million, respectively. The Debt service is increased by $0.38 million from $5.52 million to $5.90 million, and administrative expense are increased by $0.1 0 million Further, $100,000 continues to be funded for a Miami Beach marketing campaign and $83,000 for tourism related economic development activities in North Beach. In addition $148,000 was added in FY 2012/13 for a Washington Ave Tourism Enhancement Initiative; and $100,000 towards attracting a major event such as the Miss USA pageant and places $.48 million in contingency. Although the development of our budget this year has been challenging, through rigorous review and good leadership, the Proposed Work Plan and Budget for FY 2012/13 is balanced and enables the City of Miami Beach to continue delivering outstanding, enhanced services to our residents, businesses and visitors, providing fee relief in our Enterprise Funds, and continuing structural enhancements to ensure the long-term sustainability of the City. 77 FY 2012/13 Proposed Work Plan and Budget Message September 12, 2012 Page 30 In summary, the Proposed FY 2012/13 General Fund operating budget maintains current service priorities for the community, despite property tax rates set at 1.3 mills (17 percent) lower than FY 2006/07. Further, I am also recommending keeping water, sewer, and stormwater rates flat, other than the sewer pass through for increases in the Miami-Dade County wholesale sewer rate. The development of this year's Proposed Work Plan and Budget has challenged our City staff and the Commission as we sought to balance a budget in spite of high pension increases, particularly in the Fire and Police Pension system, as well as a significant increase in health insurance. I would like to thank Mayor Matti Herrera Bower, and the Members of the Miami Beach City Commission, for your continued guidance, support and leadership with the budget process and in helping to accomplish so much on behalf of our residents and for the entire Miami Beach community. I would also like to recognize those bargaining units that previously agreed to employee "give-backs" so that we can begin to control personnel costs as well as our employees for their continued commitment to the City's mission of providing excellent public services and working so hard to help accomplish so many positive results that benefit the entire community despite the challenges and uncertainty of the past several months. Finally, I would like to thank all staff from throughout the City who worked so hard to identify every opportunity for cost reductions in their departments, as well as itemize alternatives with a wide range of service impacts to meet the required cost reductions. I would particularly like to thank my Assistant City Managers, Chief Financial Officer, and all Department and Division Directors. I appreciate all of us working together towards a reduced budget that still allows us to accomplish our goals. In particular, I would like to recognize and thank Tim Finch, Budget Officer; Dr. Leslie Rosenfeld, Director of Organizational Development, Georgette Daniels, Glen Hall, T ameka Otto- Stewart, and Paula Rodriquez, Management and Budget Analysts; and Office Associate Jennifer White. Respectfully submitted, Kathie G. Brooks Interim City Manager 78 .. . . . . c, g AT T A C H M E N T A · FY 20 1 2 1 1 3 BU D G E T · PR I O R YE A R RE D U C T I O N S , PR E L I M I N A R Y CS L PR E L I M I N A R Y CS L IN C L U D E S 10 % In c r e a s e in He a l t h In s u r a n c e Do e s no t in c l u d e in c r e a s e s to li v i n q wa q e 5- Y e a r Pr i o r Re d u c t i o n s (A d j u s t e d Fo r FY 20 1 0 / 1 1 PL A N B* ) PR O P O S E D FY 20 1 2 1 1 3 CS L CS L Bu d g e t Pr i o r to Pe n s i o n an d In t e r n a l Se r v i c e Ad j u s t m e n t s $ Im p a c t / % o f Ad j u s t e d FY Po s i t i o n s / % o f Ad j u s t e d (r o u n d e d to th e 20 1 0 / 1 1 Bu d g e t FY 20 1 0 / 1 1 Bu d g e t FY 20 1 1 1 1 2 Ad o p t e d Bu d et OO O " s ) $ ch a n o e % C h g Ge n e r a l Fu n d Pr i o r to Pe n s i o n an d In t e r n a l Se r v i c e Ad ' u s t m e n t s $' s % FT PT % $' s FT PT $' s $" s $' s M~_ c : > r & Co m m i s s i o n $ (1 4 2 , 8 0 1 ) -9 % -2 . 3 0. 0 -1 3 % $ 1, 5 8 3 , 4 4 8 18 . 6 $ 1, 6 3 9 , 0 0 0 $ 55 , 5 5 2 3. 5 % $ Ci t y Ma n a g e r $ 34 8 , 8 6 7 ) -1 5 % -3 . 3 0. 0 -3 4 % $ 2, 3 3 5 , 7 7 6 9. 7 $ 2, 3 8 8 , 0 0 0 $ 52 , 2 2 4 2. 2 % $ Co m m u n i c a t i o n s $ 36 7 , 8 5 9 ) -4 2 % -4 . 0 0. 0 -8 0 % $ 90 9 , 7 3 0 5. 0 $ 91 3 , 0 0 0 $ 3, 2 7 0 0. 4 % $ OB P I $ (2 9 8 , 4 4 9 ) -1 6 % -3 . 0 0. 0 -2 5 % $ 1, 9 1 7 , 1 3 6 12 . 0 $ 1, 9 5 1 , 0 0 0 $ 33 , 8 6 4 1. 8 % $ Fi n a n c e $ (5 8 8 , 3 2 1 ) -1 4 % -1 0 . 0 0. 0 -3 1 % $ 4, 2 7 5 , 2 8 4 32 . 5 $ 4, 2 5 5 , 0 0 0 $ (2 0 , 2 8 4 ) -0 . 5 % $ Pr o c u r e m e n t $ (1 2 7 , 4 0 5 ) -1 3 % -1 . 0 0. 0 -1 1 % $ 96 2 , 6 6 4 8. 0 1. 0 $ 1, 0 2 2 , 0 0 0 $ 59 , 3 3 6 6. 2 % $ Hu m a n Re s o u r c e s / L a b o r Re l a t i o n s $ (4 2 9 , 5 3 8 -2 5 % -5 . 5 1. 0 -2 9 % $ 1, 7 7 2 , 3 5 8 21 . 0 1. 0 $ 1, 7 9 8 , 0 0 0 $ 25 , 6 4 2 1. 4 % $ Ci t y Cl e r k $ (7 9 , 8 9 9 ) -5 % -1 . 4 0. 0 -1 5 % $ 1, 5 6 0 , 1 7 8 9. 6 $ 1, 5 2 8 , 0 0 0 $ (3 2 , 1 7 8 -2 . 1 % $ Ci t y At t o r n e y $ (4 7 5 , 5 5 5 ) -1 2 % -3 . 3 -1 . 0 -2 3 % $ 4, 1 5 9 , 4 9 8 18 . 7 $ 4, 2 0 4 , 0 0 0 $ 44 , 5 0 2 1. 1 % $ Re a l Es t a t e , Ho u s i n g & Co m m u n i t y De v $ 28 1 , 9 1 0 -1 4 % -4 . 0 0. 0 -4 0 % $ 2, 1 7 1 , 7 6 9 17 . 1 $ 2, 3 7 4 , 0 0 0 $ 20 2 , 2 3 1 9. 3 % $ in c l . Co m m u n i t y Se r v i c e s ) Bu i l d i n g $ (6 0 1 , 1 6 5 ) -6 % -8 . 0 0. 0 -1 1 % $ 9, 9 7 5 , 0 4 7 73 . 0 $ 10 , 0 6 5 , 0 0 0 $ 8 9 , 9 5 3 0. 9 % $ Pl a n n i n g $ (3 1 0 , 3 5 1 ) -1 0 % -4 . 0 0. 0 -1 6 % $ 3, 1 8 7 , 3 3 3 25 . 0 $ 3, 3 6 6 , 0 0 0 $ 17 8 , 6 6 7 5. 6 % $ TC D $ (5 5 0 , 9 0 0 -2 1 % -2 . 0 0. 0 -1 5 % $ 2, 4 2 6 , 9 2 5 5. 5 $ 2, 5 1 1 , 0 0 0 $ 84 , 0 7 5 3. 5 % $ Co d e Co m p l i a n c e $ 84 3 , 8 2 7 ) -2 0 % -1 3 . 0 3. 0 -2 1 % $ 4, 3 5 5 , 4 9 1 37 . 0 2. 0 $ 4, 4 5 4 , 0 0 0 $ 98 , 5 0 9 2. 3 % $ Pa r k s & Re c r e a t i o n (i n c l u d i n g Go l f co u r s e s $ (2 , 9 0 0 , 7 4 3 -1 0 % -2 7 . 0 -2 6 . 0 -1 8 % $ 28 , 0 9 2 , 8 3 5 17 3 . 0 1 3 4 . 0 $ 27 , 8 5 6 , 0 0 0 $ (2 3 6 , 8 3 5 ) -0 . 8 % $ Pu b l i c Wo r k s $ 1, 4 4 6 , 5 3 5 -2 3 % -1 7 . 5 0. 0 -4 2 % $ 6, 3 7 8 , 0 9 3 41 . 4 $ 6, 3 7 3 , 0 0 0 $ 5, 0 9 3 -0 . 1 % $ CI P $ (_ 6 3 , 8 6 3 ) -1 % 1. 0 0. 0 3% $ 4, 7 4 4 , 0 9 4 38 . 0 $ 4, 6 9 9 , 0 0 0 $ (4 5 , 0 9 4 ) -1 . 0 % $ Po l i c e $ 5, 2 6 6 , 9 0 1 ) -6 % -6 2 . 0 1. 0 -1 2 % $ 91 , 9 9 2 , 5 4 1 50 8 . 0 14 . 0 $ 93 , 0 8 8 , 0 0 0 $ 1, 0 9 5 , 4 5 9 1. 2 % $ Fi r e $ (2 , 3 6 8 , 1 9 4 ) -4 % -7 . 0 0. 0 -2 % $ 58 , 9 4 2 , 3 9 1 30 3 . 0 48 . 0 $ 59 , 8 6 6 , 0 0 0 $ 92 3 , 6 0 9 1. 6 % $ Ci ~ d e $ (1 , 6 8 9 , 5 4 4 -1 5 % 0. 0 0. 0 0% $ 10 , 0 4 1 , 0 1 2 $ 9, 6 3 7 , 0 0 0 $ (4 0 4 , 0 1 2 ) -4 . 0 % - - - - - - - _ _ Su b t o t a l _ L _ (1 9 , 1 ! J b 6 2 7 ) -8 % __ _ - 1 _ 7 7 . 4 -2 2 . ( ! _ -1 3 % $ 24 1 , 7 8 3 , 6 0 3 13 5 6 . 0 20 0 . 0 $ 24 3 , 9 8 7 , 0 0 0 $ 2, 2 0 3 , 3 9 7 0. 9 % $ Ge n e r a l Fu n d Tr a n s f e r s $ Ca p i t a l Re s e r v e $ (2 , 5 0 0 , 0 0 0 ) $ $ $ - Pa y - A s - Y o u - G o Ca p i t a l $ (7 , 5 0 0 , 0 0 0 ) $ $ $ - In f o & Co m m . Te c h Fu n d $ 71 4 , 1 1 5 ) $ 60 0 , 8 8 5 $ 60 1 , 0 0 0 $ 11 5 0. 0 % C< l j l i t a l l n v e s t m e n t Uo k e e p Ac e ! $ (1 , 6 1 8 , 0 0 0 $ 19 6 , 5 0 0 $ 21 9 , 0 0 0 $ 22 , 5 0 0 11 . 5 % Re n e w a l an d Re p l a c e m e n t Fu n d $ 1, 0 5 6 , 5 2 9 ) $ 1, 7 5 5 , 7 5 2 $ 1, 8 5 9 , 0 0 0 $ 10 3 , 2 4 8 5. 9 % Ho m e o w n e r s Di v i d e n d $ (4 , 9 0 0 , 0 0 0 ) $ Tr a n s f e r to Ri s k Fu n d $ (1 , 0 0 0 , 0 0 0 ) $ Tr a n s f e r to 11 % Re s e r v e $ (3 , 3 3 8 , 4 1 9 $ PR E L I M I N A R Y PE N S I O N IN C R E A S E ES T . Fi r e & Po l i c e $ 2, 9 2 9 , 0 0 0 $ 2, 9 2 9 , 0 0 0 MB E R P $ 2, 7 9 1 , 0 0 0 $ 2, 7 9 1 , 0 0 0 FY 2 0 1 1 / 1 2 Cr e d i t ($ 1 . 7 M F& P , $0 . 5 M MB E R P ) $ IN T E R N A L SE R V I C E FU N D S IN C R E A S E $ 3, 1 8 7 , 0 0 0 $ 3, 1 8 7 , 0 0 0 To t a l Ge n e r a l Fu n d l l $ (4 1 , 8 0 9 , 6 9 0 ) -1 8 % -1 7 7 . 4 -2 2 . 0 -1 3 % $ 24 4 , 3 3 6 , 7 4 0 13 5 6 . 0 20 0 . 0 $ 25 5 , 5 7 3 , 0 0 0 11 $ 11 , 2 3 6 , 2 6 0 4. 6 % $ . Ne i g b o r h o o d Se r v i c e s De p a r t m e n t wa s sp l i t in t o va r i o u s fu n c t i o n s an d si g n i f i c a n t l y re d u c e d in FY 20 0 7 / 0 8 - Ch a r t re f l e c t s re d u c t i o n s as pa r t of Co d e Co m p l i a n c e •• FY 20 1 0 / 1 1 Bu d g e t in c l u d e d re d u c t i o n s fo r co n t r a c t i n g ou t / c o n v e r t i n g po s i t i o n s to pa r t - t i m e , re s u l t i n g in $2 2 1 , 9 0 1 in de p a r m e n t Pl a n B sa v i n g s of f s e t by in c r e a s e d co n t i n g e n c y . Th e s e we r e no t im p l e m e n t e d an d th e FY 20 1 0 / 1 1 De p a r t m e n t bu d g e t ha v e be e n ad j u s t e d to re f l e c t th e im p a c t . CSL with Pension and Internal Service Internal Alloactions Addtl. Pe n s i o n Service (rounded to the Efficiency Al l o c a t i o n Allocations OOO"s) Reorg. Etc. $'s $'s 23 , 0 2 8 $ (4,889) $ 1,657,000 $ - 46 , 1 1 5 $ 29,558 $ 2,464,000 $ (132,000) 13 , 8 0 9 $ (27,167) $ 899,000 $ 41 , 8 3 5 $ 27,386 $ 2,021,000 $ 72 , 0 8 4 $ 133,085 $ 4,461,000 $ 51 , 1 8 2 $ 631) $ 1,073,000 $ 28 , 6 2 5 $ 16,228 $ 1,843,000 $ 22 , 7 0 8 $ 20,589 $ 1,572,000 $ 57,000) 10 8 , 0 9 1 $ 43,841 $ 4,356,000 $ 97 , 3 5 2 $ (32,918) $ 2,438,000 $ 19 7 , 7 5 5 $ 87,406 $ 10,350,000 $ 74 , 9 5 1 $ 9,520 $ 3,451,000 $ (1 5 , 5 2 4 $ (35,645) $ 2,460,000 $ 11 8 , 3 5 4 $ 87,877 $ 4,660,000 $ 38 6 , 3 7 8 $ 606,281 $ 28,849,000 $ (64,000) 11 8 , 9 0 4 $ 152,431 $ 6,645,000 $ (71,000) 14 0 , 2 3 1 $ 47,288 $ 4,886,000 $ 1, 6 4 7 , 9 4 6 $ 719,287 $ 95,455,000 $ (136,000) 2, 5 4 6 , 1 4 5 $ 849,682 $ 63,262,000 $ $ 457,491 $ 10,092,000 $ 152,000) 5, 7 1 9 , 9 6 9 II $ 3,186,700 $ 252,894,000 $ (612,000) $ 601,000 $ (320,000) $ 219,000 $ 1,859,000 5, 7 1 9 , 9 6 9 $ 3,186,700 $ 255,573,000 $ (932,000) 00 0 PR E L I M I N A R Y CS L IN C L U D E S 10 % In c r e a s e in He a l t h In s u r a n c e Do e s no t in c l u d e in c r e a s e s to li v i n g wa g e 5- Y e a r Pr i o r Re d u c t i o n s (A d ' u s t e d Fo r FY 20 1 0 / 1 1 PL A N B* ) PR O P O S E D FY 20 1 2 1 1 3 CS L CS L Bu d g e t Pr i o r CSL with Pension to Pe n s i o n an d and Internal In t e r n a l Se r v i c e Service Ad j u s t m e n t s Internal Alloactions Addtl, $ Im p a c t / % of Ad j u s t e d FY Po s i t i o n s / % o f Ad j u s t e d (r o u n d e d to th e Pe n s i o n Service (rounded to the Efficiency 20 1 0 / 1 1 Bu d g e t FY 20 1 0 / 1 1 Bu d g e t FY 20 1 1 / 1 2 Ad o p t e d Bu d g e t OO O ' s ) $c h a n g e %C h g Al l o c a t i o n Allocations OOO'sl Reorg, Etc. In t e r n a l Se r v i c e Fu n d s In f o r m a t i o n Te c h n o l o g y $ 1, 4 2 1 ,9 7 7 ) -1 0 % -1 0 , 0 0. 0 -2 8 % $ 15 , 2 2 9 , 8 5 4 35 . 5 $ 16 , 1 5 7 , 0 0 0 $ 92 7 , 1 4 6 6. 1 % $ 12 4 , 2 3 1 $ $ 16,281,000 $ Ri s k Ma n a g e m e n t $ (3 2 5 , 4 4 3 ) -2 % -0 . 5 0. 0 -7 % $ 21 , 7 5 0 , 2 9 6 6. 7 $ 23 , 4 8 2 , 0 0 0 $ 1, 7 3 1 , 7 0 4 8. 0 % $ 12 , 3 6 2 $ 152 $ 23,494,000 $ Ce n t r a l Se r v i c e s $ (8 2 , 0 6 4 ) -1 0 % -1 . 6 0. 0 -3 6 % $ 88 6 , 4 9 0 4, 4 $ 90 4 , 0 0 0 $ 17 , 5 1 0 2. 0 % $ 9, 3 9 0 $ (7,207) $ 906,000 $ Pr o p e r t y Ma n a g e m e n t - No n RD A $ 1 ,4 6 9 , 4 3 7 ) -1 8 % -2 2 . 0 0, 0 -5 0 % $ 8, 2 3 4 , 3 6 9 44 . 0 $ 8, 6 4 7 , 0 0 0 $ 41 2 , 6 3 1 5. 0 % $ 90 , 4 5 8 $ 56,512 $ 8,794,000 $ Fl e e t Ma n a g e m e n t $ (1 9 9 , 3 0 4 ) -2 % -3 . 0 0, 0 -1 4 % $ 8, 1 7 9 , 4 3 6 20 . 0 2. 0 $ 9, 6 5 3 , 0 0 0 $ 1, 4 7 3 , 5 6 4 18 . 0 % $ 59 , 8 9 3 $ 12,474 $ 9,700,000 $ PE N S I O N IN C R E A S E MB E R P 10 % of $ 3 . 6 M Ci t y v M e ) $ 29 7 , 0 0 0 $ 29 7 , 0 0 0 IN T E R N A L SE R V I C E FU N D S IN C R E A S E $ 37 , 0 0 0 $ 37 , 0 0 0 RO U N D I N G $ 2, 0 0 0 $ 2, 0 0 0 ) To t a l In t e r n a l Se r v i c e Fu n d s $ (3 , 4 9 8 , 2 2 5 -7 % -3 7 . 1 0, 0 -4 1 % $ 54 , 2 8 0 , 4 4 5 11 0 , 6 2. 0 $ 59 , 1 7 5 , 0 0 0 $ 4, 8 9 6 , 5 5 5 12 . 6 % $ 29 6 , 3 3 4 $ 36,983 $ 59,175,000 $ SU B - T O T A L GE N E R A L FU N D + IN T E R N A L S $ (4 5 , 3 0 7 , 9 1 5 ) -1 6 % 1 1 -2 1 4 , 5 -2 2 . 0 -1 4 % 1 1 $ 29 8 , 6 1 7 , 1 8 5 14 6 6 , 6 20 2 , 0 1 1 $ 31 4 , 7 4 8 , 0 0 0 16 , 1 3 2 , 8 1 5 0.2 1 1 3,223,683 314,748,000 $ (932,000) En t e r p r i s e Fu n d s Co n v e n t i o n Ce n t e r $ (4 0 3 , 7 8 1 -3 % 0. 0 Q, Q 0% $ 13 , 4 7 8 , 6 8 0 2. 5 0 $ 12 , 7 0 2 , 0 0 0 $ (7 7 6 , 6 8 0 ) -5 . 8 % $ 28 , 1 8 4 $ 4,958 $ 12,702,000 $ Wa t e r $ 65 4 , 7 1 3 -2 % -1 3 . 0 Q, Q -2 3 % $ 33 , 5 1 9 , 5 7 3 52 . 1 5 $ 33 , 5 5 5 , 0 0 0 $ 35 , 4 2 7 0. 1 % $ 83 , 7 8 0 $ 280,923 $ 33,919,000 $ Se w e r $ 23 2 , 9 6 9 ) -1 % -7 . 0 0. 0 -2 0 % $ 34 , 4 5 8 , 4 3 3 35 . 1 5 $ 37 , 3 2 3 , 0 0 0 $ 2, 8 6 4 , 5 6 7 8. 3 % $ 68 , 7 3 9 $ _(_80,570 $ 37,311,000 $ (47,000 St o r m w a t e r $ 65 0 , 1 7 5 ) -4 % -0 . 5 0. 0 -2 % $ 14 , 5 8 6 , 2 1 5 21 . 3 0 $ 11 , 9 2 6 , 0 0 0 $ (2 , 6 6 0 , 2 1 5 ) -1 8 . 2 % $ 25 , 3 7 8 $ 10,521 $ 11,962,000 $ Sa n i t a t i o n $ (4 7 3 , 2 3 2 ) -3 % -3 , 0 0, 0 -2 % $ 15 , 9 2 9 , 9 4 3 17 9 . 0 0 $ 17 , 0 6 4 , 0 0 0 $ 1, 1 3 4 , 0 5 7 7. 1 % $ 29 5 , 6 3 2 $ 184,404 $ 17,544,000 $ 111,000) Pa r k i n g _ $ 91 8 , 1 5 1 -2 % -8 . 0 8. 0 0% $ 44 , 7 2 0 , 6 2 9 11 6 . 0 0 21 . 0 0 $ 47 , 2 0 4 , 0 0 0 $ 2, 4 8 3 , 3 7 1 5. 6 % $ 27 3 , 9 9 7 $ 901,049 $ 47,204,000 $ (38,000) PE N S I O N IN C R E A S E MB E R P (1 0 % of $ 3 . 6 M Ci t \ " M d e ) $ 77 6 , 0 0 0 $ 77 6 , 0 0 0 IN T E R N A L SE R V I C E FU N D S IN C R E A S E $ 1, 3 0 2 , 0 0 0 $ 1, 3 0 2 , 0 0 0 RE N E W A L & RE P L A C E M E N T FU N D I N G $ (1 ,2 1 0 , 0 0 0 ) $ (1 ,2 1 0 , 0 0 0 ) To t a l En t e r p r i s e Fu n d s $ (3 , 3 3 3 , 0 2 1 ) -2 % -3 1 . 5 8, 0 -6 % $ 15 6 , 6 9 3 , 4 7 3 40 6 , 1 21 . 0 $ 16 0 , 6 4 2 , 0 0 0 $ 3, 0 8 0 , 5 2 7 2. 8 % $ 77 5 , 7 1 0 $ 1,301,285 $ 160,642,000 $ (196,000) GR A N D TO T A L * ' ] L ! _ _ (4 8 , 6 4 0 , 9 3 6 ) ! -1 1 % -2 4 6 J l J -1 ~ - 1 3 % I U _ 45 5 , 3 1 0 , 6 5 8 1 _1 8 7 2 . 7 1 22 3 , 0 1 1 $ 47 5 , 3 9 0 , 0 0 0 II $ 19 , 2 1 3 , 3 4 2 1 6. 5 % 1 1 $ 6, 7 9 2 , 0 1 3 1 1 $ 4,524,968 11 $ 475,390,000 1 $ (1,128,000)1 In ad d i t i o n , in FY 20 0 9 / 1 0 th e r e ar e 23 Po l i c e an d Pr o p e r t y Ma n a g e m e n t po s i t i o n s bu d g e t e d in th e Ci t y Ce n t e r RD A an d 19 . 6 FT po s i t i o n s bu d g e t e d th r o u g h gr a n t s an d sp e c i a l re v e n u e fu n d s , Th e FY 20 1 0 / 1 1 Pr o p o s e d Budget for the RDA recommends reducing 1F1 FT po s i t i o n s th r o u g h PC o n t r a c t i n g Ou t as sh o w n in Ex h i b i t s B - D. '~~ * * T h e Ci t y Ce n t e r RD A bu d g e t al s o in c l u d e s th e re d u c t i o n of 1 fu l l ti m e po s i t i o n as pa r t of mi n i m a l se r v i c e im p a c t ATTACHMENT B POSITIVE IMPACT OR MINIMAL SERVICE IMPACT, EFFICIENCIES, ETC. I Position Impacts Cumulative Full Part Proj. Mgt.& Non GENERAL FUND Impact Dept. Impact Time Time Vacant Filled Admin Mgt. Police Community Policing Reconfiguration-Eliminate 1 Police Commander in Technical Svcs plus 1 Administrative Aide I position in CID and replace with 3 Crime Analyst positions (67,000 (67,000 1.0 1.0 (2.0 3.0 Information Technology Enhancement-Add 1 Senior Systems Analyst, offset by $80,000 reduction in overtime (8,000 (75,000 1.0 1.0 Convert Emergency Manager from full-time to part-time effective 1/1/13 (filled Major position to be vacated 1/1/13) (61,000\ (136,000 (1.0 1.0 (1.0 Parks & Recreation Eliminate (5) vacant positions (1 MSW I and 4 MSW II) for FY12 and utilize a portion of the funds, to obtain contractual professional irrigation services utilizing a contracted irrigation service provider for $80,000. Assumes implementation October, 2013. Add list of positions (43,000) (43,000 (2.0 (3.0 (5.0 (5.0 Eliminate ( 1) MSW Ill part-time _(21 ,000 (64,000 (1.0 (1.0 Public Works Eliminate 1 Street Operations Supervisor position (71,000)1 (71,000)1 (1.0) (1.0ll (1.0 City Manager's Office Freeze one (1) Assistant City Manager (ACM) position and one (1) assistant for 6 months during interim transitional period -Assistant incumbent to be placed in existing vacancy (132,000 (132,000) lcitv Ch.rk Transfer passport service function to the Customer Service Center eliminate 1 Office Associate II position (57,000 (57,000 (1.0 (1.0 (1.0 ICitvwid<> Replace CAC supplemental funding from General Fund with an increase in Quality of Life Funding (estimated increase of $200,000 from FY12 to FY13) (152,000) (152,000 Total General Fund Without Transfers $ (612 OOOll $ (612,000)1 (3.0ll (3.0ll (6.0ll (1.0ll (2.0ll (4.01 Reduced funding for IT Technology projects based on department requests (320,000) $ (320,000 Total General Fundi $ (932,000!1 $ (932,000)1 (3.0)1 (3.0)1 (6.0)1 (1.0)1 (2.0)1 (4.0 Cumulative INTERNAL SERVICE FUNDS Impact Dept. Impact Risk Mam1_g_ement -Insurance on .. .I iA meaisal iAs~raAse ~laA~0IRis is IRe sam~' as wRal s~rreAIIy eJ<isls fer Aewly Rire~ I slassiliea em~leyees. {$:JQ,QQQ) $ - Property_ Management Reslassify Qata !>Airy Glerl~ !JesitieA !e Gffise Asseeiate IV !e iAGFease e#isieney I:Jy eemi:JiAiAg data eA!ry duties aAd admiAistmtive su!)!)ert neeEieEI ($€l,QQQ) $ - Total Internal Services Funds $ -$ - 81 I Cumulative Full GENERAL FUND Impact Dept. Impact Time Cumulative Full ENTERPRISE FUNDS Impact Dept. Impact Time Sewer I I Eliminate 1 Assistant Pumping Mechanic l (47,000)1 (47,000)1 (1.0)1 Sanitation Eliminate 1 Vacant Waste Driver Supervisor (49,000 (49,000 (1.0 Reelassify -t Administrati•1e Aide l aRd fej3laGe witA aR -t GfllGe AsseGiate V- te J*9Vlde aR enllaReed level ef Administrative WW9fl f9{jUifed by rnvisieR "" """' (49,000 Outsource Maintenance of Beachfront restrooms -2 MSW II and 2 MSW Ill (Sanitation) $ (62,000) $ (111,000 _(_4.0 Parking SIGN SHOP & METER SHOP UNITS -Convert 1 Parking Operations Supervisor from full time to part time. No decrease in Level of Service $ (18,000 $ (18,000\ (1.0 SIGN SHOP & METER SHOP UNITS-Convert 1full-time Meter Tech II and 1 full-time Meter Tech I TO 3 PT Meter Tech Is No decrease in Level of Service $ (4,000 $ (22,000\ (2.0\ ENFORCEMENT-Convert 3 full-time Pkg Enforcement Specialist Is to 4 part-time Pkg Enforcement Specialist Is. No decrease in Level of Service $ _{16,000 $ (38,000\ (3.0\ Total Enterp_rise Fund!>)_$ J196,ooo)L $ (196,000)1 (12.0)1 OTHER FUNDS Health Insurance Fund Implement a 90 day waiting period for newly hired unclassified employees enrolling in medical insurance plans this is the same as what currently exists for newly hired classified employees. 82 Position Impacts Part Proj. Mgt.& Non Time Vacant Filled Admin Mgt. Position Impacts Part Proj. Mgt.& Non Time Vacant Filled Admin Mgt. I I I I I I I I (1.0 (1.0 (1.0 . (4.0 (4.0 - 1.0 3.0 4.0 8.0 (5.0)1 o.o I o.o I (6.0l ATTACHMENT C POTENTIALSERVICE ADJUSTMENTS GENERAL FUND Impact Police !'ilimif>ate 4 8GAool biaisGfl GffiBefs & + 8GAool biaisGfl ~ +Aese f'9Silioos seFVe as liawf\s 19 tf\e f*ll>li6 elemefllafy aFid miGGie sffieels ifl Miami Beaffi. €limiflatioo will rest!ll ifl f\G elfiGefS beif1!1 assi§ReG 19 tf\e f*ll>li6 sffieels ifl Miami Beaffi. wfliGfl lea<ls 19 a §fOOlef <lissatisfastieA IFGA1 witeiA tee GCA1A1"Aily. ($~~8.GQQ) !'ilimif>ate GAe + -Safety Sj>eGialisl assi§ReG 19 GfifAiRal IAvesti§atieA Qivisoo (CID)/AdmiAistmtieA. +Ae aSHity 19 review aFid ellllaAGe vi<loo IFeA1 GFime SOOAe& will l>e ~ aFid may rest!ll ifl ~ ~ tim&. This will <lelay tf\e sel¥al>ilily laslaFs el Gef!aiA ty~es el sFimes. ($§Q,QQQ) Re-assigR Gllieef assi§ReG 19 tf\e Pelire AtAleli6 beagoo aFid elimiRale + vasaRl Gllieef pesitielt Tee im~aat •Nill sea less iA FelatieAseip with ye"th ~Fe§FaA1S withiA the City (ee,GGG). Fire Reduce the Overtime Budgets (1210, 1220) by amending the minimum staffing ordinance to set staffing levels to a minimum of 42 personnel when there are more than 3 unscheduled absences at the start of the shift. Note: There are no reductions to the number of firefighters assigned to shifts. Projection based on 07/08, 08/09 and 09/10 OT costs for 43rd and 44th person and shift PENDING STUDY strength of 184 (the same as the last three Fiscal Year). Annual estimated impact is $800,000 but AND CONTRACT requires collective barqanninq with the union. Implementation 7/1/12 is assumed. NEGOTIATIONS Fire {Ocean Rescue) P€NQING- ~ n IOVAbbi+A+Iml Total $ - 83 Position Impacts Cumulative Department Full Part Proj. Mgt& Non Impact Time Time Vacant Filled Admin Mgt. $ - $ $ - I~ -I --I - ATTACHMENT E POTENTIAL REVENUE ENHANCEMENTS Cumulative Fiscal Impact Department Cumulative Impact Fund Impact GENERAL FUND Police Charge for commercial false alarms consistent with Miami-Dade County which is to not start charging the $100 ! penalty until the forth violation, and having it raise with additional violations and capped $500. $ 7,000 $ 7,000 $ 7,000 Fire Increase Fire Transport Fees to Miami Dade County Levels for FY 12012/13 and add charges similar to Hialeah and Coral Gables SERVICES AND TRANSPORT Miami Beach Miami-Dade ADVANCED LIFE SUPPORT (ALS) N/A N/A ALS 1 TRANSPORT 1 $600.00 $800.00 ALS 2 TRANSPORT 2 $800.00 $800.00 SPECIALTY CARE TRANSPORT (ALS SCT) $0.00 $900.00 BASIC LIFE SUPPORT (BLS) TRANSPORT $500.00 $800.00 PROCEDURES AND EQUIPMENT BACKBOARD $25.00 $25.00 CARDIAC MONITORING $25.00 $25.00 CERVICAL COLLAR $25.00 $25.00 IV SOLUTIONS $25.00 $25.00 MILEAGE PER MILE OR FRACTION $10.00 $15.00 OXYGEN PER TANK OR FRACTION $30.00 $30.00 SPECIAL HANDLING (EXTRICATION, ETC.) $25.00 Coral Gables! CARDIAC ARREST RATES Hialeah AUTO PULSE LIFEBANDS $175.00 RESCUE POD $100.00 DEFIBRILLATION PADS $100.00 EZ-10 $100.00 $ 192,000 $ 192,000 $ 199,000 Parks and Recreation Increase Staff Rental Rates. Example below show est. rental revenues collected in FY11 & compare them to est. proposed rates for the total est. increases in revenues. Staffing: $63,000 est. collected in FY 11; Proposed 40% Increase (from $25 to $35 o/hr) in FY 13 is $88,000. Difference (Est. Revenue Increase)= $25,000 $25,000 $ 25,000 IAerease ResiEieA! PavilieA ReA!al Rates feF 4 lleuF ReA!al, iAeluEiiA§ NeHRaAEI~' Isle, Muss PaFI(, Palm lslaAEI. lo. '"' · c:" '" ,; .,., · · Fe'IOAUeS. ln. '""'"" ., • ..,, · , c:" • ., .,. nnn $ 25,000 Proposed Increase in Resident North Shore Open Space Pavilion Rental Rates. Examples below show est. rental revenues collected in FY11 & compared to est. proposed rates for the total estimated increases in revenues. Pavilions: $21,000 est. collected in FY 11; Proposed 100% Increase (from $75 to $125) in FY 13 is $35,000. Difference (Est. Revenue Increase)= $14,000 $14,000 $ 39,000 $ 238,000 TCD Add a $1 facility processing fee for all tickets at the Colony Theatre POTENTIAL $ 5,000 $ 5,000 GENERAL !;;slal:llisf1 a $Q.2a "eemf)" Iiske! ei'EieF flFeeessiA§ fee $3,Q(J(J FUND $ 5,000 REVENUES Co· produce events charging 30% of ticket sales rather than theatre and equipment rental $ 20,000 $ 25,000 $ 263,000 84 ATTACHEMENT D PROPOSED ADDITIONS AND SERVICE ENHANCEMENTS Positions Cumulative IPT Fiscal Impact Impact FT GENERAL FUND Potential Additions Living Wage -existing contracts with living wage 62,000 62,000 Living wage -potential impact for expiration of current golf course management agreement 1$150,000-pending contract negotiation/re-bid) TBD 62,000 Additions Since FY 2011/12 Budget Locations added to the Parks & Recreation's Greenspace Management Division's areas of responsibility after the completion of the budget process with additional costs identified at the following locations: CITYWIDE MOWING: • Dickens & Tatum Waterway 21 Bum pouts & Medians (CIP)-$22,140 • Bonita Drive South -$768 • North Shore Park & Youth Center (Sports Field) increase for Bermuda -$34,001 • Miami Beach High School Swale, Dade Blvd N. to Par 3-$7,350 • Hibiscus Island Hurricane Evacuation Site -$2,250 GROUNDS MAINTENANCE: • Flamingo Neighborhood Streetscape Swales & Bum pouts-$3,500 • Washington Avenue Dog Park Increase-$1,250 • Normandy Business District (FDOT/CIP)-$3,000 • 71st Street Sidewalk Planters (FDOT/CIP)-$6,000 In addition the following will be added to the RDA budget • Bass Museum (Renovated Site) CITY CENTER /RDA $8,100 • Soundscape Park Special Events (additional service required to facilitate the 38 plus events held at this Park: Movies, Wallcasts, Opera Nights, etc)-$19,200 81,000 81,000 Total Additions 143,000 143,000 Potential Enhancements Police Internal Affairs Reorganization -Add 1 Investigator Supervisor and eliminate a Major position after 5 months in FY 2012/13 through attrition-currently the Police Department has one Lieutenant position underfilling a vacant Major position due to Reorganization --when a Lieutenant position is vacated in February 2013, the Major position can be eliminated. 50,000 50,000 IAtemal ,AJfaiFs ReeF§aAi<:atieA AEIEiiA!J a swem iAvesti§ateFs aAEI ~ Q,£W.. ~ SeF!JeaAt t:las aiFeaEiy beeA assi§AeEI te tt:le ~BI. ~ SeF§eaAt will be assi§AeEI te tt:le GFiFAe Sll!}flFessieA +eaFA feF tt:le E;AtertaiAFAeAt blistFiGt, :1 will be EleEiiGateEI te GFiFAe IAvesti§atieAs. +t:tese eAAaAGeFAeAts well lEI be e#set by tt:le eliFAiAatieA ef ~ PllbliG Safety Sf)eGialist, as well as a $79,000 mEillGtieA iA evertiFAe aAEI ~ SeF§eaAt welliEI be eliFAiAateEI tAFell!JA aUFitieA befuFe ~y :10~2,1q3 fur a tetal ef $3q3,QQQ 50,000 Add 2 ATV Police Officers in the North area working 2200 to 0800 hours (10pm to Sam) to implement and enforce the beach closure. This number has been refined to exclude new vehicles, fuel, maintenance and depreciation costs for the additional Police Department union positions being proposed, as they will not impact the FY 2012113 budget. These vehicle costs of $76,200 will impact subsequent years. 165,000 215,000 2.0 Add 4 Police Officers in the South and Citywide to form an additional Crime Suppression Team (Sergeant for the squad would be assigned from the lA reorg). This enhancement will be offset by the elimination of $100,000 in overtime. This number has been refined to exclude new vehicles, fuel, maintenance and depreciation costs for the additional Police Department union positions being proposed, as they will not impact the FY 2012113 budget. These vehicle costs of $152,400 will impact subsequent years. 230,000 445,000 4.0 Add 6 Police Officers in the South area for a walking beat along Washington Avenue. 461,000 906,000 6.0 Add 1 Detention Officer to augment current staffing levels in all three shifts including weekends. This number has been refined to exclude new vehicles, fuel, maintenance and depreciation costs for the additional Police Department union positions being proposed, as they will not impact the FY 2012113 budget. These vehicle costs of $38,100 will impact subsequent years. 66,000 972,000 1.0 Records Unit Enhancement-additional Records Technician and Data Entry Clerk will reduce the need for overtime in the unit by $80,000. 5,000 977,000 2.0 Additional Overtime for the Neighborhood Resource Officer for additional Homeless Outreach 20,000 997,000 Fire/Ocean Rescue CeAEillGt stllEiy te beUeF EleteFFAiAe beaGA llsage by tiFAe Elf Elay, Elay ef week aAEI tiFAe ef yeaF iA 9FEieF te FA9Fe effiGieAIIy alleGate FeS9llFGeS $:1a,OQO 85 Cumulative Total Building Fiscal Impact Impact FT PT Increase temporary labor to provide support in the violations section of department to become more proactive in addressing construction without permits and unsafe structures. 106,000 106,000 Improve inspection and plan review services by adding an inspector due to increased demand 149,000 255,000 Add plan review position to continue to evaluate where permit fees appear to be in excess of 10 percent of the job value -this position will be done on contract rather than hiring a full-time employee 149,000 404,000 Add a contracted Sr. Mechanical inspector and a contracted Sr. Building inspector to respond to increasing demand -contracting these positions rather than hiring full time employees provides for improved flexibility in response to market demands 298,000 702,000 REHCD Add a full-time Leasin!l Specialist 66,000 66,000 1.0 Convert part-time position shared with TCD for field monitoring to a full time position in each department. Also impacts TCD -see below 12,000 78,000 1.0 _(0.5 TCD Convert part-time position shared with REHCD for field monitoring to a full time position in each department. Also impacts REHCD -see above 32,000 32,000 1.0 (0.5 Installation of exterior lighting at the Colony Theater 15,000 47,000 Purchase of cleaning equipment, carpet cleaner/extractor, wet-vac and burnisher for the Colony Theater which currently does not have its own equipment 4,000 51,000 OBPI Utilize outside audit contractor to review/audit one area of the city's operations per year, CIP and Planning anticipated for FY 2013. 150,000 150,000 Procure Grants research software (6 city departments; including 2 licenses for OBPI, and 1 for Community Services who also requested similar software)-(based on 3yr contract) 8,000 158,000 City Manager's Office Community Outreach -Condominium Ombudsman-reassign duties to utilize existing resources to provide service and carrv out functions q,7 . '"'" - Ci~de Increased Transfer to Pay-As-You-Go Fund 1,400,000 1,400,000 Reinstate Festival of the Arts 55,000 1,455,000 Additional Information Technology Funding For Automated Vehicle Locator (AVL) technology in Parks and Recreation vehicles, additional Fire vehicles and Public Works General Fund vehicles 114,000 $1,569,000 Total General Fund Enhancements $ 3,555,000 $3,555,000 18.0 (1.Q} Total General Fundi $ 3,698,000 I 18.o I (1.0l I Cumulative I Total INTERNAL SERVICE FUNDS Fiscal Impact Impact FT PT Potential Additions Living Wage -existing contracts with living wage in Property Management 9,000 9,000 Potential Enhancements Property Management Hand Sanitizers at City Facilities $ 29,000 29,000 AVL Fundingfor Public Works Property Management Vehicles 30,000 59,000 Information Technology Special Project Coordinator/Business Analyst to facilitate the review of business process requirement and data gathering for departments in order to identify technoly improvements, focusing on customer solutions. 85,000 85,000 1.0 Total Internal Service Funds $ 153,000 $ 153,000 1.0 0.0 86 I I Cumulative I Total ENTERPRISE FUNDS Fiscallmpact Impact 1FT IPT Potential Additions Living Wage-existing contracts with living wage in Public Works Stormwater, Sewer, I 253,0001 253.000 I I Sanitation, Parking and Convention Center Potential Enhancements Sanitation Washington Avenue Tourism Enhancement Initiative-Increased pressure cleaning from bi- 1$ 115.000 I$ 115.000 I 2.0 I weekly to weekly-(1 MSW I & 1 MSWII; includes $34,000 for vehicle & equipment costs) Sewer AVL Funding for Public Works Sewer Vehicles I$ 1s.ooo I $ 18,ooo I I Water AVL Funding for Public Works Water Vehicles 1$ 25,000.1 $ 25.ooo I I Stormwater AVL Funding for Public Works Stormwater Vehicles 1$ 6,000 I $ 6.ooo I I Total Enterprise Funds $ 417,ooo I $ 417,ooo I 2.0 I 0.0 I Grand Total All City Funds $ 4,268,ooo I $ s1o,ooo I 21.o I (1.o>l Cumulative Total RDA Fiscal Impact Impact 1FT IPT Potential Additions Living Wage-existing contracts with living wage 20,000 20,000 Increase Security coverage on Lincoln Road between the hours of 1am-6am, allowing for 24 hour coverage between security and Police Officers. 35,000 55,000 AElElitien sf a Lincoln Road Mall Manager /"Point Person"-reassign duties to utilize existing resources to orovide service and carrv out functions ""· "''" $ 55,000 Lincoln Road Tourism Enhancement Initiative-Increased pressure cleaning from bi-weekly to weekly-(1 MSW I & 1 MSWII; includes $34,000 for vehicle & equipment costs) 101,000 $ 156,000 2.0 Locations added to the Parks & Recreation's Greenspace Management Division's areas of responsibility: In the RDA • Bass Museum (Renovated Site) CITY CENTER /RDA $8,100 • Soundscape Park Special Events (additional service required to facilitate the 38 plus events held at this Park: Movies, Wallcasts, Opera Nights, etc)-$19,200 28,000 $ 83,000 !Total RDA $184,ooo I $ 83,ooo I 2.o I o.o I Cumulative Total Resort Tax Fiscal Impact Impact FT PT Potential Additions Increased funding for Overtime for Spring Break and Memorial Day Weekend consistent with levels deployed in FY 2011/12 680,000 680,000 Washington Avenue Tourism Enhancement Initiative-Marketing ($73,000) and FlU- Wolfsonian ($75,000 funded over 2 years) 148,000 $ 828,000 Enhance Holiday Decorations 40,000 $ 868,000 Sponsorship fee to help offset marketing and advertising expenses associated with the Ms. USA event. If the event that Ms. USA is not held in Miami Beach, this funding will be used for other events. 100,000 $ 968,000 I Total Resort Tax $968,ooo I $ 968,ooo I o.o I o.o I 87 Cumulative I Total Special Revenue Fiscal Impact Impact FT PT Potential Enhancements Sustainability Fund Enhance the environmental sustainability of the community through comprehensive citywide Recycling Program . First year includes an intensive education and outreach campaign and after six months, beginning January 2013, warnings will be issued . Sustainability Officer will be responsible for conducting outreach, recycling guidance, and if necessary, issue warnings, . Once the Recycling Program has been implemented, the Sustainability Officer can address other sustainability issues (greening restaurants, etc), . Administration will go back to Commission before issuing fines, . Enhancement funded from the Waste haulers Additional Services an Public Benefit Fund 95,000 95,000 1.0 !Total Sustainability $95,ooo I $95,ooo I 1.o I o.o I 88 ATTACHMENT 2 LISTING OF POSITIONS VACANT AND NOT FILLED BY CONTRACT OR TEMPORARY as of 7/23/12; updated for Proposed Efficiency Reductions & Recent Hires Number of Number of Months Department Position Name Positions Vacant GENERAL FUND Budget & Performance Improvement OBPI Director 1 1 OBPI Sr. Management Consultant 1 1 Code Compliance Code Compliance Administrator 1 10 Code Compliance Code Compliance Officer 1 2 Code Compliance Code Compliance Officer -PT 1 1 Human Resources/Labor HR Assistant Director 1 3 PlanninQ Planning Director 1 34 Public Works City Engineer 1 3 Parks Rec Leader I 1 2 Parks Rec Leader I PT Year Round 1 2 Police Police Captain 1 9 Police Security Specialist 1 7 Police IT Specialist II 1 4 Police Crime Scene Technician II 1 4 Police School Crossin!=! Guard (PT) 5 1-23 Police Police Officer 3 1-3 Police Complaint O_perator 1 3 Procurement Procurement Division Director 1 4 Fire Fire Inspector I 1 1 Fire Clerk Typist PT 1 5 CIP Assistant Director-CIP 1 34 CIP Special Assistant to City Manager 1 21 CIP Capital Projects Coordinator 1 3 Real Estate, Housing and Community Dev incl. Office of Community Services Administrative Aide I 1 12 Total General Fund 30 89 Annual Salary of Vacancy 184,870 71,652 55,588 69,394 31,200 124,488 170,000 92,316 32,471 13,299 92,316 56,076 62,964 55,588 66,273 161,267 64,168 148,776 49,713 16,484 92,316 92,316 78,194 25,225 $ 1,906,954 ( , 0 0 16 N E I TH U R S D A Y , AU G U S T 23 , 20 1 2 NE -- · ~ - · - · · - · - ... . "" " ' · - · - ~ - · · · - · · ·- - - · - · " " " ·- · · · -- · · · - · - · " MI A M I BE A C H CI T Y OF MI A M I BE A C H NO T I C E OF PU B L I C HE A R I N G S Mi a m i H e r a l d . c o m I THE MIAMI HERALD NO T i C E IS HE R E B Y gi v e n th a t pu b l i c he a r i n g s wi l l be he l d by th e Ma y o r an d Ci t y Co m m i s s i o n of th e Ci t y of Mi a m i Be a c h , Fl o r i d a , in th e Co m m i s s i o n Ch a m b e r s , 3r d Fl o o r , Ci t y Ha l l , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , Mi a m i Be a c h , Fl o r i d a , on We d n e s d a y , Se p t e m b e r 12 , 20 1 2 , to co n s i d e r th e fo l l o w i n g : ~ ~ p ~ ' TH E FI R S T PU B L I C HE A R I N G AD O P T I N G TH E PR O P O S E D MI L L A G E RA T E S AN D BU D G E T S FO R FI S C A L YE A R 20 1 2 / 2 0 1 3 FO R TH E CI T Y OF MI A M I BE A C H . 5: 0 2 p . m . TH E FI R S T PU B L I C HE A R I N G AD O P T I N G TH E PR O P O S E D MI L L A G E RA T E AN D BU D G E T FO R FI S C A L YE A R 20 1 2 / 2 0 1 3 FO R TH E NO R M A N D Y SH O R E S LO C A L GO V E R N M E N T NE I G H B O R H O O D IM P R O V E M E N T DI S T R I C T . In q u i r i e s ma y be di r e c t e d to th e Of f i c e of Bu d g e t an d Pe r f o r m a n c e Im p r o v e m e n t (3 0 5 ) 67 3 - 7 5 1 0 . IN T E R E S T E D PA R T I E S ar e in v i t e d to ap p e a r at th i s me e t i n g , or be re p r e s e n t e d by an ag e n t , or · t o ex p r e s s th e i r vi e w s in wr i t i n g ·a d d r e s s e d ~o th e Ci t y Co m m i s s i o n , c/ o th e Ci t y Cl e r k , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , 1s t Fl o o r , Ci t y Ha l l , Mi a m i Be a c h , Fl o r i d a 33 1 3 9 . · Co p i e s of th e : : ; e it e m s ar e av a i l a b l e fo r pu b l i c in s p e c t i o n du r i n g no r m a l ·b u s i n e s s ho u r s in th e Ci t y Cl e r k ' s Of f i c e , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , 1s t Fl o o r , Ci t y Ha l l , Mi a m i Be a c h , Fl o r i d a 33 1 3 9 . Th i s me e t i n g ma y be co n t i n u e d , an d un d e r su c h ci r c u m s t a n c e s ad d i t i o n a l le g a l no t i c e wi l l no t be pr o v i d e d . Ra f a e l E. Gr a n a d o , Ci t y Cl e r k Ci t y of Mi a m i Be a c h Pu r s u a n t to Se c t i o n 28 6 . 0 1 0 5 , Fl a . St a t . , th e Ci t y he r e b y ad v i s e s th e pu b l i c th a t : if a pe r s o n de c i d e s to ap p e a l an y de c i s i o n ma d e by th e Ci t y Co m m i s s i o n wi t h re s p e c t to an y ma t t e r co n s i d e r e d at it s me e t i n g or it s he a r i n g , -s u c h pe r s o n mu s t en s u r e th a t a ve r b a t i m re c o r d of th e pr o c e e d i n g s is ma d e , wh i c h re c o r d in c l u d e s th e te s t i m o n y an d ev i d e n c e up o n wh i c h th e ap p e a l is to be ba s e d . Th i s no t i c e do e s no t co n s t i t u t e co n s e n t by th e Ci t y fo r th e in t r o d u c t i o n or ad m i s s i o n of ot h e r w i s e in a d m i s s i b l e or ir r e l e v a n t ev i d e n c e , no r do e s it au t h o r i z e ch a l l e n g e s or ap p e a l s no t ot h e r w i s e al l o w e d by la w . To re q u e s t th i s ma t e r i a l in ac c e s s i b l e fo r m a t , si g n la n g u a g e in t e r p r e t e r s , in t o , . m a t i o n on ac c e s s fo r pe r s o n s wi t h di s a b i l i t i e s , an d / o r an y ac c o m m o d a t i o n to re v i e w an y do c u m e n t or pa r t i c i p a t e in an y Ci t y - s p o n s r x e d pr o c e e d i n g . pl e a s e co n t a c t us fi v e da y s in ad v a n c e at (3 0 5 ) 67 3 - 7 41 1 (v o i c e ) or TT Y us e r s ma y al s o ·c a l l th e Fl o r i d a Re l a y Se r ; i c e at 71 1 . Ad #7 2 5 . --- - - - - - ~ · · l - : l ' : " ' ' " f " : " ' " ! T ~ ' " 1 " ~ 1 ~ " f " ? ' " : N ' RESOLUTION TO BE SUBMITTED 91 THIS PAGE INTENTIONALLY LEFT BLANK 92 COMMISSION ITEM SUMMARY Condensed Title: A resolution of the Board Of Directors of The Normandy Shores Local Government Neighborhood Improvement District adopting the tentative Ad Valorem Millage Rate Of 1.1444 Mills For The Normandy Shores Neighborhood Improvement District, which is thirteen and seven-tenth ( 13.7%) more than the "rolled-back" rate of 1.0063 mills, subject to a second public hearing scheduled on Thursday, September 27, 2012 At 5:02P.M. Key Intended Outcome Supported: Increase visibility of police; Maintain crime rates at or below national trends. Supporting Data (Surveys, Environmental Scan, etc.): In 2009 Community Survey, both residents and businesses reported the following areas for the City to address in an effort to improve public safety: • Preventing crime (Residents: 44.9%, Business: 43.9%) Issue: Shall the Mayor and City Commission, acting in its capacity as the Board of Directors for the Normandy Shores Local Government Neighborhood Improvement District, adopt the attached resolution which sets the tentative Ad Valorem Millage Rate; the Calculated Rolled-Back Rate; and sets the date, time and place for the second public hearing? Item Summary/Recommendation: The proposed ad valorem millage recommended by the Administration is 1.1444 mills to provide the current level of security required by this district. For the Normandy Shores taxing District, the value for each mill ($1.00 of ad valorem tax for each $1 ,000 of property value) is determined by the 2012 Certification of Taxable Value and has been set at $112,393. Florida Statutes permit a discount of up to five percent for early payment discounts, delinquencies, etc. Therefore, the 95 percent value of the mill is $106,773. The 1.1444 mills will generate proceeds of $122,200, 65 percent of the proposed district budget. In addition, the City of Miami Beach General Fund is required to provide 35% of the total operating expenditures ($65,800). The City has funded the 35% for each of the nineteen years since the District was established. The increase of 0.0509 mills from the prior year millage represents an annual increase of $14.53 to the City average 2012 homesteaded property of $285,517 taxable value (estimate based on Ad Valorem Assessment Roll as of January, 2011 ), which is due to maintenance of homeowner- requested cameras and security gates, the estimated impact of the living wage ordinance on the security contract expenses, and Property Management charges primarily due to personnel increases. The total levy to the average homeowner is $327 per year ($27 per month). The FY 2012/13 proposed millage rate is above the maximum millage rate of 1.0513 allowed to be adopted bya majori!}t vote, and will therefore require a 5/7 vote. Advisory Board Recommendation: Financial Information: Source of Amount Funds: 1 I N/A I 2 OBPI Total Financial Impact Summary: City Clerk's Office Legislative Tracking: s· Off 1gn-s: Department Director Assistant City Manager MIAMI BEACH 93 Account Approved City ~9llger ~ W// AGENDA ITEM ---'-R_7_8_1_ oArE r~;z~rz_ MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachll.gov TO: FROM: DATE: COMMISSION MEMORANDUM Mayor Matti Herrera Bower and Members of the City Commission Kathie G. Brooks, Interim City Manage~L, September 12, 2012 SUBJECT:A RESOLUTION OF THE BOARD OF DIRECTORS OF THE NORMANDY SHORES LOCAL GOVERNMENT NEIGHBORHOOD IMPROVEMENT DISTRICT ADOPTING THE TENTATIVE AD VALOREM MILLAGE OF 1.1444 MILLS FOR FISCAL YEAR (FY) 2012/13 FOR THE NORMANDY SHORES LOCAL GOVERNMENT DISTRICT, WHICH IS THIRTEEN AND SEVEN- TENTH PERCENT (13.7%) MORE THAN THE "ROLLED-BACK" RATE OF 1.0063 MILLS SUBJECT TO A SECOND PUBLIC HEARING SCHEDULED ON THURSDAY, SEPTEMBER 27,2012 AT 5:02P.M. ADMINISTRATION RECOMMENDATION The Administration recommends that the Mayor and City Commission, acting in its capacity as the Board of Directors for the Normandy Shores Local Government Neighborhood Improvement District, adopt the attached resolution which sets the following: 1) The tentatively adopted millage rate of the Normandy Shores Neighborhood Improvement District for FY 2012/13: General Operating 1.1444 mills (1.0935 mills last year) 2) The tentatively adopted millage rate of 1.1444 mills is 13.7% more than the "Rolled-Back" Rate of 1.0063 mills 3) The second public hearing to consider the final Normandy Shores Neighborhood Improvement District operating millage rate and tentative budget for FY 2012/13 shall be held on Thursday, September 27 2012 at 5:02P.M., in the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida. BACKGROUND The Normandy Shores Local Government Neighborhood Improvement District (the District), a dependent taxing district of its principal, the City of Miami Beach, was established in 1994 to provide continual 24-hour security to this gated community; FY 2012/13 represents its nineteenth year of operation. 94 FY 2012/13 Normandy Shores Tentative Millage Rate September 12, 2012 Page 2 of 3 The District was established by Ordinance 93-2881, and has the authority "to levy an ad- valorem tax on real and personal property of up to two mills, provided that no parcel of property will be assessed more than $500 annually for such improvements". During FY 1998/99 the amount of annual funding to be provided by the City and the dependent status of the District were issues discussed by the Finance and Citywide Projects Committee. A determination was reached that the City would fund 35% of the annual cost of the operation of the community gate guard. This cost will eventually be funded from the golf course operation of the Normandy Shores Golf Course. It was further agreed that the City would continue to supplement the District at current levels until the Golf Course assumes the cost. On August 29, 2002, the Administration met with the Normandy Shores Local Government Neighborhood Improvement District representatives and agreed to eliminate the $500 cap on the highest valued home in the District. The enabling legislation was adopted by the Commission on September 25, 2002. This ensures that the City's contribution from the General Fund remains at 35% of the operating budget of the District. PROCEDURE The operating millage and budget for this dependent special taxing district must be adopted in accordance with Florida Statutes. This procedure requires that this Resolution be considered immediately after the millage and budget of the principal taxing authority, i.e., City of Miami Beach. It also prescribes that a tentative millage be adopted first. This is accomplished by adopting a Resolution which states the percent increase or decrease over the "Rolled-back" rate, and the date, time, and place of the second public hearing scheduled to adopt the final millage. Following this, another Resolution which tentatively adopts the Normandy Shores District operating budget must be approved. (See accompanying District Budget Agenda item for details). The statute requires the name of the taxing authority, the rolled-back rate, the percentage increase, and the millage rate be publicly announced before adoption of the millage resolution. ANALYSIS On July 1, 2012, the City received the 2012 Certification of Taxable Value from the Property Appraiser's Office stating that the taxable value for Normandy Shores is $112,393,414, which includes a reduction of $283,196 for construction, renovation, etc. The preliminary value represents an increase of $7,981,561 from the July 1, 2011 Certification of taxable Value of $104,411,853 (7.6 percent) and an increase of 8.4 percent over 2011's July 2011 value of $103,688,864. The proposed ad valorem millage recommended by the Administration is 1.1444 mills to provide the current level of security required by this district. This tax levy will generate proceeds of $122,200. The increase of 0.0509 mills from the prior year millage, due to maintenance of homeowner-requested cameras and security gates, the estimated impact of the living wage ordinance on the security contract expenses, and Property Management charges primarily due to personnel increases, represents an annual increase of $14.53 to the City average 2012 homesteaded property of $285,517 taxable value (estimate based on Ad Valorem Assessment Roll as of January, 2011 ), and a total of approximately $327 per year ($27 per month). 95 FY 2012/13 Normandy Shores Tentative Millage Rate September 12, 2012 Page 3 of 3 For the Normandy Shores taxing District, the value for each mill ($1.00 of ad valorem tax for each $1,000 of property value) is determined by the 2012 Certification of Taxable Value and has been set at $112,393. Florida Statutes permit a discount of up to five percent for early payment discounts, delinquencies, etc. Therefore, the 95 percent value of the mill is $106,773. The required millage without the homeowner-requested additional security camera maintenance and the living wage increase is 1.0592 (0.0343 mills below the FY 2011/12 rate). The proposed millage of 1.1444 is required to generate $122,200 in property tax revenues by the district. The rolled-back rate is the millage rate required to produce the same level of property tax revenue in FY 2012/13 as collected in FY 2011/12. The rate is calculated as 1.0063 or 0.0872 mills less than the millage rate adopted for FY 2011/12. Further, pursuant to State Statute, the City may elect to approve millage rates above the roll- back rate up to the constitutional cap of 1 0 mills subject to the following votes by the Commission or referendum: • Option 1: A majority of the approval of the Commission Millage is required to approve a millage up to 1.0513 (equivalent to a 4.47% increase in Property Tax revenues). The 4.47% increase is the state per capita personal income gain for the prior calendar year. • Option II: A two-thirds approval (5 of 7 votes) of the Commission is required to approve a millage up to 1.1564 (equivalent to a 10% increase in Property Tax revenues above Option 1). • Option Ill: A unanimous approval of the Commission or referendum is required to approve a millage above 1.1564 mills The proposed rate of 1.1444 requires therefore a two-thirds approval (5 of 7 votes) of the Commission. It must be noted that in accordance with State Statute, there is a 10 mill operating cap which cannot be exceeded without voter approval. Combining both millages from the dependent district (1.1444) and the principal taxing authority (6.1122) totals 7.2566 mills, which is 2.7434 mills less than the 10 mill cap. CONCLUSION The City Commission, acting in its capacity as the Board of Directors of the District, should adopt the attached Resolution which establishes a tentative millage and schedules the second and final public hearing. 96 RESOLUTION NO. ___ _ A RESOLUTION OF THE BOARD OF DIRECTORS OF THE NORMANDY SHORES LOCAL GOVERNMENT NEIGHBORHOOD IMPROVEMENT DISTRICT ADOPTING THE TENTATIVE AD VALOREM MILLAGE OF 1.1444 MILLS FOR FISCAL YEAR (FY) 2012/13 FOR THE NORMANDY SHORES LOCAL GOVERNMENT DISTRICT, WHICH IS THIRTEEN AND SEVEN-TENTH PERCENT (13.7%) MORE THAN THE "ROLLED-BACK" RATE OF 1.0063 MILLS, SUBJECT TO A SECOND PUBLIC HEARING SCHEDULED ON THURSDAY, SEPTEMBER 27, 2012 AT 5:02P.M. WHEREAS, for the purpose of providing security services within the Normandy Shores neighborhood area, the Mayor and City Commission adopted Ordinance No. 93-2881 on October 20, 1993, which authorized the creation of the Normandy Shores Local Government Neighborhood Improvement District (District); and WHEREAS, Section 200.065, Florida Statutes, specifies the method by which municipalities may fix the operating millage rate and adopt an annual budget for dependent taxing districts; and WHEREAS, the maximum millage that can be approved by a simple majority (4/7) vote is 1.0513; anything beyond that requires a 5/ihs vote; and WHEREAS, on July 18, 2012, the City Commission adopted Resolution 2012-27961 which set the proposed operating millage rate for the District at 1.14 78 mills for the purpose of providing security services within the District; and WHEREAS, subsequent to the July 18, 2012 meeting, the millage calculations were further refined, resulting to a lower millage rate; and WHEREAS, accordingly, on September 12, 2012, pursuant to Section 200.065 of the Florida Statues, the City Commission, acting as the Board of Directors of the District, held its first duly noticed public hearing to consider the Tentative Ad Valorem Millage and Tentative Operating Budget (FY 2012/13) for the District. NOW THEREFORE, BE IT DULY RESOLVED BY THE BOARD OF DIRECTORS OF THE NORMANDY SHORES LOCAL GOVERNMENT NEIGHBORHOOD IMPROVEMENT DISTRICT, that, following a duly noticed public hearing on September 12, 2012, the Board hereby adopts the Tentative Operating Millage rate of 1.1444 mills for the District for FY 2012/13, which is thirteen and seven-tenth percent ( 13.7%) more than the "Rolled-back" rate of 1.0063 mills, subject to a second public hearing scheduled on Thursday, September 27, 2012, at 5:02P.M. PASSED and ADOPTED this 12th day of September 2012. ATTEST: Secretary to the District 97 Chairperson of the District APPROVED AS TO FORM & LANGUAGE & Fnti EXECUTION ~~\ 01\''·(--" '\ \ ~ \ \~ City Attorney 'Pf~ If< oite I ( , 0 0 0 16 N E I TH U R S D A Y , AU G U S T 23 , 20 1 2 NE ' . . -- · · - ~ -~ · " - ·· - - · - · · · . o • • · · .. - ·· · - · · · -~ - · · · - · · - · • - .. . . . . . MI A M I BE A C H CI T Y OF MI A M I BE A C H NO T I C E OF PU B L I C HE A R I N G S Mi a m i H e r ~ l ~ : c o m I THE MI~MI HERAlD NO T I C E IS HE R E B Y gi v e n th a t pu b l i c he a r i n g s wi l l be he l d by th e Ma y o r an d Ci t y Co m m i s s i o n of th e Ci t y of Mi a m i Be a c h , Fl o r i d a , in th e Co m m i s s i o n Ch a m b e r s , 3r d Fl o o r , Ci t y Ha l l , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , Mi a m i Be a c h , Fl o r i d a , on We d n e s d a y , Se p t e m b e r 12 , 20 1 2 , to co n s i d e r th e fo l l o w i n g : 5: 0 1 p . m . , TH E FI R S T PU B L I C HE A R I N G AD O P T I N G TH E PR O P O S E D MI L L A G E RA T E S AN D BU D G E T S FO R FI S C A L YE A R 20 1 2 / 2 0 1 3 FO R TH E CI T Y OF MI A M I BE A C H . 5: 0 2 p . m . TH E FI R S T PU B L I C HE A R I N G AD O P T I N G TH E PR O P O S E D MI L L A G E RA T E AN D BU D G E T FO R FI S C A L YE A R 20 1 2 / 2 0 1 3 FO R JH E NO R M A N D Y SH O R E S LO C A L GO V E R N M E N T NE I G H B O R H O O D IM P R O V E M E N T DI S T R I C T . In q u i r i e s ma y be di r e c t e d to th e Of f i c e of Bu d g e t an d Pe r f o r m a n c e Im p r o v e m e n t (3 0 5 ) 67 3 - 7 5 1 0 . IN T E R E S T E D PA R T I E S ar e in v i \ e d to ap p e a r at th i s me e t i n g , or be re p r e s e n t e d by an ag e n t , or ·t o ex p r e s s th e i r vi e w s in wr i t i n g ·a d d r e s s e d ~o th e Ci t y Co m m i s s i o n , c/ o th e Ci t y Cl e r k , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , 1s t Fl o o r , Ci t y Ha l l , Mi a m i Be a c h , Fl o r i d a 33 1 3 9 . Co p i e s of th e s . e it e m s ar e av a i l a b l e fo r pu b l i c in s p e c t i o n du r i n g no r m a l · b u s i n e s s ho u r s in th e Ci t y Cl e r k ' s Of f i c e , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , 1s t Fl o o r , Ci t y Ha l l , Mi a m i Be a c h , Fl o r i d a 33 1 3 9 . Th i s me e t i n g ma y be co n t i n u e d , an d un d e r su c h ci r c u m s t a n c e s ad d i t i o n a l le g a l no t i c e wi l l no t be pr o v i d e d . Ra f a e l E. Gr a n a d o , Ci t y Cl e r k Ci t y of Mi a m i Be a c h Pu r s u a n t to Se c t i o n 28 6 . 0 1 0 5 , Fl a . St a t . , th e Ci t y he r e b y ad v i s e s th e pu b l i c th a t : if a pe r s o n de c i d e s to ap p e a l an y de c i s i o n ma d e by th e Ci t y Co m m i s s i o n wi t h re s p e c t to an y ma t t e r co n s i d e r e d at it s me e t i n g or it s he a r i n g , -s u c h pe r s o n mu s t en s u r e th a t a ve r b a t i m re c o r d of th e pr o c e e d i n g s is ma d e , wh i c h re c o r d in c l u d e s th e te s t i m o n y an d ev i d e n c e up o n wh i c h th e ap p e a l is to be ba s e d . Th i s no t i c e do e s no t co n s t i t u t e co n s e n t by th e Ci t y fo r th e in t r o d u c t i o n or ad m i s s i o n of ot h e r w i s e in a d m i s s i b l e or i r r e l e v a n t ev i d e n c e , no r do e s it au t h o r i z e ch a l l e n g e s or ap p e a l s no t ot h e r w i s e al l o w e d by la w . To re q u e s t th i s ma t e r i a l in ac c e s s i b l e fo r m a t , si g n la n g u a g e in t e r p r e t e r s , in f o r m a t i o n on ac c e s s fo r pe r s o n s wi t h di s a b i l i t i e s , an d / o r an y ac c o m m o d a t i o n to re v i e w an y do c u m e n t or pa r t i c i p a t e in an y Ci t y - s p o n s o r · e d pr o c e e d i n g . pl e a s e co n t a c t us fi v e da y s in ad v a n c e at (3 0 5 ) 67 3 - 7 4 1 1 (v o i c e ) or TT Y us e r s ma y al s o · c a l l th e Fl o r i d a Re l a y Se r v i c e at 71 i . Ad #7 2 5 . - · - - - ~ ~ ~ - - q COMMISSION ITEM SUMMARY Condensed Title: A resolution adopting the tentative operating budget for the Normandy Shores Local Government Neighborhood Improvement District for Fiscal Year (FY) 2012/13 subject to a second public hearing scheduled on Thursday, September 27, 2012 at 5:02p.m. Key Intended Outcome Supported: Increase visibility of police; Maintain crime rates at or below national trends. Supporting Data (Surveys, Environmental Scan, etc.): In 2009 Community Survey, both residents and businesses reported the following areas for the City to address in an effort to improve public safety: • Preventing crime (Residents: 44.9%, Business: 43.9%) Issue: Shall the Mayor and City Commission, acting in its capacity as the Board of Directors for the Normandy Shores Local Government Neighborhood Improvement District, approve the tentative operating budget for the District for FY 2012/13 in the amount of $188,000, subject to a second Public Hearing scheduled on Thursday, September 27, 2012, at 5:02P.M? Item Summary/Recommendation: The total operating expenditures to provide the current service level to this district is $188,000 for FY 2012/13. The City of Miami Beach General Fund is required to provide 35% of the total operating expenditures ($65,800), and the City has funded the 35% for each of the nineteen years since the District was established. The amount provided by the General Fund for this purpose in FY 2011/12 was $58,406. The $188,000 in FY 2012/13 represents a $21,125 increase (12.6%) from the FY 2011/12 budget of $166,875, due to the maintenance of homeowner-requested cameras and security gates, the estimated impact of the living wage ordinance on the security contract expenses, and Property Management charges primarily due to personnel cost increases, consistent with personnel cost increases in other funds. Advisory Board Recommendation: Financial Information· Source of Amount Account Approved Funds: 1 $ 122,200 Normandy Shores District I fo · I 2 65,800 General Fund OBPI Total $ 188,000 City Clerk's Office Legislative Tracking: s· Off s: lgn- Department Director Assistant City Manager City tlo/anager ~ ;{/ 0 l~2 AGENDA ITEM _r--,-\_._7 __ DATE Cf-·/ ;)-/2-MIAMI BEACH 99 MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov TO: FROM: DATE: SUBJECT: COMMISSION MEMORANDUM Mayor Matti Herrera Bower and Members of the City Com~sion Kathie G. Brooks, Interim City Manager /.fA /'-- September 12, 2012 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE NORMANDY SHORES LOCAL GOVERNMENT NEIGHBORHOOD IMPROVEMENT DISTRICT ADOPTING THE TENTATIVE OPERATING BUDGET FOR FISCAL YEAR (FY) 2012/13 SUBJECT TO A SECOND PUBLIC HEARING SCHEDULED ON THURSDAY, SEPTEMBER 27, 2012 AT 5:02P.M. ADMINISTRATION RECOMMENDATION Adopt the Resolution which establishes the tentative operating budget for the Normandy Shores Local Government Neighborhood Improvement District for FY 2012/13 in the amount of $188,000, subject to a second public hearing to be held on Thursday, September 27, 2012. BACKGROUND The Normandy Shores Local Government Neighborhood Improvement District (the District), a dependent taxing district of its principal, the City of Miami Beach, was established in 1994 to provide continual24-hour security to this gated community; FY 2012/13 represents its nineteenth year of operation. The District was established by Ordinance 93-2881, and has the authority "to levy an ad-valorem tax on real and personal property of up to two mills, provided that no parcel of property will be assessed more than $500 annually for such improvements". During FY 1998/99 the amount of annual funding to be provided by the City and the dependent status of the District were issues discussed by the Finance and Citywide Projects Committee. A determination was reached that the City would fund 35% of the annual cost of the operation of the community gate guard. This cost will eventually be funded from the golf course operation of the Normandy Shores Golf Course. It was further agreed that the City would continue to supplement the District at current levels until the Golf Course assumes this cost. On August 29, 2002, the Administration met with the Normandy Shores Local Government Neighborhood Improvement District representatives and agreed to eliminate the $500 cap on the highest valued home in the District. The enabling legislation was adopted by the Commission on September 25, 2002. This ensures that the City's contribution from the General Fund remains at 35% of the operating budget of the District. PROCEDURE The operating millage and budget for this dependent special taxing district must be adopted in accordance with Florida Statutes. This procedure requires that this Resolution be considered immediately after the tentative millage for Normandy Shores District has been adopted (See accompanying District Millage Agenda Item for details). 100 FY 2012/13 Normandy Shores Proposed Budget September 12, 2012 Page 2 of 2 ANALYSIS The total operating expenditures to provide the current service level to this district is $188,000 for FY 2012/13. The City of Miami Beach General Fund is required to provide 35% of the total operating expenditures ($65,800), and the City has funded the 35% for each of the nineteen years since the District was established. The amount provided by the General Fund for this purpose in FY 2011/12 was $58,406. The $188,000 in FY 2012/13 represents a $21,125 increase (12.6%)from the FY 2011/12 budget of $166,875, due to maintenance of homeowner- requested cameras and security gates, the estimated impact of the living wage ordinance on the security contract expenses, and Property Management charges primarily due to personnel increases. To provide the current level of security required by this district, the Administration recommends the proposed ad valorem millage of 1.1444 mills. This tax levy will generate proceeds of $122,200. The increase of 0.0509 mills from the prior year millage represents an annual increase of $14.53 to the City average 2012 homesteaded property of $285,571 taxable value (estimate based on Ad Valorem Assessment Roll as of January, 2011 ), a total of approximately $327 per year ($27 per month). The tentative operating budget for the District is as follows: Revenues Ad Valorem Tax $ 122,200 City's General Fund 65,800 Total $ 188,000 Expenses Security Service $ 164,500 Maintenance 23,500 Total $ 188,000 CONCLUSION The City Commission, acting in its capacity as the Board of Directors of the Normandy Shores Local Government Neighborhood Improvement District, should adopt the attached Resolution which establishes a tentative operating budget and schedules the second and final public hearing. KGB:TF 101 RESOLUTION NO. ___ _ A RESOLUTION OF THE BOARD OF DIRECTORS OF THE NORMANDY SHORES LOCAL GOVERNMENT NEIGHBORHOOD IMPROVEMENT DISTRICT ADOPTING THE TENTATIVE OPERATING BUDGET FOR FISCAL YEAR {FY) 2012/13 SUBJECT TO A SECOND PUBLIC HEARING SCHEDULED ON THURSDAY, SEPTEMBER 27,2012 AT 5:02P.M. WHEREAS, for the purpose of providing security services within the Normandy Shores neighborhood area, the Mayor and City Commission adopted Ordinance No. 93- 2881 on October 20, 1993, which authorized the creation of the Normandy Shores Local Government Neighborhood Improvement District (District); and WHEREAS for the purpose of providing security services within the District, a tentative budget has been developed to fund projected FY 2012/13 operating expenses; and WHEREAS, accordingly, on September 12, 2012, pursuant to Section 200.065 of the Florida Statues, the City Commission, acting as the Board of Directors of the District, held its first duly noticed public hearing to consider the Tentative Ad Valorem Millage and Tentative Operating Budget (FY 2012/13) for the District. NOW, THEREFORE, BE IT DULY RESOLVED BY THE BOARD OF DIRECTORS OF THE NORMANDY SHORES LOCAL GOVERNMENT NEIGHBORHOOD IMPROVEMENT DISTRICT, that, following a duly noticed public hearing on September 12, 2012, the Board hereby adopts the tentative operating budget for the District for FY 2012/13 as summarized and listed below, subject to a second public hearing scheduled on Thursday, September 27, 2012 at 5:02P.M.: Revenues Ad Valorem Tax City's General Fund Expenses Security Service Maintenance Total Total $ 122,200 65,800 $ 188,000 $ 164,500 23,500 $ 188,000 PASSED and ADOPTED this 12th day of September, 2012. ATTEST: Chairperson of the District APPROVED AS TO FORM & LANGUAGE & FOti EXECUTION q \ ~\ \0 Date' Secretary to the District 102 ~ 0 w 16 N E I T~ Y ~ ? p ~ , ~ ~ ~ ~ _ S _ T Z ~ , 20~ 2 NE Mi a r n i H e r a l d . c o m I THE MIAMI HERALD ~~ = = ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _ _ J - - - - - - - - - - - - - - ~ MI A M I BE A C H CI T Y OF MI A M I BE A C H NO T I C E OF PU B L I C HE A R I N G S NO T I C E IS HE R E B Y gi v e n th a t pu b l i c he a r i n g s wi l l be he l d by th e Ma y o r an d Ci t y Co m m i s s i o n of th e Ci t y of Mi a m i Be a c h , 1 Fl o r i d a , in th e Co m m i s s i o n Ch a m b e r s , 3r d Fl o o r , Ci t y Ha l l , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , Mi a m i Be a c h , Fl o r i d a , on We d n e s d a y , Se p t e m b e r 12 , 20 1 2 , to co n s i d e r th e fo l l o w i n g : 5: 0 1 p . m . , TH E FI R S T PU B L I C HE A R I N G AD O P T I N G TH E PR O P O S E D MI L L A G E RA T E S AN D BU D G E T S FO R FI S C A L YE A R 20 1 2 / 2 0 1 3 FO R TH E CI T Y OF MI A M I BE A C H . 5: 0 2 p . m . TH E FI R S T PU B L I C HE A R I N G AD O P T I N G TH E PR O P O S E D MI L L A G E RA T E AN D BU D G E T FO R FI S C A L YE A R 20 1 2 / 2 0 1 3 FO R TH E NO R M A N D Y SH O R E S LO C A L GO V E R N M E N T NE I G H B O R H O O D IM P R O V E M E N T DI S T R I C T . In q u i r i e s ma y be di r e c t e d t o th e Of f i c e of Bu d g e t <J . n d Pe r f o r m a n c e Im p r o v e m e n t (3 0 5 ) 67 3 - 7 5 1 0 . IN T E R E S T E D PA R T I E S ar e in v i t e d to ap p e a r at th i s me e t i n g , or be re p r e s e n t e d by an ag e n t , or · t o ex p r e s s th e i r vi e w s in wr i t i n g ·a d d r e s s e d ,t o th e Ci t y Co m m i s s i o n , c/ o th e Ci t y Cl e r k , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , 1s t Fl o o r , Ci t y Ha l l , Mi a m i Be a c h , Fl o r i d a 33 1 3 9 . Co p i e s of th e s e it e m s ar e av a i l a b l e fo r pu b l i c in s p e c t i o n du r i n g no r m a l ·b u s i n e s s ho u r s in th e Ci t y Cl e r k ' s Of f i c e , 17 0 0 Co n v e n t i o n Ce n t e r Dr i v e , 1s t . Fl o o r , Ci t y Ha l l , Mi a m i Be a c h , Fl o r i d a 33 1 3 9 . Th i s me e t i n g ma y be co n t i n u e d , an d un d e r su c h ci r c u m s t a n c e s ad d i t i o n a l le g a l no t i c e wi l l no t be pr o v i d e d . Ra f a e l E. Gr a n a d o , Ci t y Cl e r k Ci t y of Mi a m i Be a c h Pu r s u a n t to Se c t i o n 28 6 . 0 1 0 5 , Fl a . St a t . , th e Ci t y he r e b y ad v i s e s th e pu b l i c th a t : if a pe r s o n de c i d e s to ap p e a l an y de c i s i o n ma d e by th e Ci t y Co m m i s s i o n wi t h re s p e c t to an y ma t t e r co n s i d e r e d at it s me e t i n g or it s he a r i n g , -s u c h pe r s o n mu s t en s u r e th a t a ve r b a t i m re c o r d of th e pr o c e e d i n g s is ma d e , wh i c h re c o r d in c l u d e s th e te s t i m o n y an d ev i d e n c e up o n wh i c h th e ap p e a l is to be ba s e d . Th i s no t i c e do e s no t co n s t i t u t e co n s e n t by th e Ci t y fo r th e in t r o d u c t i o n or ad m i s s i o n of ot h e r w i s e in a d m i s s i b l e or ir r e l e v a n t ev i d e n c e , no r do e s it au t h o r i z e ch a l l e n g e s or ap p e a l s no t ot h e r w i s e al l o w e d by la w . To re q u e s t th i s ma t e r i a l in ac c e s s i b l e fo r m a t , si g n la n g u a g e in t e r p r e t e r s , in f o r m a t i o n on ac c e s s fo r pe r s o n s wi t h di s a b i l i t i e s , an d / o r an y ac c o m m o d a t i o n to re v i e w an y do c u m e n t or pa r t i c i p a t e in an y Ci t y - s p o n s o r e d pr o c e e d i n g , pl e a s e co n t a c t us fi v e da y s in ad v a n c e at (3 0 5 ) 67 3 - 7 41 1 (v o i c e ) or TT Y us e r s ma y al s o ·c a l l th e Fl o r i d a Re l a y Se r v i c e at 71 1 . Ad #7 2 5 . - - · - - ~ " f ~ ~ , . , - - - - - - - - - - - - . 1 1 THIS PAGE INTENTIONALLY LEFT BLANK 104