20120912 FY 12_13 Proposed Millage Operating BudgetMIAMIBEACH
FY 2012/13 Proposed Millage
and Operating Budget
September 12, 2012
2
FY 2012/13 Budget Development
Setting Tentative Millage Rates:
General Fund 6.0039
Renewal & Replacement .1083
Operating Millage Rate 6.1122
GO Debt .2568
Total With Debt 6.3690
State Defined Rollback Rate 5.6184
Second Public Budget Hearing scheduled for September 27,
2012
3
FY 2012/13 Proposed Millage Rate
•FY 2010/11 rate increase of 0.56 mills to help offset $32M Deficit
•From 5.6555 to 6.2155
•Proposed Goal: Bring millage rate back to 5.6555 as property values
rise
•2012 property values have not reached FY 2009/10 levels.
•Adjustments and appeals through 2011 (the latest year available),
have not seen increased values
•Millage reduction in FY 2011/12 and the preliminary reduction
proposed for FY 2012/13 represent 18% of that goal
4
FY 2012/13 Proposed Millage Rate
Final/
Revised
Taxable
Value
(billions)
General
Fund/RDA
Operating
Millage
Change In
General
Fund/RDA
Operating
Millage
FY2006/07 22.74 22.26$ 7.3740
FY2007/08 26.85 26.14$ 5.6555 (1.7185)
FY2008/09 26.90 25.89$ 5.6555 (1.7185)
FY2009/10 24.70 23.24$ 5.6555 (1.7185)
FY2010/11 22.10 20.97$ 6.2155 (1.1585)
FY2011/12 21.98 20.76$ 6.1655 (1.2085)
FY2012/13 23.10 6.1122 (1.2618)
Budget Year
Taxable
Property
Values
(billions)
Millage Rates
Operating millage rates remain almost 1.3 mills lower than FY 2006/07.
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FY 2012/13 Proposed Millage Rate
Total Millage Reduced .0849 mills
FY 06/07 FY 11/12 FY 12/13 Inc/(Dec)
From
FY10/11
From FY
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 Service 0.2990 0.2884 0.2568 -0.0316
Total 7.6730 6.4539 6.3690 -0.0849 -1.3%-17%
City of Miami Beach Millage Rates
% Inc/(Dec)
6
FY 2012/13 Budget Development
Process began early and is ongoing
•June Committee of the Whole
•Finance & Citywide Projects Committee Meetings
•July 9, 2012
•July 25, 2012
•August 22, 2012
•Commission Budget Hearings
•September 12, 2012 – First Public Hearing
•September 27, 2012 – Second Public Hearing
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FY 2012/13 Budget Development
Increase in certified values:
• 5.0 percent Citywide and 4 .9 percent outside the City Center
Redevelopment Area – as compared to .6% decline Citywide last year
Jan. 1 2012
Value (in billions)
As of July 1 2011
(For FY 2011/12
Budget)
As of July 1 2012
(For 2012/13
Budget)
$
(in billions)%
RDA – City Ctr $ 3.4234 $ 3.6087 $ 0.1853 5.4%
South Pointe 3.4460 3.6181 $ 0.1721 5.0%
Other 15.1089 15.8455 $ 0.7366 4.9%
Total Citywide $ 21.9783 $ 23.0723 $ 1.0940 5.0%
Citywide Net
of City Ctr $ 18.555 $ 19.464 $ 0.9087 4.9%
Change from 2011
Value (Budget)
Jan. 1 2011
Value (in billions)
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FY 2012/13 Budget Development
•$3.3 million gap as of August 22, 2012
•Changes between August 22nd and the Proposed General Fund
Operating Budget:
•FY 2012/13 annual Police and Fire pension contribution
reduced by $400,000
•Recommended employee givebacks, driven by increases in
health and pension costs, reduced from $3 million to $2.6
million - $0.4 million set aside for future pension increases
•However, given projections of pension increases through FY
2014/15, recommending amending to $3 million in employee
givebacks and $0.4 million in a pension stabilization fund
•$2.2 million pension credit from FY 2011 /12 carried forward
as revenues to FY 2012/13, rather than deduct from
expenditures
•These changes reduced the gap to $2.9 million
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FY 2012/13 Budget Development
•Changes between August 22nd and the Proposed
General Fund Operating Budget (continued):
•Full pension contribution reflected in expenditures
for FY 2012/13; net available funds remains the
same
•Data entry clerk and administrative aide removed
from the proposed list of reductions
•General Fund operating costs reduced
•Offset by increases in capital and debt category
•Reflects anticipated Amaresco savings
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FY 2012/13 General Fund Proposed
Operating Budget
Approaches to Balance $2.9 million gap
•Employee givebacks of $3.0 million partially offsets the
increased employee health and pension costs
•Approximately $1 million in efficiencies
•$4 million resort tax transfer for tourism eligible
expenditures, and other small revenue enhancements
•Results in surplus of $1.1 million
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FY 2012/13 General Fund Proposed
Operating Budget
Additional Approaches to Balance
•Building Development fee changes reduced revenues by
$295,000
•Surplus reduced to $831,000
•(equivalent to $0.0443 mills –$5 and $13 respectively
for median and average homesteaded property)
•With Building Development fee changes total budget is
$256,680,000 – increase of $12.3 million (5 percent)
•Increased internal services charge backs including Police
liability claims and increases in debt service for
replacement vehicles and equipment
12
FY 2012/13 General Fund Proposed
Operating Budget
•$20 million (8 percent) more than the FY 2006/07 budget
•Despite pension contribution increases of $29 million during
same period
•Inflation from October, 2006 through June, 2012, a similar
period, was approximately 15 percent
•Annual contributions to the City’s two pension plans alone
represent more than $52 million (20 percent) in the General
Fund budget
•Budget Advisory Committee pension reform
recommendations presented August 29, 2012
•Allows pension reform to be incorporated into the current set
of contract negotiations
13
FY 2012/13 General Fund Proposed
Operating Budget
•Historically, the General Fund budget has increased between
6% and 8% annually, primarily due to increases in salary and
benefit costs
•$12.3 million (5%) increase in expenditures (net of Building
Development fee reductions)
•Includes reserve to be set aside for FY 2013/14, to help
offset the loss of carry forward of FY 2011/12 one-time
pension credit of $2.2 million in the General Fund.
•Operating costs are approximately $1.7 million less than the
FY 2011/12 budget
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FY 2012/13 General Fund Proposed
Operating Budget
•City Policy is to use one-time, non-recurring revenue for capital
expenditures or one-time expenditures and not subsidize recurring
personnel, operations, and maintenance costs.
FY 2012/13 General Fund one-time revenues:
•$3.4 million in prior year surplus (revenue in excess of expenditures)
specifically set aside for this purpose – similar surplus is anticipated to be
available at end of FY 2011/12 for use in FY 2013/14
•$1.5 million in Building Department reserves is anticipated to be available
through FY 2014/15
•Carry-forward savings from the $2.2 million allocation of the one-time
pension credit to the General Fund (not available for FY 2013/14)
•The total $7.1 million in one-time revenues is offset by a $1.4 million
transfer to capital
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FY 2012/13 Value of Services Tax
Dollars Paid
•Proposed millage rate for FY 2012/13 reduces the operating
millage by 0.0533 mills, together with debt service millage
reduction (0.0316 mills) for a total reduction of 0.0849 mills
•Together with the 0.05 mills reduced in FY 2011 /12, the total
operating millage reduction to-date is 0.1330 mills –
representing 18% of goal to reduce millage to 5.6555 mills
•Despite the reduction, the impact to homesteaded property
owners with proposed millage with a 3 percent CPI
adjustment to assessed values:
•$7 for a median value property
•$16 for an average value property
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FY 2012/13 Value of Services Tax
Dollars Paid
•Proposed General Fund operating budget includes:
•$3.5 million in service enhancements, which includes $0.7 million in service enhancements in
the Building Department - offset by increased revenue, $2.85 million in enhancements
•Equivalent to 0.1520 mills and an impact of $19 and $43 to the median and average value
homesteaded property
•Police Service Enhancements include:
•6 police officers for Washington Avenue;
•4 police officers for a crime suppression team;
•2 officers for North Beach;
•Additional overtime for homeless outreach; and
•Additional staffing for records unit and detention center
•Enhanced internal controls in Police Internal Affairs and through a regular outside audit of
high risk areas
•Two positions to help manage leases/rental contracts and monitor special events/concessions
•Grants software and equipment needs at the Colony Theatre
•$1.4 million transfer for funding Pay-As-You -Go funding for capital projects
*Note: The enhancements to Police services has been amended to exclude vehicles based on a
review of the Police Department’s fleet for a savings of $266,000 in FY 2013/14
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FY 2013/14 Fiscal Challenges
•Loss of one-time pension credit being used in FY 2012/13 ($2.2
million in General Fund)
•Property values unknown
•FY 2012/13 wage concessions not yet negotiated
•Pension reform not yet implemented
•Even with growth in property values, reductions in millage will be
challenged by increasing pension costs
•FY 2013/14 is the last of 5 years in recognizing the major market
decline of FY 2007/08
•Although less significant, market declines occurred in FY 2008/09
and 2010/11
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FY 2012/13 Proposed Enterprise
Fund Budgets
•Sanitation, Water, Sewer, Stormwater, Parking, and Convention Center
•$161.1 million - $4.4 million increase (2.8 percent)
•Increases in salary, pension, and health cost similar to the General
Fund; the Sanitation Department Proposed Budget incorporated
reduced personnel costs and increased use of temporaries based
on historical information ($2.1 million)
•Increases in Sewer treatment and DERM fees charged by Miami-
Dade County ($4.6 million) – with associated increases in sewer
revenues collected by the City
•Increases in funding for future renewal and replacement projects
and equipment determined by prior year depreciation amounts ($2.2
million)
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FY 2012/13 Proposed Enterprise
Fund Budgets
•These increases are offset by decreases in debt service payments by
the Stormwater Fund ($2 million)
•debt service for bonds sold in FY 2011/12 and associated
refinancing of existing bonds resulted in lower than budgeted debt
service costs
•Reduced operating costs in the Convention Center Fund offset by
reduced revenues due to an accounting treatment change of electrical
revenues ($1.2 million)
•Reduced funding needed to be transferred to the Stormwater Rate
Stabilization Fund ($1 million)
•Other miscellaneous reductions ($0.3 million)
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FY 2012/13 Proposed Internal
Service Fund Budgets
•Central Services, Fleet Management, Information Technology, Risk
Management and Property Management
•$59.3 million - $5.0 million increase (9.2 percent)
•Increases in salary, pension, and health cost similar to the General
Fund
•Increases in Police liability claims ($0.75 million)
•Increases in debt service for replacement of vehicles and equipment
($1.1 million)
•Costs are completely allocated to the General and Enterprise Fund
departments