2010-27356 ResoRESOLUTION NO. 2010-27356
and funds; and
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING THE FIRST
AMENDMENT TO THE GENERAL, AND INTERNAL SERVICE
FUNDS BUDGETS FOR FISCAL YEAR (FY) 2008/09 TO
APPROPRIATE PRIOR YEAR ENCUMBRANCES AND AMEND
CERTAIN BUDGETS.
WHEREAS, Florida Statutes prohibit the over expenditure of departmental budgets
WHEREAS, the budget for the City Attorney, Building Development, and
Community Services, as well as the Capital Investment & Upkeep Account reflect additional
expenses in excess of budget that are offset by increased revenue and expenditure savings in other
areas; and
WHEREAS, the Administration has performed a detailed review and it is anticipated
that the General Fund will have an overall operating budget surplus of $5.35 million; and
WHEREAS, the City's financial policies adopted pursuant to Resolution 2006-
26341 and Resolution 2002-24764 require one time revenues (such as the year-end surplus) must
be used for non-recurring expenses, and that at least half of each annual year-end surplus must be
allocated to the City's Capital Reserve Fund; and
WHEREAS, however, the City's Capital Reserve was established in FY 2005/06 at
a time when the industry was at a peak, with project bids often coming in significantly higher than
budgeted; today is a very different market, with construction bids being received significantly under
project budgets; and the Capital Reserve has accumulated approximately $12 million in funding; and
WHEREAS, the City has performed an updated analysis of building permit fee
revenues and building department expenses pursuant to Florida Statute that requires that
unexpended building fee revenues be carried forward to future year to fund allowable activities in
enforcing the Florida Building Code, and this analysis has shown the carry forward balance to be
$12.5 million through September 30, 2009 of which $4.5 million was funded in FY 2007/08, primarily
due to the ongoing review of the application of building permit fee ordinance, and the
implementation of new processes which required up-front and back-end disclosure of the actual cost
of remodeling and square footage of new facilities, over the last three years, and the City needs to
continue to increase funding in the building reserve with the $1.7 million in Building revenues net of
Building expenditures received in FY 2008/09; and
WHEREAS, as a result, it is recommended that the Commission waive the policy
that requires that at least half of the FY 2008/09 year-end surplus be used to fund the City's Capital
Reserve; and
WHEREAS, it is recommended that the General Fund budget be increased by using
the FY 2008/09 year-end $5.3 million surplus as follows $3.6 million to be set aside in a reserve for
one-time/non-recurring expenses in the FY 2010/11 budget; and $1.7 million to a reserve for future
Building Department needs; and
WHEREAS, the Internal Service Fund Budgets of the Central Service and Risk
Management Funds require an amendment; the Central Services Fund exceeded its budget by
$49,126 and The Risk Management Fund exceeded its budget by $3,040,274 offset by charges to
departments and use of retained earnings.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the policy is waived for FY
2008/09 requiring that fifty percent of year-end surplus in the General Fund be used to increase
funding in the City's Capital Reserve Account; and that the first amendment to the Fiscal Year
2008/09 General Fund and Internal Service Funds budgets is adopted as shown on the following
pages:
GENERAL FUND
REVENUES
OPERATING REVENUES
Property Tax (5.5472)
Property Tax (5.5472)-So Pt Costs
Property Tax (0.1083)-Capital R & R
Property Tax -Norm Shores (0.7227)
Other Taxes
Licenses and Permits
Intergovernmental
Charges for Services incl. Golf Courses
Fines and Forfeits
Interest
Unrealized Gains/(Loss) -Investments
Rents and Leases
Miscellaneous
Other- Resort Tax
Other -Non-Operating
SubTOtal
Total Net of Unrealized Gains/(Loss)
FY 2008/09 Changes in FY 2008!09
Adopted Rev/Exp Rec. Additional Amended
Budget Appropriation Appropriation Budget
$ 113,704,841 $ (2,920,546) $ 0 $ 110,784,295
10,014,389 0 0 10,014,389
2,218,974 0 0 2,218,974
98,981 0 0 98,981
24,001,750 1,685,916 0 25,687,666
14,807,042 4,797,083 0 19,604,125
10,001,420 (447,428) 0 9,553,992
10,937,981 (1,556,481) 0 9,381,500
2,075,000 (287,314) 0 1,787.686
6,310,000 (678,743) 0 5,631.257
0 2,317,283 0 2,317,283
4,483,002 401,213 0 4,884,215
7,685,555 (259,159) 0 7,426,396
21,865,440 0 0 21,865,440
7,162,550 5,958 0 7,168,508
$ 235,386,925 $ 3,057,782 $ 0 $ 238,424,707
$ 235,386,925 $ 740,499 $ 0 $ 236,107,424
FY 2008/09 Changes in FY 2006/09
Adopted RevlExp Rec. Additional Amended
GENERAL FUND Budget Appropriation Appropriation Budget
APPROPRIATIONS
Department
MAYOR&COMMISSION $ 1,461,678 (89,291) $ 0 $ 1,372,387
CITY MANAGER 2,351,552 (71,222) 0 2,280,330
Communications 1,084,579 (197,694) 0 886,885
BUDGET 8 PERFORMANCE IMPROVE 1,991,966 (212,953) 0 1,779,013
FINANCE 4.216,476 (123,742) 0 4,092,734
Procurement 919,616 (27,671) 0 891,945
HUMAN RESOURCES 1,868,568 (213,339) 0 1,655,229
CITY CLERK 1,561,692 (86,868) 0 1,474,824
CITY ATTORNEY 4,283,893 1,023,641 0 5,307,534
ECONOMIC DEVELOPMENT 901,374 (15,640) 0 885,734
BUILDING 8,990,621 429.022 0 9,419,643
PLANNING 3,127,421 (72,921) 0 3,054.500
TOURISM & CULTURAL DEVELOPMENT 2,968,414 (48,744) 0 2,919,670
CODE COMPLIANCE 4,237,038 (68,193) 0 4,168,845
COMMUNITY SERVICES 441,561 18,707 0 460,268
HOMELESS SERVICES 718,268 (92,187) 0 626,061
PARKS 8, RECREATION 31,045,463 (2,658,650) 0 28,386,813
PUBLIC WORKS 6,513,259 (42,971) 0 6,470,288
CAPITAL IMPROVEMENT PROJECTS 3,578,721 (366,899) 0 3,211,622
POLICE 80,798,978 (169,159) D 80,629,619
FIRE 49,790,544 (779,431) 0 49,011,113
Citywide Accounts-Other 11,463,991 (785,457) 0 10,678,534
Citywide Accounts-Normandy Shores 152,278 0 0 152,278
Sub Total General Fund $ 224,467,951 $ (4,651,662) $ 0 $ 219,816,289
Transfers
Capital Reserve Fund $ 2,500,000 $ 0 $ 0 $ 2,500,000
Pay-As-You-Go Capital Fund 4,500,000 4,500,000
Capitallnvestment Upkeep Account 580,000 34,979 614,979
Info & Comm Technology Fund 1.100,000 1,100,000
Reserve Future Building Dept Needs 1,700,000 1,700,000
Reserve -Future Budget Shortfalls 0 3,657,182 3,657,182
GASB 45 Reserve-OPEB 0 0
CAPITAL RENEWAL & REPLACEMENT 2,218,974 0 2,218,974
Sub Total Transfers $ 10,898,974 $ 34,979 $ 5,357,182 $ 16,291,135
Total General Fund $ 235,366,925 E (4,616,683) $ 5,357,182 $ 236,107,424
FY 2008109 Changes in FY 2008/09
Adopted Rev/Exp Rec. Additional Amended
Budget Appropriation Appropriation Budget
ENTERPRISE FUNDS
APPROPRIATIONS
Convention Center $ 17,372,626 $ 0 $ 0 $ 17,372,626
Parking 31,013,618 0 0 31,013,618
Sanitation 15,605,411 0 0 15,605,411
Sewer Operations 31,247,506 0 0 31,247,506
Stormwater Operations 9,196,112 0 0 9,196,112
Water Operations 27,134,743 0 0 27,134,743
Total Enterprise Funds $ 131,570,016 $ 0 $ 0 $ 131,570,016
Total General and Enterprise Funds $ 366,936,941 $ (4,616,683) $ 5,357,182 $ 367,677,440
INTERNAL SREVICE FUNDS
APPROPRIATIONS
Central Services $ 855,411 $ 49,126 $ 0 $ 904,537
Fleet Management 8,704,379 0 0 8,704,379
Information Technology 13,799,605 0 0 13,799,605
Property Management 9,499,118 0 0 9,499,118
Risk Management 17,704,575 3,040,274 0 20,744,849
Total Internal Service Funds $ 50,563,088 $ 3,089,400 $ 0 $ 53,652,488
Passed and adopted this 10th day of March 2010.
Mayor
ATTEST:
~u~ ~~ ~
City Clerk
APPROVED AS TO
FORM & LANGUAGE
8-.FOR EXECUTION
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COMMISSION ITEM SUMMARY
Condensed Title:
A resolution to adopt the first amendment to the General and Internal Service Funds Budgets for Fiscal Year i
(FY) 2008/09 to appropriate prior year encumbrances and amend certain budgets.
mtenaea outcome
Ensure expenditure trends are sustainable over the long term
Improve the Citv's overall financial health and maintain overall bond rating
Supporting Data (Surveys, Environmental Scan, etc.):
• The City has performed an updated analysis of building permit fee revenues and building department expenses.
Pursuant to Florida Statute, it is required that unexpended building fee revenues be carried forward to future years
to fund allowable activities in enforcing the Florida Building Code. This analysis has shown the carry forward
balance to be $12.5 million through September 30, 2009, ofwhich the city had set aside $4.5 million in a reserve as
of September 30 2008, leaving a balance owed of $8 million. It is recommended that funding in the building
reserve be increased with the $1.7 million in Building revenues net of Building expenditures received in FY
2008/09, with repayment of the remaining balance of $6.3 million owed to the Building Departmentfrom prioryears
to be re-evaluated at the end of FY 2009/10.
• The FY 2009/10 Adopted Budget is the third year of significant budget reductions by the City which cumulatively
reflect a reduction of almost $50 million and 245 positions, and the FY 2010/11 budget is once again anticipated to
be extremely challenging as we are anticipating further property value declines and further increases in pension
costs. Working with an assumption of a 15 percent decline in property values between January 1, 2009 and
January 1, 2010 (because that decline is similar to the decline in existing properties in the prior year) and a
projected increases in pension costs, a preliminary budget gap of $30 million has been identified as a point of
Issue:
Whether to ado t the first amendment to the FY 2008/09 O eratin Bud ets?
Item Summa /Recommendation:
Three General Fund departments as well as the Capital Investment Upkeep Account have FY 2008/09
expenses in excess of appropriations thereby requiring budget amendments. The year-end surplus in the General
Fund is estimated at $5.3 million, net of these impacts. On the expense side, impact of several pro-active initiatives
by the City to reduce expenses below the adopted budget given the continued deterioration of economic conditions
and the resulting impacts on the City's FY 2008/09 budget and for several years to come. These initiatives included
the continuation of a modified hiring freeze, delayed hiring of other positions, re-bidding of contracts where
appropriate to take advantage of the more competitive economic environment, close scrutiny of major purchases,
and continuous evaluation of opportunities to reduce costs in all departments. On the revenue side, there is an
estimated surplus of $740,499 over the adopted budget of $235,366,925, a difference of 0.3% . This increased
revenue was primarily due to increased telephone taxes (Other Taxes), increased building permit revenues (Licenses
and Permits) and increased revenues from rents and leases (Rents and Leases). These increases were partially
offset by reduced ad-valorem property taxes, intergovemmental,gnlf course revenues, miscellaneous revenue, and
fines and forfeit revenues. These revenue differences were anticipated in the FY 2008/09 third quarter projections
that were included in the Proposed FY 2009/10 Work Plan and Operating Budget.
Our financial policies require one time revenues to be used fornon-recurring expenses, and at/eastha/fof
each annual year-end surplus to be allocated to the Capital Reserve Fund. However, the City's Capital
Reserve was established when the industry was at a peak, and project bids were often coming in significantly
higher than budgeted. Today is a different market and the Capital Reserve has accumulated funding. As a
result, it is recommended that the Commission waive the requirement that at least half of the FY 2008/09 year-
end surplus be used to fund the City's Capital Reserve. Rather, it is recommended that the General Fund
budget be increased by using the $5.3 million surplus as follows: $3.6 million to be set aside in a reserve forone-
time/non-recurring expenses in the FY 2010/11 budget; and $1.7 million to a reserve forfuture Building Department
needs. In the Internal Service Funds budgets, the Central Services Fund exceeded its budget by $49,126 and
The Risk Management Fund exceeded its budget by $3,040,274 offset by charges to departments and use of
retained earnin s.
Financial Information:
Sour of Amount Account
Fun ~ $740,499 General Fund
2 $3,089,400 Internal Service Funds
O PI Total $3,829,899
Finan ial Im act Summa
Sinn-Offs:
De rt nt Di or Assistant City Manager City Manager
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AGENDA ITEM ~7 D
DATE 3'I (~-!O
m- MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, vrww.miamibe°chfl.gov
COMMISSION MEMORANDUM
To: Mayor Matti H. Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: March 10, 2010
SUBJECT: A RESOLUTION OF THE MAYOR D CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ADOPTING THE FIRST AMENDMENT TO THE
GENERAL AND INTERNAL SERVICE FUNDS BUDGETS FOR FISCAL YEAR
(FY) 2008/09 TO APPROPRIATE PRIOR YEAR ENCUMBRANCES AND AMEND
CERTAIN BUDGETS.
Adopt the Resolution amending the FY 2008/09 General Fund and Internal Service Funds
Budgets, appropriating funds to cover prior year encumbrances, and amends certain
department budgets.
GENERAL FUND ANALYSIS
The year-end budget to preliminary actual comparisons for General and Internal Service
Funds are presented in the following pages. It shows that, overall, there will bean operating
budget surplus of $5,357,182 (2.3%) in the General Fund. A summary of preliminary
General Fund Revenues and Expenditures as of September 30, 2009 is as follows:
Adopted 3rd Quarter Preliminary" Budget/
Budget Projection Actual/Enc Actual
General Fund FY 2008/09 as of 06/30/09 as of 1/31/10 Over/(Under)
Revenues $235,366,925 $236,369,089 $236,107,424 $ 740,499
Expenditures 235.366,925 231,850,522 230,750,242 (4,616,683)
Surplus/(Deficit) $ 0 $ 4,518,567 $ 5,357,182 $ 5,357,182
Note: * Includes encumbrances and excludes $2.3 million in Unrealized Gains on Investments.
This surplus is similar to the 3`d quarter projection for FY 2008/09 that was included in the FY
2009/10 Proposed Work Plan and Operating Budget distributed last August and reflect the
impact of several pro-active initiatives by the City to reduce expenses below the adopted
budget given the continued deterioration of economic conditions and the resulting impacts
on the City's FY 2008/09 budget and for several years to come. These initiatives included
the continuation of a modified hiring freeze, delayed hiring of other positions, re-bidding of
contracts where appropriate to take advantage of the more competitive economic
environment, close scrutiny of major purchases, and continuous evaluation of opportunities
to reduce costs in all departments. These initiatives resulted in the following savings to help
offset revenue shortfalls:
First amendment to the FY 2008/09 General Fund and Internal Service Funds Budgets
Page 2
• Approximately $1.5 million in savings was generated in the Parks and Recreation
Department from the delayed opening and takeover of maintenance services from the
contractor for South Pointe Park, through careful management of contracted
landscaping cycles, as well as salary savings and savings across multiple operating
accounts in the Recreation division.
• Approximately $1.2 million was also generated from savings in expenditures at the City
golf courses as a result of several cost savings measures introduced in response to
reduced demand and corresponding reduced revenues at the golf courses. In addition,
savings occurred because of the three month delay in opening of the newly renovated
Normandy Shores Golf Club.
Approximately $3.3 million in additional expenditures below budget across most
departments primarily due to salary savings.
These savings were offset by expenditures in excess of budget primarily due to the City
Attorney's Office for outside legal counsel due to Federal Court litigation involving the City's
effort to provide public access to the Flamingo Baywalk; and in the Building Department for
process improvement initiatives recommended by the Watson Rice performance and
organizational review and previously approved by the Commission. In addition, Community
Services (service for elderly, youth, etc.) expended in excess of its budget by $18,707 or
4.2% primarily due to overtime which should be paid by grants; and Citywide Accounts
transfers were in excess of budget by $34,979, less than 1 percent due to the carryover of
encumbrances from FY 2007/08 to FY 2008/09.
This resulted in net expenditure savings of approximately $4.6 million in the General Fund,
approximately 2 percent. With the exception of the City Attorney's Office which increased
from the 3ro quarter projection, and the Building and Parks and Recreation Departments
which decreased from the 3`d quarter projection, the expenditures are very similar to those
projected for FY 2008/09 as part of the information provided in Augustin the Proposed FY
2009/10 Work Plan and Operating Budget.
On the revenue side, approximately $3 million in additional revenues are reflected in the
City's financials, of which $2,317,283 area result of unrealized gains on investments
reflected on the City's financials which have anon-cash impact for FY 2008/09, resulting in
an actual surplus of $740,499 more than the adopted budget of $235,366,925, a difference
of 0.3% from the adopted budget. Governmental Accounting Standards Board Statement
#31 (GASB 31) implemented in 1997 requires the City to report its investments at fair
market value as if they were immediately liquidated on September 30 each year, and to
recognize these impacts as "unrealized gains or losses on investments" on the City's
financials, even though there is no cash impact until the investments are actually liquidated
in the future. Typically this has not had a significant impact on the City's financials. In the
last year, however, the impact was significant, primarily due to the fluctuations in interest
rates.
This increased revenue was primarily due to increased telephone taxes (Other Taxes),
increased building permit revenues (Licenses and Permits) and increased revenues from
rents and leases (Rents and Leases). These increases were partially offset by reduced ad-
valorem property taxes, intergovernmental, golf course revenues, miscellaneous revenue,
and fines and forfeit revenues. These revenue differences were anticipated in the FY
2008/09 third quarter projections that were included in the Proposed FY 2009/10 Work Plan
and Operating Budget, although building permit revenues increased further from the third
quarter projection.
First amendment to the FY 2008/09 General Fund and Internal Service Funds Budgets
Page 3
The City's financial policies adopted pursuant to Resolution 2006-26341 and Resolution
2002-24764 require one time revenues (such as the year-end surplus) mustbe used for
non-recurring expenses, and that at least half of each annual year-end surplus must
be allocated to the City's Capital Reserve Fund. However, the City's Capital Reserve
was established in FY 2005/06 at a time when the industry was at a peak, and project bids
were often coming in significantly higher than budgeted. Today is a very different market,
with construction bids being received significantly under project budgets, and at the same
time, the Capital Reserve has accumulated approximately $12 million in funding.
As importantly, the City has performed an updated analysis of building permit fee revenues
and building department expenses. Pursuant to Florida Statute, it is required that
unexpended building fee revenues be carried forward to future years to fund allowable
activities in enforcing the Florida Building Code. This analysis has shown the carryforward
balance to be $12.5 million through September 30, 2009, of which the city has set aside $4.5
million in a reserve. This is primarily due to the ongoing review of the application of building
permit fee ordinance, and the implementation of new processes which required up-front and
back-end disclosure of the actual cost of remodeling and square footage of new facilities,
over the last three years. The City needs to continue to increase funding in the building
reserve with the $1.7 million in Building revenues net of Building expenditures received in FY
2008/09. While it is recognized that the remaining balance of $6.3 million owed to the
Building Department from prior years should be repaid over a reasonable amount of time,
given the significant challenges being faced for FY 2010/11, it is recommended that no
funds be allocated at this time to reduce the $6.3 million, and ratherthe repayment schedule
be re-evaluated at the end of FY 2009/10.
The FY 2009/10 Adopted Budget is the third year of significant budget reductions by the City
which cumulatively reflect a reduction of almost $50 million and 245 positions, and the FY
2010/11 budget is once again anticipated to be extremely challenging as we are anticipating
further property value declines and further increases in pension costs. Working with an
assumption of a 15 percent decline in property values between January 1, 2009 and January
1, 2010 (because that decline is similar to the decline in existing properties in the prior year)
and a projected increases in pension costs, a preliminary budget gap of $30 million has
been identified as a point of departure for FY 2010/11.
In order to address a gap of such magnitude, we are looking at all available options including
potential revenue enhancements, further efficiencies, and pension reform. However, there is
also the possibility of potential further service reductions which could ultimately affect
employees. As a result, it is recommended that the Commission waive the requirement that
at least half of the FY 2008/09 year-end surplus be used to fund the City's Capital Reserve.
Rather, it is recommended that the FY 2008/09 General Fund budget be amended by using
the $5.35 million surplus as follows:
• $1.7 million to a reserve for future Building Department needs, including offsetting of the
discounted building fees adopted in FY 2009/10; and
• $3.65 million to be set aside in a reserve for one-time/non-recurring expenses in the FY
2010/11 budget.
It should be noted that, unlike prior years, this provides no additional funding from the
estimated year-end surplus for the City's FY 2008/09 accrued liability for post-employment
benefits (primarily retiree health insurance) pursuant to recently enacted reporting
requirements of Governmental Accounting Standards Board standards (GASB 45).
First amendment to the FY 2008/09 General Fund and Internal Service Funds Budgets
Page 4
Pursuant to the GASB 45 standard established in 2004, related to reporting of liabilities for
benefits paid to retirees other than pensions (OPEB), the City is now required to recognize
the liabilityfor OBEP benefits as incurred. However, it does not prescribe that these must be
funded. In FY 2007/08 the Cityfullyfunded the annual liability. The total unfunded liabilityfor
OPEB is estimated at $170,685,000 as of October 1, 2008. The annual cost for OPEB for
FY 2008/09, as determined by the City's Consultant, Healthcare Analytics, a division of
Gallagher Benefit Services, Inc., is $16,008,000, of which $7,571,000 was funded by
payments to retirees, and $1,528,877 was funded from the Enterprise Funds, the Internal
Revenue Funds, and Special Revenue Funds, thereby funding approximately60 percent of
the annual cost. The balance of $6,908,123 is recommended to not be funded at this time.
GENERAL FUND OPERATING REVENUES
Significant revenue variances are as follows:
1. Ad Valorem Property Taxes -Year-end collections of $110,784,295 are 2.6%
under the budget creating a net shortfall of $2,920,546. This is primarily due to
higher than anticipated property value appeals and approved by Miami-Dade County.
2. Other Taxes -This category includes franchise and utility taxes on services which
are sensitive to local economic indicators. Based on actual collections of
$25,687,666, an excess of $1,685,916 or 7.0%, resulted at year-end. This is
primarily due to an increase in revenues from taxes on phone service.
3. Licenses and Permits -This category includes licenses and building and special
use permits. Based on actual collections of $19,604,125 an excess of $4,797,083, or
32.4%, resulted at year-end. Of this amount, $4.4 million is building permit related
revenues primarily due to the ongoing review of the application of building permit fee
ordinance, and the implementation of new processes which required upfront and
back-end disclosure of the actual cost of remodeling and square footage of new
facilities.
4. Intergovernmental -This category includes state-shared revenues such as
cigarette, gas and sales taxes. Based on actual collections of $9,553,992, a shortfall
of $447,428, or 4.5%, resulted at year-end. This is mainly due to a decrease in
collections of taxes on sales due to the overall downturn in the economy.
5. Charges for Services -Golf Courses -This category includes fees collected at the
Miami Beach and Normandy Shores Golf Courses. Based on actual collections of
$4,925,718, a shortfall of $1,626,082, or 24.8%, resulted at year-end. This is
primarily as a result of reduced demand due to the downturn in the economy,
approximately two-thirds of which is offset by reduced expenses at the golf courses.
6. Charges for Services -Other -This category includes fees for copies, passports,
fire rescue, and other recreational programs. Based on actual collections of
$4,455,782, an excess of $69,601 resulted at year-end, a difference of less than 2%
of budget.
First amendment to the FY 2008/09 General Fund and Internal Service Funds Budgets
Page 5
7. Fines and Forfeits -This category includes traffic citations, and code and fire
violation fees. Based on actual collections of $1,787,686, a shortfall of $287,314, or
13.8%, resulted at year-end. This is due to lower than anticipated revenues from
traffic citations.
8. Interest -This category includes interest income from City investments. While the
financials reflect interest revenues of $7,948,540, $2,317,283 are as a result of
unrealized gains on investments reflected on the City's financials which are anon-
cash impact in Fiscal Year 2008/09. Based on actual collections of $5,631,257, a
shortfall of $678,743, or 10.8%, resulted at year-end. This is primarily due to lower
than budgeted interest rates for long term investments.
9. Rents and Leases -This category includes rents and leases on City-owned
facilities such as the Miami Beach Marina, Historic City Hall, and others. Projections
indicate that year-end revenues will exceed budget by $401,213 or 8.9%. This is
primarily due to revenues in excess of budget from the rental of the Miami Beach
Marina, and the Penrod's lease agreement.
10. Miscellaneous -This category includes concessions, planning fees, and other
reimbursements. Projections indicate that year-end revenues will be 3.4% below
budget or $259,159, due primarily to lower than anticipated revenues as a result of
savings in the CIP Department and therefore lower cost allocations to capital
improvement projects.
GENERAL FUND OPERATING EXPENDITURES
Significant department savings and overexpenditures in excess of $300,000 by General
Fund department are explained in the following pages.
Significant Savings
1. Parks & Recreation
Adopted 3rd Quarter Preliminary Budget/
Budget Projection Actual/Enc Actual
FY 2008/09 as of 6/30/09 as of 1/31/10 Over/(Under)
$23,881,553 $22,952,606 $22,398,381 $(1,483,172)
The Parks & Recreation Department spent 94% of its budget, reflecting $1,483,172
below budgeted expenditures primarily due to the delayed opening and takeover of
maintenance services from the contractor for South Pointe Park, through careful
management of contracted landscaping cycles, as well as salary savings and
savings across multiple operating accounts in the Recreation division.
2. Parks 8~ Recreation (Golf Courses)
Adopted 3`d Quarter Preliminary Budget/
Budget Projection Actual/Enc Actual
FY 2008/09 as of 6/30/09 as of 1/31/10 Over/(Under)
$7,163,910 $6,004,739 $5,988,432 $(1,175,478)
The Miami Beach and Normandy Shores Golf Courses spent less than 84% of its
budget, reflecting $1,175,478 below budgeted expenditures primarily due to reduced
First amendment to the FY 2008!09 General Fund and Internal Service Funds Budgets
Page 6
expenses at the Miami Beach Golf Club which reflect the decline in visitor and group
business as well as market conditions and the three month delay in opening of the
newly renovated Normandy Shores Golf Club.
3. Capital Improvement Program (CIP) Office
Adopted 3'~ Quarter Preliminary Budget/
Budget Projection Actual/Enc Actual
FY 2008/09 as of 6/30/09 as of 1/31/10 Over/(Under)
$3,578,721 $3,246,028 $3,211,822 $ (366,899)
This department underspent its budget by $366,899 or 10% due primarily to salary
savings from vacant positions.
4. Fire
Adopted 3`d Quarter Preliminary Budget/
Budget Projection Actual/Enc Actual
FY 2008/09 as of 6/30/09 as of 1/31/10 Over/(Under)
$49,790,544 $49,040,608 $49,011,113 $ (779,431)
The Fire Department expended approximately 98% of its budget and generated a year-
end surplus in the amount of $779,431. This is primarily due to salary savings from
vacant positions and due to turnover as higher salaried positions retired and were
replaced by lower salaried positions.
5. Citywide Accounts-Other
Adopted 3ro Quarter Preliminary* Budget/
Budget Projection Actual/Enc Actual
FY 2008/09 as of 6/30/09 as of 1/31/10 Over/(Under)
$11,463,991 $10,865,266 $10,678,534 $ (785,457)
The Citywide Accounts-Other underspent its budget by $785,457or 6.9% due primarily to
lower than anticipated Accumulated Leave Settlement payouts as well as not having to use
various funds that were set aside for contingencies.
Significant Overexaenditures
6. City Attorney's Office
Adopted 3`d Quarter Preliminary Budget/
Budget Projection Actual/Enc Actual
FY 2008/09 as of 6/30/09 as of 1/31/10 Over/(Under)
$4,283,893 $ 4,802,893 $5,307,534 $ 1,023,641
The City's Attorney's Office expended in excess of its budget by approximately $1
million primarily due to outside legal counsel expenses. These outside legal
expenses are primarily due to Federal Court litigation involving the City's effort to
provide public access to the Flamingo Baywalk.
First amendment to the FY 2008/09 General Fund and Internal Service Funds Budgets
Page 7
7. Building Department
Adopted 3`d Quarter Preliminary Budget/
Budget Projection Actual/Enc Actual
FY 2008/09 as of 6/30/09 as of 1/31/10 Over/(Under)
$8,990,621 $9,869,641 $9,419,643 $ 429,022
Although approximately $450,000 less than the prior quarterly projections (LTC#
104-2009 LTC# 150-2009) and the FY 2008/09 projection presented in the FY
2009/10 Proposed Work Plan and Budget in August 2009, the Building Department
has exceeded its budget due to ongoing process improvement initiatives discussed
in those projections. These initiatives were among 24 recommendations byWatson
Rice as part of their performance and organizational review of the Building
Department between 2008 and 2009. Building Permit revenues in excess of budget
($4.4 million) are more than sufficient to offset these additional expenditures. Of the
24 initiatives recommended byWatson Rice, the following had an impact on the FY
2008/09 expenditures for the Building Department:
o Central Records Automation
o Space Reconfiguration*
o Additional Training
o Internal Controls (CCTV, GPS)
*The space configuration project included reconfiguration for electronic plan review
including the third floor area to move building inspectors, records management,
creation of three additional plan review stations for improved customer service and
reconfiguration of the lobby to be more customer friendly.
GENERAL FUND BUDGET AMENDMENT
Although the total General Fund expenditure is below budget, Florida Statutes prohibit the
overexpenditure of departmental budgets and funds, a budget amendment is necessaryfor
those departments which projections indicate will overexpend their appropriation, and to
allow the appropriation for the additional transfers to the Building Operations Reserve and
the FY 2010/11 Reserve for One-Time/Non-Recurring Expenditures. A summary of the
resulting increases and decreases to revenues and expenditures and the resulting proposed
amended operating budget for FY 2008/09 is provided in the following section.
First amendment to the FY 2008/09 General Fund and Internal Service Funds Budgets
Page 8
FY 2008/09 Changes in FY 2008/09
Adopted Rev/Exp Rec. Additional Amended
GENERAL FUND Budget Appropriation Appropriation Budget
REVENUES
OPERATING REVENUES
Property Tax (5.5472) $ 113,704,841 $ (2,920,546) $ 0 $ 110,784,295
Property Tax (5.5472)-So Pt Costs 10,014,389 0 0 10,014,389
Property Tax(0.1083)-Capital R & R 2,218,974 0 0 2,218,974
Property Tax -Norm Shores (0.7227) 98,981 0 0 98,981
Other Taxes 24,001,750 1,685,916 0 25,687,666
Licenses and Permits 14,807,042 4,797,083 0 19,604,125
Intergovernmental 10,001,420 (447,428) 0 9,553.992
Charges for Services incl. Golf Courses 10,937,981 (1,556,481) 0 9,381,500
Fines and Forfeits 2,075,000 (287,314) 0 1,787,686
Interest 6,310,000 (678,743) 0 5,631,257
Unrealized Gains/(Loss)-Investments 0 2,317,283 0 2,317,283
Rents and Leases 4,483,002 401,213 0 4,884,215
Miscellaneous 7,685,555 (259,159) 0 7,426,396
Other- Resort Tax 21,865,440 0 0 21,865,440
Other-Non-Operating 7,162,550 5,958 0 7,168,508
SubTotal $ 235,366,925 $ 3,057,782 $ 0 $ 236,424,707
Total Net of Unrealized Gains/(Loss) $ 235,366,925 $ 740,499 $ 0 $ 236,107,424
APPROPRIATIONS
Department
MAYOR&COMMISSION $ 1,461,678 (89,291) $ 0 $ 1,372,387
CITY MANAGER 2,351,552 (71,222) 0 2,280,330
Communications 1,084,579 (197,694) 0 866,885
BUDGET & PERFORMANCE IMPROVE 1,991,966 (212,953) 0 1,779,013
FINANCE 4,216,476 (123,742) 0 4,092,734
Procurement 919,616 (27,671) 0 891,945
HUMAN RESOURCES 1,868,568 (213,339) 0 1,655,229
CITY CLERK 1,561,692 (86.868) 0 1,474,624
CITY ATTORNEY 4,283,893 1,023.641 0 5,307,534
ECONOMIC DEVELOPMENT 901,374 (15,640) 0 885,734
BUILDING 8,990,621 429,022 0 9,419,643
PLANNING 3,127,421 (72,921) 0 3,054,500
TOURISM & CULTURAL DEVELOPMENT 2,968,414 (48,744) 0 2,919,670
CODE COMPLIANCE 4,237,038 (68,193) 0 4,168,845
COMMUNITY SERVICES 441,561 18,707 0 460,268
HOMELESS SERVICES 718,268 (92,187) 0 626,081
PARKS & RECREATION 31,045,463 (2,658,650) 0 28,386,813
PUBLIC WORKS 6,513,259 (42,971) 0 6,470,288
CAPITAL IMPROVEMENT PROJECTS 3,578,721 (366,899) 0 3,211,822
POLICE 80,798,978 (169,159) 0 80,629,819
FIRE 49,790,544 (779,431) 0 49,011,113
Citywide Accounts-Other 11,463,991 (785,457) 0 10,678,534
Citywide Accounts-Normandy Shores 152,278 0 0 152,278
Sub Total General Fund $ 224,467,951 $ (4,651,662) $ 0 $ 219,816,289
First amendment to the FY 2008/09 General Fund and Internal Service Funds Budgets
Page 9
FY 2008!09 Changes in FY 2008109
Adopted Rev/Exp Rec. Additional Amended
GENERAL FUND Budget Appropriation Appropriation Budget
Transfers
Capital Reserve Fund $ 2,500,000 $ 0 $ 0 $ 2,500,000
Pay-As-You-Go Capital Fund 4,500,000 4,500,000
Capital Investment Upkeep Account 580,000 34,979 614,979
Info & Comm Technology Fund 1,100,000 1,100,000
Reserve Future Building Dept Needs 1,700,000 1,700,000
Reserve -Future Budget Shortfalls 0 3,657,182 3,657,182
GASB 45 Reserve-OPEB 0 0
CAPITAL RENEWAL & REPLACEMENT 2,218,974 0 2,218,974
Sub Total Transfers $ 10,898,974 $ 34,979 $ 5,357,182 $ 16,291,135
Total General Fund $ 235,366,825 $ (4,616,683) $ 5,357,182 $ 236,107,424
ENTERPRISE FUNDS
The City accounts for proprietary operations in Enterprise Funds. Convention Center,
Parking, Sanitation, Sewer, Stormwater, and Water are included in this grouping. No
amendments are anticipated for the Enterprise Funds at this time. We do not have
preliminary numbers for the Convention Center Fund at this time. This information will be
provided at a later date.
INTERNAL SERVICE FUNDS
The City accounts for those goods and services provided by one department to other
departments citywide on a cost reimbursement basis. Central Services, Fleet Management,
Information Technology, Property Management, and Risk Management (Self Insurance) are
included in this grouping.
Based upon our review, the Information Technology, Property Management and Fleet
Management Funds are projected to be under budget. However, it is necessary to amend
the appropriations for the Central Services and Risk Management Funds which our year-end
expenditure projections indicate will exceed their budget appropriation.
The Central Services Fund exceeded its budget by $49,126 or 5.7% primarily due to higher
than anticipated postage usage and their contribution to the OPEB Trust which had not been
known at the time of the development of the FY 2008/09 budget.
The Risk Management Fund exceeded its budget by $3,040,274 or 17.2% primarily due to
higher than anticipated actuarial liability for claims incurred but not reported primarily related
to Workman's Compensation. However, the increased operating expenditures are partially
offset by increased interdepartmental charges. The remaining $734,761, funded by retained
earnings results in increased non-cash deficit in the Risk Management fund related to these
potential future claims.
First amendment to the FY 2008/09 General Fund and Internal Service Funds Budgets
Page 10
INTERNAL SERVICE FUNDS
Central Services Fund
Revenue Appropriation
Interdepartmental Revenues $ 49,126
Total Revenue Increase $ 49,126
Expenditure Appropriation
Payroll and Fringes $ 16,312
Operating Costs 30,827
Capital 1,987
Total Expenditure Increase $ 49,126
Risk Management Fund
Revenue Appropriation
Interdepartmental Charges $ 1,631,492
Other/Interest 674,021
Retained Eamings* 734,761
Total Revenue Increase $ 3,040,274
*Use of Retained earnings will increase the deficit in the fund related to claims
incurred but not reported
Expenditure Appropriation
Payroll and Fringes $ (23,937)
Operating Costs 3,064,211
Total Expenditure Increase $ 3,040,274
CONCLUSION
It should be noted that this actual is preliminary in nature due to the fact that the City's
financial records will not be closed until after the external auditors complete their review.
Historically, this occurs in April, with the City's Comprehensive Annual Financial Report
(CAFR) For the Year Ended September 30, 2009, usually available in May. However, this
analysis has considered all year-end closing entries to date and typically, any additional
changes are minor in nature.
The attached Resolution will allow the first amendment to departmental appropriations within
the General Fund and Internal Service Funds Budgets to be enacted. This action is
necessary to complywith Florida Statutes which stipulate thatwe may not expend more than
our appropriations provide.
JMG:KGB:JC