LTC 422-2013 Budget Advisory Committee Motion NA I AM I B EAC H
OFFICE OF THE CITY MANAGER
NO. LTC # 40 �- LETTER TO COMMISSION
TO: Mayor Philip Levine and Members f the City mmission
FROM: Jimmy L. Morales, City Manager
DATE: December 2, 2013
SUBJECT: Budget Advisory Committee Mo 'on
The Budget Advisory Committee would like you to be aware of the attached motion regarding
recommendations for the City's Resort Tax Reserve Policy, approved at their October 29, 2013,
committee meeting.
The City of Miami Beach is at relatively high risk for unexpected declines in resort tax revenue.
Resort Taxes are a volatile funding source as tourism is vulnerable to sudden changes in economic
conditions. Resort Taxes can be impacted by unanticipated events such as:hurricanes,red tides,oil
spills, currency conversion rates, terrorist events, etc. In addition, the Resort Tax Fund currently
transfers $32.9 million to the General Fund. , This increases the risk factor as any significant
negative impacts to resort tax revenues will impact programs and services in both the Resort Tax
Fund as well as the General Fund. The City does not currently have a formal reserve policy for the
Resort Tax Fund.
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City of Miami Beach
Budget Advisory Committee
Meeting of October 29, 2013
Members Present: Jack Benveniste, John Gardiner, Marc Gidney, Laurence Herrup, Stephen
Hertz, Dushan Koller, Jacqueline Lalonde, and David Lancz
Members Absent: No members absent
Motion made by Marc Gidney
Motion seconded by Stephen Hertz
Motion Text:
The Budget Advisory Committee requests the Mayor and Commission support recommendations for
the City's Resort Tax Fund Reserve Policy as follows:
1. The City of Miami Beach shall maintain a minimum reserve in the Resort Tax Fund of two
months of total revenue and shall have a goal of maintaining a minimum reserve equal to six
months of total revenue.
2. Said goal of six months of total revenue shall be established within the timeframe of ten
years effective as of October 1, 2014.
3. A permanent contingency reserve is hereby established in an amount not less than two
months of total revenues of the annual fiscal budget in the Resort Tax Fund to be held for
use in a public emergency if and when an emergency affecting life, health,property,public
safety, or a significant economic impact on resort tax collections, and the expenditure of
such funds is authorized by a five-sevenths (517) vote of the City Commission.
4. Said contingency reserve shall be increased or decreased annually but shall be maintained
at a minimum amount of two months of total revenues of the then existing Resort Tax Fund
Budget.
5. Prior to any expenditures from this reserve, the Mayor and City Commission must declare an
emergency affecting life, health,property,public safety, or a significant economic impact on
resort tax collections, and authorize said expenditures by a five-sevenths (517) vote. The
Administration is directed to restore the reserve to its aforementioned level in an amount of
not less than five hundred thousand dollars ($500,000) annually, by an amendment to the
Adopted Resort Tax Fund Budget.
6. The Budget Director should make an annual recommendation as to whether additional
deposits can be made in any given year toward achieving said goal.
The Budget Advisory Committee urges the Mayor and Commission to support the above request.
Motion Passage: Votes 8-0