2014-28674 Reso RESOLUTION NO. 2014-28674
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE. CITY OF MIAMI BEACH, FLORIDA, SETTING THE
PROPOSED MILLAGE RATES FOR FISCAL YEAR (FY)
2014/159 THE CALCULATED "ROLLED-BACK"RATE,AND
THE DATE, TIME, AND PLACE OF THE FIRST PUBLIC
HEARING; FURTHER AUTHORIZING THE CITY MANAGER
TO TRANSMIT THIS INFORMATION TO THE MIAMI-DADE
COUNTY PROPERTY APPRAISER IN THE FORM
REQUIRED BY SECTION 200.065, FLORIDA STATUTES
WHEREAS, Section 200.065, Florida Statutes, has specified the method by which
municipalities may fix the millage rate and adopt a n annual budget;g , and
WHEREAS, development of the FY 2014/15 budget began early in the year and has
included discussions with the Commission that included a review of priorities, economic
projections and their impacts on the budget, preliminary projected revenues and
expenditures; and
WHEREAS, 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 and providing structural
changes that enhanced capital funding and reserve; and
WHEREAS, maintaining and enhancing the City's priorities have become
increasingly more challenging in the last seven years: first through property tax reform
where tax rates were dramatically reduced; and subsequently with the decline in property
as well as increasing pension costs; and
WHEREAS, the July 1, 2014, Certification of Taxable Value from the Miami-Dade
County Property Appraiser reflects a 9.9 percent increase in Citywide property tax values
from the July 1, 2013, tax roll certification, a 8.1 percent increase in the City Center
Redevelopment Area(RDA), and a 10.3 percent increase in values outside the City Center
RDA, which impacts the City's General Fund revenues; and
WHEREAS, in the last seven years, the General Fund has absorbed $43 million in
reductions (and more than $50 million citywide and 276 positions across all funds) in a
General Fund budget that is$264.1 million in FY 2013/14,which is only 11%more than the
FY 2006/07 budget, despite pension contribution increases of$29 million over the same
period; and
WHEREAS, a total of approximately $26 million in employee "give-backs" were
achieved between FY 2009/10 and FY 2013/14,which, along with more than$50 million in
efficiencies and reductions, represents more than $76.8 million in combined "givebacks"
and reductions over 7 years; and
WHEREAS, between FY 1999/00 and FY 2011/12,the total combined City of Miami
Beach property tax rates declined approximately 2.24 mills and 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 to City funded $200 and $300 homeowner
dividends paid to homesteaded property owners in the City in FY 2005/06 and FY 2006/07;
and
WHEREAS, at the July 16th, 2014, Finance and Citywide Projects (FCWPC)
meeting the consensus was to set the proposed operating millage in July at the rate of the
millage rate of 6.0929, which is 0.0234 less than the FY 2013/14 rate; and
WHEREAS, the City of Miami Beach is required to advise the Miami-Dade County
Property Appraiser of the Proposed Millage Rates, the "Rolled-Back" Rate, and the date,
time, and place of the first public hearing; and
WHEREAS, the January 1, 2013, tax roll declined by $1.0 billion between the July
11 2013, valuation and the July 1, 2014, valuation due to appeals, adjustments, etc. ,which
is part of the reason the FY 2014/15 "rolled-back rate" is 0.7558 mills lower than the FY
2013/14 current millage rate; and
NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the following
recommendations of the Administration be and are hereby ratified for transmittal to the
Miami-Dade County Property Appraiser, as specified in Section 200.065, Florida Statutes:
1) Proposed Millage Rates for FY 2014/15
General Operating 5.7551 mills
Capital Renewal & Replacement 0.1083 mills
Total Operating Millage 5.8634 mills
Debt Service 0.2295 mills
Total Combined Millage 6.0929 mills
2) "Rolled-Back" Rate 5.1076 mills
3) The first public hearing on the proposed millage rate and the tentative budget for FY
2014/15 shall be held on Wednesday, September 10, 2014 at 5:01 P.M., in the City
Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach,
Florida.
PASSED and ADOPTED, this 23rd day of July, 2014.
ATTEST:
A ,, ILIP LEVINE
r � j,
R i r
PHAEL E. GRANA ,
Q?Al ED:
City r&torney Date
COMMISSION ITEM SUMMARY
Condensed Title:
RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA SETTING
THE PROPOSED OPERATING MILLAGE RATE; 2)THE REQUIRED DEBT SERVICE MILLAGE RATE; 3)THE
ALCULATED"ROLLED-BACK"RATE;AND,4)THE DATE,TIME,AND PLACE OF THE FIRST PUBLIC HEARING
O CONSIDER THE MILLAGE RATES AND BUDGETS FOR FISCAL YEAR (FY) 2014/15; FURTHER
UTHORIZING THE CITY MANAGER TO TRANSMIT THIS INFORMATION TO THE MIAMI-DADE COUNTY
ROPERTY APPRAISER IN THE FORM REQUIRED BY SECTION 200.065, FLORIDA STATUTES
Key Intended Outcome Supported:
Ensure expenditure trends are sustainable over the long term
Supporting Data(Surveys, Environmental Scan, etc.):
In the 2014 Community Survey, both residents and businesses reported the following area for the City related to
value for taxes paid:
*Percentage of residents rating the Overall Value of City services for tax dollars paid as excellent or good
(Residents:58%; Businesses 54%)
Item Summary/Recommendation:
FS 200.065, entitled "Method of Fixing Millage" establishes specific guidelines that must be used by all local
government entities in setting millage(property tax)rates. Under the statute,the City is required, within 35 days of
receipt of the "Certification of Taxable Value" (received July 1, 2014), to advise the Miami-Dade County Property
Appraiser of the proposed general operating millage rate, the calculated "rolled-back" rate and the date, time, and
place of the first public hearing to consider the proposed millage rates and tentative budgets for FY 2014/15. The
required Debt Service millage rate must also be set at the same time as the General Operating millage.
After setting the proposed operating millage rate,the Commission may, at any time prior to the final adoption, lower
the rates by adjusting priorities. However, increasing the millage rate may only be accomplished by an expensive
mailing and advertising process to every property owner on Miami Beach. The City's proposed operating millage
rate as well as that of other taxing authorities will be included in the Truth-in-Millage(TRIM)statement sent to each
property owner in the City on August 24th by the Property Appraiser.
The total proposed operating millage rate for FY 2014/15 is 6.0929 mills, which represents a slight decrease from
the FY 2013/14 rate of 6.1163 mills. The total proposed millage rate of 6.0929 includes a general operating millage
rate of 5.7551 and a Capital Renewal and Replacement millage of 0.1083.The proposed voted debt service millage
rate is reduced from 0.2529 to 0.2295. The budget development process is still underway,and the City's Proposed
Work Plan and Budget will be released later this summer. However, at this point in time, the surplus between
current service level revenues and expenditures is estimated at $2.45 million primarily due to an increase in
property values of 10.3 percent(net of City Center RDA). The Current Service Level (CSL)budget represents the
cost of providing the same level of service as in the prior fiscal year.
The proposed millage provides funding to offset increases to the CSL Budget in employee costs such as a 3
percent Cost of Living Adjustment (COLA); a 2 percent performance-based merit increase; additional steps for
Police Officer, Police Sergeant, Police Lieutenant, Firefighter I positions as well as implementation of hazardous
duty pay; higher health care costs; the impact of annualized costs for items added during FY 2013/14; higher
operating costs;and internal service fund charge-backs.
Advisory Board Recommendation:
Finance&Citywide Projects Committee on July 16th,2014
Financial Information:
Source of Funds: Amount Account
1
OB otal
Financial Impact Summary The July 1, 2014 Certification of Taxable Value from the Miami-Dade County
Property Appraiser reflects a 9.9 percent increase in Citywide property tax values from the July 1, 2013 tax roll
certification. Given that the City Center RDA had an 8.1 percent increase, the increase outside the City Center
RDA,which impacts the City's General Fund revenues,was 10.3 percent.The proposed millage for the FY 2014/15
budget results in increased property tax revenues in the General Fund of$14.3 million.
City Clerk's Office Legislative Tracking:
Sign-Offs:
D partment Director Assistant City Manager 't nager
AGENDA ITEM R1 F
qW �NAO.F.%. 7-,23-/y
DATE
MIAMI BEACH
City of Miami Beach, 1,700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeochfi.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members the City Co mission
FROM: Jimmy L. Morales, City Manager
DATE: July 23, 2014
SUBJECT: A_RESOLUTION OF THE MAYO AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA SETTING 1) THE PROPOSED OPERATING MILLAGE
RATE; 2)THE REQUIRED DEBT SERVICE MILLAGE RATE;3)THE CALCULATED
"ROLLED-BACK" RATE; AND, 4) THE DATE, TIME, AND PLACE OF THE FIRST
PUBLIC HEARING TO CONSIDER THE MILLAGE RATES AND BUDGETS FOR
FISCAL YEAR (FY) 2014/15; FURTHER AUTHORIZING THE CITY MANAGER TO
TRANSMIT THIS INFORMATION TO THE MIAMI-DADE COUNTY PROPERTY
APPRAISER IN THE FORM REQUIRED BY SECTION 200.065, FLORIDA
STATUTES.
ADMINISTRATION RECOMMENDATION
The Administration recommends that the Mayor and City Commission adopt the attached
resolution which authorizes the City Manager to transmit the following information to the Miami-
Dade County Property Appraiser:
1) Proposed Millage Rates for FY 2014/15:
General Operating 5.7551 mills
Capital Renewal & Replacement 0.1083 mills
Sub-Total Operating Millage 5.8634 mills (same as last year)
Voted Debt Service 0.2295 mills (0.0234 decrease from last year)
Total 6.0929 mills (0.0234 decrease from last year)
2) "Rolled-Back" Rate (Truth in Millage) 5.1076 mills
3) The first public hearing to consider the proposed millage rates and tentative budgets for FY
2014/15 shall be Wednesday, September 10, 2014 at 5:01 p.m., in the City Commission
Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida.
The"Rolled-Back"millage rate for FY 2014/15 is the millage rate required to produce the same
level of property tax revenues in the General Fund in FY 2014/15 as anticipated to be received
in FY 2013/14. It is important to note, that the January 1, 2013, tax roll Citywide declined by
almost $1.02 billion (4.1%) between the July 1, 2013 valuation and the July 1, 2014 valuation
due to appeals, adjustments, etc, which is part of the reason the FY 2014/15 "roll-back rate"is
0.7558 mills lower than the FY 2013/14 current millage rate and lower than it would be if the
rollback rate was only 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 approximately$0,24 billion during the same period of time.
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 2
The proposed millage provides funding to offset increases to the Current Service Level Budget
in employee costs such as a 3 percent Cost of Living Adjustment (COLA); a 2 percent
performance-based merit increase; additional steps for Police Officer, Police Sergeant, Police
Lieutenant, Firefighter I positions as well as implementation of hazardous duty pay;higher health
care costs;the impact of annualized costs for items added during FY 2013/14; higher operating
costs; and internal service fund charge-backs.
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.
In FY 2011/12 the City took its first step in that direction with a reduction in the millage rate of
'n b
0.05 mills. The millage rate for FY 2012/13 reduced the operating millage g y an additional
0.0746 mills. In the FY 2013/14 budget,the millage rate was reduced 0.2275 mills. Over three
years, this reduction represents 63 percent of the goal to get back to a millage rate of 5.6555.
The remaining goal for millage reduction is 0.2079.
The Administration is recommending a total combined millage rate for the City of Miami Beach of
6.0929, which represents a slight decrease of 0.0234 mills. The total proposed operating
millage has been kept flat and includes a general operating millage rate of 5.7551 and a General
Fund Capital Renewal and Replacement millage of 0.1083. The proposed voted debt service
millage rate is adjusted from 0.2529 to 0.2295, a decrease of 0.0234mills.
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 adjustment 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 2.6051 mills lower than in FY 1999/00 (30 percent), and 1.5801 mills lower
than 2006/07 (20.6%).
The budget development process is still underway, and the City's Proposed Work Plan and
Budget will be released later this summer. However, at this point in time, the surplus between
current service level revenues and expenditures is estimated at$2.45 million primarily due to an
increase in property values of 10.3 percent(net of City Center RDA). The Current Service Level
(CSL) budget represents the cost of providing the same level of service as in the prior fiscal
year.
BALANCING STRATEGIES
At the July 16th Finance and Citywide Projects Committee (FCWPC) meeting, the committee
gave direction to maintain the current tax rate for the preliminary millage, but directed the
administration over the summer to identify opportunities to potentially reduce the millage,as well
as offset increased funding for enhancements, as part of the process of balancing the budget.
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 3
result,efficiencies employee ivebacks and potential service reductions will be considered
Asare g P
in August prior to final budget adoption in September.
As with the preparation of budgets for the last five years,departments are continuing to analyze
and present their budgets from two perspectives: 1) a review 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. However, based on my review of department budgets to date, and given the
extensive reductions in recent years, I am not expecting to generate significant cost reductions
through efficiencies and service reductions.
In August,the FCWPC will meet on the 13th and 15th to review potential efficiencies, potential
service reductions and revenue enhancements, as well as finalize approaches to balance the
budget. The FY 2014/15 budget will be adopted in September,2013 after two budget hearings.
The budget development process is still underway and the City's Proposed Work Plan and
Budget will be released later this summer. However, at this point in time,the difference between
current service level revenues and expenditures is estimated at$2.45 million. Every million is
equivalent to approximately 0.0454 mills.
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
enhance capital funding and reserves.
However, these objectives became increasingly more challenging in the last seven years:first
through property tax reform where tax rates were dramatically reduced to offset increases in
property values; and subsequently with the decline in property values without revisions to the
property tax rate,as well as increasing pension costs. In the last seven years,the General Fund
has absorbed almost$43,million in reductions and reductions of approximately$50 million city-
wide and 271 positions across all funds.
Further, a total of approximately$20 million in employee "give-backs"were achieved between
FY 2009/10 and 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. In addition, the FY 2012/13 budget included an estimated $3.8 million in employee
"give-backs." With the adopted $0.6 million in efficiencies and $4.6 million in employee
givebacks incorporated in the Adopted Work Plan and Budget for FY 2013/14,the.7 year total of
reductions and em to ee aivebacks is almost$77 million.
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 4
FY 2013/14 Proposed 7-Year Total
General Fund $Impacts FT PT $Impacts FT PT
Public Safety ($250,000) - - ($8,021,095) (68.0) 1.0
Operations (186,000) (2.0) - ($6,126,867) (66.0) (23.0)
Administrative Support (139,000) (0.5) - ($3,186,694) 34.4) 1.0
Econ&Cultural Dev (42,000) - - ($1,235,426) (17.0) -
Citywide - - - ($1,619,642) - -
Subtotal $ (617,000) (2.5) - ($20,189,724) (185.4) (21.0)
Transfers - ($23,168,966) - -
Total $ (617,000) (2.5) - $ (43,358,690) (185.4) (21.0)
Internal Service Funds (373,000) (1.0) - ($3,871,225) (38.1) -
Enterprise Funds (122,000) (2.0) 2.0 ($3,651,021) (53.0) 10.0
GRAND TOTAL REDUCTIONS $ (1,112,000) (5.5) 2.0 $ (50,880,936) (276.5) (11.0)
Estimated Employee Givebacks 1 ($4,666,000) 1 ($25,933,360) - -
GRAND TOTAL REDUCTIONS AND GIVEBACKS $ (5,778,000) (5.5)1 2.0 1 $ (76,814,296) (276.5) (11.0)
*FY 2012/13 Budgeted included$3.8 savings for Employee Givebacks,of which only$918K were achieved
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 2013/14. 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 employees in the City's-retirement plans. For example, for
General Employees,the plan restructure adopted for new employees is projected by the
City's actuary to reduce the City's annual 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 were developed by the City's
Budget Advisory Committee(BAC)for the Fire and Police Pension Plan for consideration
as part of the FY 2013/14 adopted budget. While the specific BAC recommendations
were not implemented, the pension reform agreed upon by IAFF and FOP generated
savings is in excess of the BAC recommendations:$5.6 million in the first year and$140
million net present value over 30 years.
GENERAL FUND CURRENT SERVICE LEVEL BUDGET UPDATE
At the strategic planning retreat on June 4, 2014, the Commission was briefed regarding the
preliminary General Fund Current Service Level(CSL)budget. The CSL represents the cost of
providing the same level of services as in the prior year and serves as the baseline of funding for
the budget process.
Property taxes comprise 44% of the total General Fund revenue and are a key driver of CSL
revenues. The Property Appraiser provided the preliminary 2014 property values on June 1,
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 5
2014. The preliminary 2014 property values increased 9.4%,which resulted in an increase of
$11 million in General Fund property tax revenues.
CSL revenues were estimated to increase $12.7 million due to an $11 million increase in
property tax revenues(assumed keeping the millage rate the same), a $2.5 million increase in
building permit revenue, a $1 million increase in electric utility and franchise taxes, and a
decrease in prior-year set-aside(one-time revenue)of$1.8 million. The Resort Tax contribution
and Parking fund surplus contribution were assumed to be flat.
CSL expenditures were estimated to increase $10.7 million due to salary increase from a 3%
cost of living adjustment(COLA)and 0-2% merit pay, the impact of annualized costs for items
added during FY 2013/14, the impact of CSL department requests, and savings in net lower
pension contributions due to savings in Fire and Police form last year's pension reform offset by
a slight increase in MBERP pension contribution.
The preliminary CSL presented at the June 4th strategic planning retreat totaled a net surplus of
$2.0 million.
Since that time, the CSL has been updated with the fiscal impact of two items. On July 1St the
Property Appraiser provided the certified taxable values for 2014 which are the official numbers
used for the budget process. The certified taxable values increased 10.3%, net of the City
Center Redevelopment Area,which was higher than the preliminary taxable value of 9.4%. This
difference results in an additional $650,000 of property tax revenue.
On the expenditure side, additional windstorm insurance coverage of$335,000 was added to
the FY 2013/14 budget in the Risk Management fund at the June 11th Commission meeting.
The Risk Management fund is an internal service fund that charges out all of its costs to other
departments in various funds. The General Fund comprises approximately 60% of the Risk
charges so the impact to the General Fund for the FY 2014/15 CSL is $201,000.
The net result to the preliminary CSL surplus of $2.0 million given $650,000 of additional
property tax revenue and $201,000 of additional windstorm coverage expenditure is an updated
CSL surplus of$2.45 million.
.. _.................._._......................_._.........__......................_.....................__--..... ..._..... .............
FY 2014/15 CSL UPDATE
I
f Prellmi.nary CSt as of-,1une:4, 2014 .
:CSL Revenues $ 12.7 : million
......_.............................__.........._..._......._........._..........._._........................_....._................
:CSL Expenditures 10.7 million
:Net Surplus/(Shortfall) $ 2.0 million
updated C5L as of July 16 2014
. ....... _
:Preliminary CSL Surplus ' $ 2.0 million
_:.__....,. w..w..... _...M... .. .._.._,._....... ............ ....._ _ _._._ w. ... w
................................._.........._............_.._................................................_....................__..._._.........._.._._........_.........._...................
:Additional Property Tax Revenue 0.650 : million
_. ..
Additional Windstorm Coverage Expense (0.2) million t
Net Surplus/(Shortfall) $ 2.45 : million
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 6
DECISION-MAKING PROCESS
Development of the FY 2014/15 budget began early in the calendar year with budget staff and
departments working together to prepare'their current service level budgets. On June 4,2014,
the Commission held a retreat to review the community survey results,updated environmental
scan,and prioritize initiatives in the strategic plan..On July 18th the Finance&City-wide Projects
Committee (FCWPC) reviewed the Current Service Level budget, which -reflects budget
increases or decreases necessary to provide the same level of services in the coming year and
the proposed Capital Improvement Program,which details all of the City's capital projects over
the next five_ _years. In August, the FCWPC Will' on the�13.. ,.and`15th to review potential
efficiencies, potential service reductions and revenue enhancements; as well as finalize
approaches to balance the budget The FY 2014/15 Proposed Work Plan and Budget will
continue our focus on providing "value of services for tax dollars paid" and will.be adopted in
September, 2014, after two budget hearings on September 10th and September 30tH
STATUTORY REQUIREMENTS
FS 200.065,entitled"Method of Fixing,Millage establishes specific guidelines that must be used
by all local government entities in setting millage(property tax)rates. Under the statute,the City
is required, within 35 days of receipt of the "Certification of Taxable Value" (received July 1,
2014), to advise the Miami-Dade County Property Appraiser of the proposed general operating
millage rate, the calculated "rolled-back" rate and the date, time, and place of the first public
hearing,to consider the proposed millage rates and tentative budgets for FY 2014/15. The
required Debt Service millage rate must also be set at the same time as the general operating
millage.
After setting the proposed operating millage rate, the Commission may; at any time prior to the
final adoption, lower the rates by adjusting priorities. However, increasing the millage rate may
only be accomplished by an expensive mailing and advertising process to every property owner
on Miami Beach. The;City's proposed operating. millage rate as well as that of other taxing
authorities will be included in the Truth-in-Millage(TRIM)statement sent to each property owner
in the City.
ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH
On July 1, 2014, the City received the "2014 Certification of Taxable Value"from the Property
-Appraiser's Office stating that the taxable value for the City of Miami Beach is $27.1 billion
including$152.2 million in new construction. The preliminary 2014 value represents an increase
of$2.4 billion or 9.9 percent more than the July 1, 2013, Certification of Taxable Value of$24.6
billion and an increase of 9.3 percent, excluding new construction.
The comparative assessed values for the Miami Beach Redevelopment Agency City Center
redevelopment district increased from$3.9 billion to$4.2 billion an increase of$315 million or a
8.1 percent increase over 2013 certified values. In addition, assessed values within the
geographic area formerly known as the South Pointe redevelopment district increased from$3.9
billion to$4.3 billion an increase of$413 million, or a 10.5 percent increase in values over 2013
certified values. As.a result, taxable values in the areas outside the City Center RDA/South
Pointe area increased by 10.2 percent, from $16.9 billion to $18.6 billion, an increase of$1.7
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 7
Citywide values excluding City Center increased from $20.8 billion to$22.9 billion, an increase
of $2.1 billion or 10.3 percent. Values outside the City Center area determine General Fund
revenues.
COMPARATIVE ASSESSED VALUES
Jan. 1,2014
Value(in Change from 2013
Jan. 1 2013 Value(in billions) billions) Value(Budget)
As of July 1 Revised
2013 Value(For As of July 1
(For FY FY Change in 2013
2013/14 2013/14 2013 (For 2014/15 $
Budget) Projection) Values %Chg. Budget) (in billions) %Chg
RDA-City Ctr $ 3.8714 $ 3.6341 $ (0.2373) -6.1% $ 4.1867 $ 0.3153 8.1%
South Pointe 3.9148 3.7692 (0.1456) -3.7% 4.3275 $ 0.4127 10.5%
General Fund excl 16.8703 16.2354 (0.6349) -3.8% 18.5942 $ 1.7239 10.2%
S.Pte
Total Citywide $24.6565 $ 23.6387 (1.0178) -4.1% $ 27.1084 $ 2.4519 9.9%
Citywide Net of $20.7851 $ 20.0046 $ (0.7805) -3.8% $ 22.9217 $ 2.1366 10.3%
City Center
VALUE OF ONE MILL OF TAXABLE VALUE
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, the value for each mill is determined by the 2014
Certification of Taxable Value and has been set at $27.1 million. 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$25.7 million. Net of Center City RDA tax increment available to the
General Fund, the value of one mill at 95 percent is $22.0 million.
MAXIMUM MILLAGE DETERMINATION
For FY 2014/15,the proposed operating millage rate for general City operations is 5.8634,same
as in FY 2013/14. Based on the July 1,2014,Certification of Taxable Value,5.8634 mills would
generate approximately$150,975,000 in general tax revenues,an.increase of$13,632,000 over
FY 2013/14 budgeted property tax revenues Citywide(General Fund, City Center RDA and the
South Pointe area).
Further,the January 1,2013,tax roll Citywide declined by $1.0 billion between the July 1,2013
valuation and the July 1, 2014 valuation due to appeals, adjustments, etc.,which is part of the
reason that the FY 2014/15 "rolled-back rate" is significantly less than the FY 2013/14 current
millage rate. The area outside of City Center RDA declined by almost$0.8 billion.
Further, pursuant to recently enacted State legislation, the City may elect to approve millage
-
-rates abov-.e-the roll-back-r_ate__up to_the constitutionalcap_o-f 1-0 mills subject to the_following.
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 8
votes by the Commission or referendum:
• Option I: A majority of the approval of the Commission Millage is required to approve a
millage up to 7.2121 (equivalent to 3.15 percent increase in property tax revenues). The
3.15 percent increase is the state per capita personal income gain for the prior calendar
year.
• Option 11: A two-thirds approval (5 of 7 votes)of the Commission is required to approve a
millage up to 7.9333 (equivalent to a 10% increase in the ad valorem revenues above
Option 1).
• Option III:A unanimous approval of the Commission or referendum is required to approve a
millage above 7.9333 up to the 10 mill cap
The proposed operating millage rate of 5.8634 therefore-requires a majority approval (4 of 7
votes)of the Commission.
DETERMINING THE VOTED DEBT SERVICE MILLAGE LEVY
The general obligation debt service payment for FY 2014/15 is approximately $5.9 million.
Based on the July 1, 2014 Certified Taxable Value from the Property Appraiser, these bonds
would require the levy of a voted debt service millage of 0.2295 mills. This represents a
decrease of 0.0234 mills.
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 2013/14 and FY 2014/15 (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$2.18 million in renewal
and replacement funding.
%Inc/(Dec)
From From
FY 06107 FY 13/14 F'Y 14115 Anc/(Dec) FY13/14 FY 06/07
City of Miami Beach Millage Rates
Operating 7.1920 5.7551 5:7551 0.0000
Capital Renewal&Replacement 0.1820 0.1083` 0.1083 0.0000
Sub-total Operating Millage 7.3740 5.8634: 5.8634! 0.0000 0.0% -20.5%
Debt Service 0.2990 0.2529 0.2295` -0.0234 -9.3% -23.2%
Total 7.67301 6.1163: 6.0929 -0.0234 -0.4%
If these recommended millage rates are tentatively adopted,then the City of Miami Beach's total
operating millage will remain the same as the current year, and the voted debt service millage
will decrease by 0.0234 mills.
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 9
IMPACT OF JULY 23 PROPOSED MILLAGE LEVY IMPACT ON PROPERTY OWNERS
Homesteaded Properties
a
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 2014,the CPI has been determined to
be 1.5 percent and therefore,the increase is capped at 1.5%for increased values as of January
1, 2014.
Overall, based on the homesteaded properties in the January 1, 2013 homestead values as of
July 1,2013 valuation,the median value of homesteaded property in Miami Beach for 2013 was
$132,371, and the average$317,086. Applying the increase to the market value of all existing
homesteaded properties from the 2013 tax roll,and the 1.5 percent CPI adjustment,the impact
of the millage rate adjustment to homesteaded properties would be as shown in the following
table.
Homesteaded Properties
FY 2014/15
FY 2013/14 - with 1.5%CPI
Median Average Median T Average
2013 Preliminary Taxable Value $ 132,371 $ 317,086 $ 134,357 $ 321,842
city of Miami Beach
Operating $ 776 $ 1,859 $ 788 $ 1,887
Voted Debt 33 73 31 74
Total Miami Beach $ 809 $ 1,932 $ 819 $ 1,961
$Change in Taxes
Operating $ 12 $ 28
Voted Debt (2) 1
Total Miami Beach $ 10 $ 29
*Source:Miami-Dade County Property Appraiser's-2013-average-median-homestead-residential-values file
Non-Homesteaded Properties
The annual increase in market value of a non-homestead property is capped at 10 percent
(does not apply to school millages). The city-wide average increase in property values is 9.9
percent. The property value of individual properties may increase more or less than 9.9 percent,
but not more than 10 percent.
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.
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 10
Property Value, Millage and Property Tax Levy
Millage Rates Tax Levy(in millions)
General Fund
Total
Final/Revised (including S.
Taxable Total Combined Gneral Pointe,and
Taxable Values Taxable Property Values Citywide Fund/RDA Total Tax Levy Renewal&
Chart. Values(billions) (billions) Millage Millage including Debt Replacement)
FY 1997/98 $ 6.46 $ 6,40 9.2100 7.4990 $ 57.45 $ -46.78
FY 1998/99 $ 6.97 $ 6.87 8.9830 7.4990 $ 60.37 $ 44.66
FY 1999/00 $ 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 $ 1186 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
FY2010/1 1 $ 22.10 $ 20.97 6.5025 6.2155 $ 136.55 $ 112.14
FY201 1/12 $ 21.98 $ 20.75 6.4539 6.1655 $ 134.75 $ 1 1 1.29
FY2012/13 $ 23.07 $ 22.02 6.3477 6.0909 $ 139.10 $ 114.32-
FY2013/14 $ 24.66 $ 23.64 6.1163 5.8634 $ 143.26 $ 117.41
FY2014/15 $ 27.10 6.0929 5.8634 $ 156.89, $ 129.29
Further, although the City increased the operating tax rate by 0.56 mills in FY 2010/11, the City
has decreased the millage by 0.3521 mills in the last three years and the combined millage rate
overall remains approximately 2.6 mills lower or 30%, than it was in FY 1999/00.
TOTAL COMBINED MILLAGE
10.0000
9.0000 .. ... ------ - -- ----
8.0000 7
v►
7.0000 - - -
Q!
�+ 6.0000
l0 _-
4 5.0000 - t- ... ..- _
fQ
4.0000
3.0000
2.0000 ..
1.0000
0.00oo - ;. T T..
98. 99 00 01 02 03 04 05 06 07 08 '09 10 21 12 13 14 15
Fiscal Years
FY 2014/15 Proposed Millage Rate
July 23, 2014
Page 11
FIRST PUBLIC HEARING
The first public hearing on the proposed millage rates and tentative budgets for FY 2014/15
must be held no later than 80 days or earlier than 65 days from the start of the TRIM("Truth In
Millage")calendar(July 1 st). Other guidelines are: 1)the public hearing cannot be scheduled on
a Sunday or on those days utilized by Miami-Dade County or the Miami-Dade County School
Board for their public hearings; and 2) if on a day other than Saturday, the public hearing must
be after 5:00 P.M.
Based on these guidelines, the first hearing must be held between September 3rd and
September 18th. These dates are unavailable for the following reasons:
September 7 and 14 Sundays
September 4 and 18 Proposed dates for Miami=Dade County Public Hearings
September 3 Miami-Dade County School Board Public Hearing
Of the remaining days, it is recommended that the first public hearing be set for Wednesday,
September 10, 2014, at 5:01 P.M., in the City Commission Chambers, City Hall, and 1700
Convention Center Drive, Miami Beach, Florida.
JLM/JW