LTC 345-2018 Fiscal Year (FY) 2017-18 Second Quarter AnalysisMIAMI BEACH
OFFICE OF THE CITY MANAGER
LTC# 345-2018
LETTE TO COMMISSION
TO: Mayor Dan Gelber and Members of e City Co f ission
FROM: Jimmy L. Morales, City Manager
DATE: June 21, 2018
SUBJECT: Fiscal Year (FY) 2017/18 Second Qu'rter Analysis
The purpose of this Letter to Commission (LTC) is to provide the Mayor and City Commission
with the status of the FY 2017/18 budget to actual revenue and expenses incurred for the
second quarter ending March 31, 2018, with projections through fiscal year-end September 30,
2018. Article IV of the City's Charter requires that "the City Manager shall make public a
quarterly report showing the actual expenditures during the quarter just ended against one
quarter of the proposed annual expenditures set forth in the budget."
The first six months of any fiscal year are not a guaranteed indication of the experience for the
remainder of the fiscal year, but do, however, provide a better glance at identifying any potential
issues compared to the first quarter of any fiscal year. Certain assumptions for both revenues
and expenditures have been made, which are still being further refined and adjusted for in later
projections as additional information becomes available. These assumptions, along with our
continued effort at managing the City's resources and ongoing adjustments to line item
revenues and expenditures throughout the year, will impact projections looking ahead.
The First Amendment to the FY 2017/18 operating budget adopted by the City Commission on
November 13, 2017, pursuant to Resolution No. 2017-30088, recognized a preliminary FY
2016/17 year-end surplus of approximately $8.1 million in the General Fund. Of this surplus,
$3.6 million was set aside for encumbrances and projects that were delayed in FY 2016/17,
$3.0 million was set-aside to be carried forward as part of the FY 2017/18 adopted budget, $1.5
million was set aside in reserves based on the Building Department's operations, which is
restricted for Building related activities, and $3.4 million was set aside for emergency
expenditures resulting from the impact of Hurricane Irma.
FY 2016/17
Estimated General Fund Year -End Surplus:
$ 8,076,000
Carryforward of FY17 Encumbrances
(2,403,000)
Carryforward of FY17 Appropriations
(1,139,000)
Building Reserve
(1,534,000)
FY17 Reserve Set -Aside for FY18
(3,000,000)
Sub -Total
$
0
Hurricane Irma Related Expenditures
(3,390,000)
Use of General Fund Emergency Reserves
3,390,000
Total
$
0
The First Amendment also appropriated $3.8 million in Enterprise Funds, $880,000 in Internal
Services Funds, and $2.8 million in Special Revenue Funds encumbrances and projects that
were delayed in FY 2016/17 and recommended to be carried forward in FY 2017/18. Other
items included: $791,000 re -aligned between the Fire and Emergency Management
LTC — FY 2017/18 Second Quarter Analysis
Page 2 of 12
departments as a result of the reorganization of the Public Safety Communications Unit•(PSCU);
$277,000 appropriated in the Fire Department for upgrade of its Priority Dispatch Software;
$200,000 appropriated in the Building and Planning Departments for upgrade of shared
Customer Enterprise Software; $200,000 appropriated in the Information Technology Special
Revenue Fund in order to effectively respond to the City's dynamic technology needs; and $1.0
million appropriated in the Sanitation Enterprise Fund for additional unanticipated expenditures
related to debris removal resulting from Hurricane Irma.
The Second Amendment to the FY 2017/18 operating budget adopted by Commission on April
11, 2018, pursuant to Resolution No. 2018-30278, recognized an additional $600,000 in the
Resort Tax (2%) Special Revenue Fund, based on current year two percent Resort Tax
collections, to support various cultural activations, as well as unforeseen needs for additional
City services during high impact periods such as Spring Break and Memorial Day. Also
appropriated was $221,000 in the Convention Center Enterprise Fund for temporary partitions
required in the Miami Beach Convention Center during events hosted due to the ongoing
renovation project; $42,000 in the Information Technology Internal Service Fund to continue
work being performed by New World Systems and Tyler Technologies; and $845,000 in
numerous Special Revenue Funds for projects detailed in the adopted Resolution.
It is important to note that the ensuing projections for all funds, as of March 31, 2018, include
the projected impact of the tentative agreement reached between the City and the
Communications Workers of America (CWA). The bargaining unit's current collective bargaining
agreement expired September 30, 2015. The City and CWA met and bargained numerous
times; however, on January 19, 2017, the City notified the Public Employees Relations
Commission that the City and CWA had reached an impasse. During this period, bargaining unit
members received zero cost of living adjustments or across-the-board wage increases. Since
Florida law gives final authority and responsibility to the City Commission to resolve an impasse,
a public hearing was held on April 13, 2018 by the City Commission. At the April 13, 2018
hearing, the City Commission concluded that "effective October 1, 2017, there shall be a three
percent across the board. wage increase for any CWA bargaining unit positions and a three
percent increase to the minimums and maximums of each job classification range," among other
items detailed in the tentative agreement, which was subsequently presented and approved by
the City Commission on June 6, 2018. Across all funds, the projected impact of the three
percent across-the-board wage increase effective October 1, 2018 is estimated at $455,000.
The adopted FY 2017/18 budget included a three percent cost -of -living adjustment for the CWA,
effective the pay period ending July 9, 2018.
GENERAL FUND
General Fund Second Quarter Status
An analysis of the actual six-month operating revenues and expenses for the period of October
1, 2017 through March 31, 2018 reveals an operating budget surplus of $83.3 million. While the
actual surplus as of March 31, 2018 seems unusual compared to the projection for the current
fiscal year ending September 30, 2018, it should be noted that the City receives a greater
percentage of ad valorem taxes during the earlier months of the fiscal year. Ad valorem tax
revenues represent approximately 52.4 percent of total budgeted revenues and represent
67.1 % of the revenues received during the first six months of the fiscal year.
As of March 31, 2018, revenues collected were approximately 68.9% of the current amended
budget, or $230.8 million. Expenditures were approximately 44.1% of the current amended
budget, or $147.5 million; however, there are often delays in expenditures until the close-out of
the fiscal year.
LTC — FY 2017/18 Second Quarter Analysis
Page 3of12
FY 2017/18 Budget
General Fund
Adopted Budget
Amended Budget
1/2 of Amended Budget
Actuals as of
03/31/18
Variance from 1/2
Amended Budget
Over / (Under)
Revenues
Expenditures
$ 330,850,000
$ 330,850,000
$ 334,869,000
$ 334, 869, 000
$ 167,434,500
$ 167,434,500
$ 230,773,473
$ 147,514,334
$ 63,338,973
$ (19,920,166)
Excess of Revenues Over/(Under) Expenditures $ 83,259,139
General Fund Year -End Projections
Projected year-end operating revenues and expenditures through September 30, 2018 provide
a more realistic snapshot of any anticipated year-end surplus or shortfall as of this point in time.
Further, while the actual revenues and expenses presented are as of March 31, 2018, some
projections have incorporated more current information, if available.
A summary of the preliminary General Fund revenues and expenditures projected through
September 30, 2018 reflects a year-end surplus of $3.2 million, which is a $2.5 million increase
over the $711,000 surplus projected as of the first quarter of the fiscal year. It should be noted
that this analysis is a preliminary projection based on the experience of the first six months of
the fiscal year, and this will continue to be updated and further refined over the coming months.
Based on the projected deficit in the FY 2018/19 preliminary budget, the administration has
implemented a hiring freeze for the remainder of FY 2017/18, with a goal of realizing current
year savings that could be utilized during the budgeting process. In addition, the Fleet
Management, Medical and Dental Funds are projected to exceed their amended FY 2017/18
budgets based on year-to-date actuals. Should these internal service funds exceed their
amended budget at year-end, the overages may be charged back to applicable departments,
the majority of which would be in the General Fund.
FY 2017/18 Budget
General Fund
Adopted Budget
Amended Budget
Projected
Variance
Projected vs Amended
Budget
% Over / (Under)
Revenues
Expenditures
$ 330,850,000
$ 330,850,000
$ 334,869,000
$ 334,869,000
$ 336,806,000
$ 333,584,000
$ 1,937,000
$ (1,285,000)
0.6%
-0.4%
Excess of Revenues Over/(Under) Expenditures $ 3,222,000
General Fund Operating Revenues
For a detail of General Fund revenues by category, see attached Schedule A.
Based on current collections for FY 2017/18, property taxes are being projected at
approximately 95 percent of total property taxes assessed, which is consistent with the original
adopted budget. As of March 2018, approximately 88.2% of budgeted property tax revenues
have been collected. In the last few years property tax collections have been below prior year
levels due to higher levels of appeals and adjustments. The realized impact of appeals and
adjustments for the FY 2017/18 budget will be provided by the Miami -Dade County Property
Appraiser in July when the certified property values are received.
Overall, revenues through fiscal year-end September 30, 2018 are projected to be $336.8
million, which is 0.6%, or $1.9 million, above the current amended budget. As in prior years,
significant variances in year-end projections compared to budget by revenue category in excess
of 10%, or $300,000, are explained below:
LTC — FY 2017/18 Second Quarter Analysis
Page 4 of 12
Other Taxes — This category includes franchise tax revenues such as electricity, gas,
waste contractors, and cable TV, as well as utility tax revenues, and is projected to be
6.9%, or $1.6 million, above the current amended budget due to projected increases in
franchise and utility collections for electricity and telephone, based on current year usage
rates trending higher than budget.
Licenses and Permits — This category includes business tax receipts, licenses/
building/special use permits, as well as sidewalk cafe fee revenues and is projected to be
below the amended budget by 2.3%, or $733,000, due primarily to a slowdown in the
number of building permits being applied for and issued, combined with recently
implemented private provider discounts and diminishing job size valuations that directly
impact permit revenues.
Fines and Forfeits — This category includes County traffic and parking fines, building code
violations, and code enforcement violations among other items and is projected to be
39.8%, or $538,000, above the current amended budget due to code enforcement and
elevator violations trending higher than budget.
Miscellaneous — This category includes revenues from various categories such as
concessions, reimbursements, and miscellaneous revenue categories, including beach
access fees and sale of city property, and is projected to be 3.6%, or $514,000, above the
amended budget mainly due to the City vacating a 20 -foot -wide public right-of-way that
runs parallel to Alton Road between Alton Road and West Avenue from Lincoln Road to
17th Street pursuant to a development agreement that was executed between the City,
1698 Alton Road Ventures, LLC, and 1681 West Ventures, LLC, as adopted by Resolution
No. 2016-29639. For vacating this parcel, the City received a voluntary contribution of
$665,000 from the developer. Of this amount, $532,000 went to the General Fund and the
remaining balance of $133,000 went to the Transportation Trust Fund pursuant to
Resolution No. 2016-29500, adopted by Commission July 13, 2016, which outlines that
20% of all one-time unrestricted capital payments to the City of $500,000 or more be
deposited in a trust fund for capital or acquisition costs associated with mass transit.
General Fund Operating Expenditures
As of March 31, 2018, actual expenses were approximately 44.1% of budget, or $147.5 million.
Expenditures through fiscal year-end September 30, 2018 are projected to be $333.6 million,
which is approximately 0.4%, or $1.3 million, below the current FY 2017/18 amended budget.
These projections are based on an analysis of the first six months of the fiscal year, as well as
any additional information available. As previously mentioned, the following projections, as of
March 31, 2018, include the projected impact of the tentative agreement reached by the City
and CWA based on the Impasse hearing held by the City Commission on April 13, 2018, which
predominately impacted the budgets of the Fire Department, including the Public Safety
Communications Unit (PSCU), the Police Department, and the Code Compliance Department,
and the Building Department.
A comparison of actual expenses and projected expenditures to budget by department, as of
March 31, 2018, is provided in the attached Schedule A. It is important to note that these
projections include un -budgeted expenses related to Hurricane Irma, which some departments
are projected to absorb within their current amended budgets. Final hurricane -related expenses
will be quantified at year-end. As in prior years, departments projected to exceed budget, or with
significant variances to budget in excess of 10%, or $300,000, are explained below.
LTC — FY 2017/18 Second Quarter Analysis
Page 5 of 12
Emergency Management — The department is projected to be above the amended budget
by $855,000 resulting from emergency expenses related to Hurricane Irma incurred early in
the fiscal year, which included additional consulting services for financial recovery efforts,
temporary office personnel to prepare and compile required documentation, additional
security guard services, and rental of machinery and equipment.
Emergency Management
Amended Budget
Projected
Variance
Projected vs Amended
Budget
% Over / (Under)
Expenditures
$ 3,181,000
$ 4,036,000
$ 855,000
26.9%
Public Works — The department is projected to be below the amended budget by 3.1%, or
$496,000, resulting from realized savings in personnel services expenditures due to
numerous vacancies within the department, combined with savings from citywide grounds
maintenance, which include the City's right-of-way and facilities.
Public Works
Amended Budget
Projected
Variance
Projected vs Amended
Budget
% Over / (Under)
Expenditures
$ 15, 773, 000
$ 15, 277, 000
$ (496,000)
-3.1 %
Citywide Accounts — The Citywide Accounts are projected to be above the amended
budget by 2.2%, or $339,000, largely due to a $313,000 increase in the City's 415 Excess
Benefit Pension Plan contributions for retirees based on the new IRS tax limits that were
set after adoption of the FY 2017/18 budget.
Citywide Accounts
Amended Budget
Projected
Variance
Projected vs Amended
Budget
% Over / (Under)
Expenditures
$ 15,132,000
$ 15,471,000
$ 339,000
2.2%
ENTERPRISE FUNDS
The City accounts for proprietary operations in its Enterprise Funds. The Convention Center,
Parking, Sanitation, Sewer, Storm Water, and Water Funds are included within this category.
Expenditures in these funds are budgeted to be fully offset by charges for services provided.
An analysis of actual six-month operating expenses for the period of October 1, 2017 through
March 31, 2018, reveals that all Enterprise Funds — Sanitation, Storm Water, Parking, and
Convention Center — have expenses less than one-half of their amended budget as of March
31, 2018. As previously mentioned, this is not representative of trends for an entire fiscal year,
as there is often a lag in expenditures, particularly related to those billed by outside entities.
LTC — FY 2017/18 Second Quarter Analysis
Page 6 of 12
ENTERPRISE FUNDS
Sanitation
Sewer
Storm Water
Water
Parking
Convention
Center
FY 2017/18 Adopted Budget
21,221 000
49,666,000
28,327.000
38,321,000
58,734,000
12,688,000
FY 2017/18 Amended Budget
22,724,000
50,105,000
28,785,000
39,198,000
59,285,000
13,846,000
FY 2017/18 Revenue Pro - tions
23 223,000
51,191,000
29.098,000
38,502,000
55,315,000
16.193,000
1/2 Adopted Budget
1/2 Amended Budget
10,610,500
11,362,000
24,833,000
25,052,500
14,163,500
14,392,500
19,160,500
19,599,000
29,367,000
29,642,500
6,344,000
6,923,000
Revenues as of 03/31/18
8,439,056
24 244,247
13,973 105
16 206,393
23,598,755
3,746,919
Expenditures as of 03/31/18
10,443,735
20,949,850
11,429,096
18,863,080
22,775,202
2,924,191
Expenditures Above/(Below) 1/2 Amended Budget
% Variance
(918,265)
-4.0%
(4,102,650)
-8.2%
(2,963,404)
-10.3%
(735,920)
-1.9%
(6,867,298)
-11.6%
(3,998,809)
-28.9%
Year-end revenue and expenditure projections through September 30, 2018 provide a more
realistic indication of any anticipated year-end surpluses or shortfalls as of this point in time. In
addition, while the actual revenues and expenses presented above are as of March 31, 2018,
the year-end projections have incorporated any more recent information that may be available.
The following projections include the projected impact of the tentative agreement reached by the
City and CWA based on the Impasse hearing that was held by the City Commission on April 13,
2018. The Enterprise Fund primarily impacted by the tentative agreement reached was the
Parking Enterprise Fund.
As represented below, Sewer, Storm Water, Water, Parking, and Convention Center Fund
revenues are projected to be equivalent to or in excess of expenditures as of year-end. The
Sanitation Fund, however, is projected to have expenditures in excess of revenues due to
additional expenses that were incurred for debris removal and disposal from Hurricane Irma.
ENTERPRISE FUNDS
FY 2017/18 ' • • • ed Bud. -t
21 221 000
49 666 000
28,327,000
38,321,000
58 734,000
12,688,000
FY 2017/18 Amended Bud• -t
22,724,000
50,105,000
28,785,000
39,198,000
59,285,000
13,846,000
FY 2017/18 PROJECTIONS
Charges for Services
Other
23,223,000
47,919,000
3,272,000
29,244,000
146,000
34,788,000
3,714,000
46,420,000
8,895,000
2,484,000
13,709,000
FY 2017/18 Revenue Pro - tions
23 223,000
51,191,000
29.098,000
38,502,000
55,315,000
16.193,000
$ Over/(Under) Amended Budget
% Over/(Under) Amended Budget
499,000
2.2%
1,086,000
2.2%
313,000
1.1%
(696,000)
-1.8%
(3,970,000)
-6.7%
2,347,000
17.0%
FY 2017/18 E • -nditure Pro'ections
23 223,000
49,839,000
28,785,000
38,502,000
55,315,000
13 846.000
$Over/(Under) Amended Budget
% Over/(Under) Amended Budget
499,000.
2.2%
(266,000)
-0.5%
(0)
0.0%
(696,000)
-1.8%
(3,970,000)
-6.7°A
-
0.0%
Excess of Revenues Over/ Under Ex.. nditures
0
1,352,000
313,000
0
0
2,347,000
As in prior years, departments projected to exceed budget, or with significant variances to
budget in excess of 10%, or $300,000, are explained below:
Sanitation — This fund is projected to be 2.2%, or $499,000, above the amended budget
due to additional expenses incurred for debris removal and disposal from Hurricane Irma,
as previously mentioned. Since the overage in projected expenditures to budget is due to
the impact of Hurricane Irma, if realized at year-end, Sanitation's emergency reserves will
be utilized to fund these expenditures with the approximation that sixty percent of these
costs will be reimbursed by the Federal Emergency Management Administration (FEMA) in
the near future, resulting in approximately $200,000 of potential unreimbursed expenditures
in FY 2017/18 in the Sanitation Fund. Once received, reimbursements would be utilized to
replenish emergency reserves.
Water — This fund is projected to be 1.8%, or $696,000, below the amended budget due to
realized savings in salaries, overtime, allowances, and health insurance costs from
previously vacant positions that have been recently filled totaling approximately $432,000,
LTC — FY 2017/18 Second Quarter Analysis
Page 7 of 12
as well as $264,000 in projected savings for water sampling and testing services, which are
necessary when a water main break has occurred. Since the number of water main breaks
that have occurred in the current fiscal year has decreased, compared to the same period
of the prior fiscal year, savings in water sampling and testing services are projected as of
year-end. We will continue to monitor the trend of occurrences and make any necessary
revisions for future months.
Parking — This fund is projected to be 6.7%, or $4.0 million, below the amended budget,
largely due to a decrease in the amount available to be set-aside for renewal and
replacement of the Parking Department's existing capital assets in the amount of
approximately $2.2 million. This reduction is directly related to diminished demand and
usage of on -street and off-street parking, which has been impacted by private on -demand
ride booking and sharing services. In addition, savings totaling $991,000 are also projected
from a reduction in the department's transfer to the Transportation Fund resulting from a
projected increase in contributions from the 1% Quality of Life Resort Tax Fund to the
Transportation Fund, which also funds transportation operations. Lastly, approximately
$504,000 are projected in savings from meter collection equipment maintenance, garage
cleaning, and wash -down services, which are budgeted based on a combination of
recurring services, plus additional unforeseen needs that may occur throughout the fiscal
year.
INTERNAL SERVICE FUNDS
The City accounts for goods and services provided by one department to other departments
citywide on a cost reimbursement basis as Internal Service Funds. Central Services, Fleet
Management, Information Technology, Property Management, Medical and Dental, and Risk
Management (Self Insurance) comprise this category of Proprietary Funds.
An analysis of actual six-month operating revenues and expenses for the period of October 1,
2017 through March 31, 2018, reveals that Central Services, Fleet Management, Information
Technology, Property Management, and Risk Management all have expenses less than one-
half of their amended budget as of March 30, 2018, which are due to expenditures that are
typically incurred later in the fiscal year. In contrast, Medical and Dental have expenses that are
more than one-half of the current amended budget, which is due to large medical claims that
have been incurred during the first six months of the current fiscal year.
INTERNAL SERVICE FUNDS
Central Services
Fleet
Management
Information
Technology
Property
Management
Risk
Management
Medical8
Dental
Insurance
FY 2017/18 Adopted Budget
1,074,000
8,803,000
16,250.000
8,664,000
19,270,000
31,962,000
FY 2017/18 Amended Budget
1,074,000
8,817,000
16,772,000
9,050,000
19,270,000
31,962,000
1/2 Adopted Budget
1/2 Amended Budget
537,000
537,000
4,401,500
4,408,500
8,125,000
8,386,000
4,332,000
4,525,000
9,635,000
9,635,000
15,981,000
15,981,000
Revenues asof03/31/18
543,066
4,601,041
7,843,850
4,378,627
9,394,885
17,197,341
Expenditures as of 03/31/18
446,934
4,194,152
6,715,703
3,748,938
6,016,102
17,356,697
Expenditures Above/(Below) 1/2 Amended Budget
% Variance
(90,066)
-8.4%
(214,348)
-2.4%
(1,670,297)
-10.0%
(776,062)
-8.6%
(3,618,898)
-18.8%
1,375,697
4.3%
Operating revenue and expenditure projections through September 30, 2018 provide a more
realistic indication of any anticipated year-end surpluses or shortfalls. While the actual revenues
and expenses presented above are as of March 31, 2018, the year-end projections have
incorporated more recent information, if available.
LTC — FY 2017/18 Second Quarter Analysis
Page 8 of 12
As represented below, Central Services, Information Technology, Property Management, Risk
Management, and Medical and Dental revenues are projected to be equivalent to or in excess
of expenditures as of fiscal year-end. Since Internal Service Fund departments function on a
cost reimbursement basis, should any Internal Service Fund department exceed its amended
budget at year-end, the overage will be charged back to the applicable departments as such.
INTERNAL SERVICE FUNDS
Central Services
Fleet
Management
Information
Technology
Property
Management
Risk
Management
Medical &
Dental
Insurance
FY 2017/18 Adopted Budget
1,074,000
8,803,000
16,250,000
8,664,000
19,270,000
31,962,000
FY 2017/18 Amended Budget
1,074,000
8,817,000
16,772,000
9,050,000
19,270,000
31,962,000
FY 2017/18 PROJECTIONS
Charges for Services
Other
1,056,000
18,000
8,490,000
553,000
15,534,000
1,070.000
8,718,000
67,000
18,848,000
206,000
33,128,000
1,865,000
FY 2017/18 Revenue Projections
1,074,000
9,043,000
16,604,000
8,785,000
19,054,000
34,993,000
$Over/(Under) Amended Budget
% Over/(Under) Amended Budget
(0)
0.0%
226,000
2.6%
(168,000)
-1.0%
(265,000)
-2.9%
(216,000)
-1.1%
3,031,000
9.5%
FY 2017/18 Expenditure Projections
1,074,000
9,043,000
16,604,000
8,785,000
19,054,000
34,993,000
$Over/(Under) Amended Budget
% Over/(Under) Amended Budget
(0)
0.0%
226,000
2.6%
(168,009)
-1.0%
(265,000)
-2.9%
(216,000)
-1.1%
3,031,000
9.5%
Excess of Revenues Over/(Under) Expenditures
0
0
0
0
0
0
Fleet Management — This fund is projected to be 2.6%, or $226,000, above the amended
budget largely due to increasing gasoline and diesel fuel prices. Since the department is
responsible for providing gasoline and diesel fuel to the City's fleet of vehicles, machinery,
and equipment, these price fluctuations are anticipated to result in the department
exceeding its amended budget as of year-end. In addition, the department is experiencing
increasing costs for repairs and maintenance of older vehicles that are due for replacement,
but still in use due to limited availability of funding. As previously mentioned, should Fleet
Management exceed its amended budget at year-end, the overage will be charged back to
applicable departments.
Medical and Dental — These funds are projected to be 9.5%, or $3,031,000, above the
amended budget due to medical claims continuing to trend higher than budget based on
current year-to-date claims experience, which includes several large claims, and adjusted
actuarial forecasts resulting from this claims experience. Since claims can fluctuate
significantly throughout the year, this is a conservative projection, and the trend will continue
to be monitored over the coming months. If claims experience continues to trend at current
levels for the remainder of the fiscal year, available fund balance may be realized to cover
the projected year-end deficit.
SPECIAL REVENUE FUNDS
Special Revenue Funds consist of revenues and expenditures which are legally restricted or
committed for specific purposes other than debt service and/or capital projects. These include
Resort Tax, as well as the following: 7th Street Garage Operations, 5th & Alton Garage
Operations, the Tourism and Hospitality Scholarship Program, Tree Preservation and
Commemorative Tree Trust Fund, Waste Hauler and Sustainability Contributions, Education
Compact Fund, Red Light Camera Program, Emergency 911 Fund, Information and
Communications Technology Fund, People's Transportation Plan (PTP) Fund, Miami Beach
Cultural Arts Council, Police Unclaimed Property and Crash Report Sales Funds, Police
Confiscation Trust Funds (Federal and State), Police Training and School Resources Fund, and
Adopt -a -Bench Program.
LTC — FY 2017/18 Second Quarter Analysis
Page 9 of 12
An analysis of the six-month operating revenues and expenses for the period of October 1,
2017 through March 31, 2018, reveals that all Special Revenue Funds, except the Police
Training and School Resources Fund, have expenses less than one-half of their current
amended budget, which are mostly due to expenditures that are typically incurred later in the
fiscal year. The Police Training and School Resources Fund has expenses that are more than
one-half of the current amended budget, as of March 31, 2018, due to one-time annual
expenses, such as equipment purchases, which were incurred in the first six months of the
fiscal year.
While all Special Revenue Funds are projected to be at or below their current amended budgets
as of year-end, departments with significant variances to budget in excess of 10%, or $300,000,
are further explained below:
Transportation — This fund is projected to be 3.5%, or $482,000, below the current
amended budget due to realized savings of approximately $226,000 from one-time
transportation feasibility studies that are not anticipated to be completed in the current fiscal
year, as well as other studies that are expected to be completed at a cost lower than
originally budgeted. Of the total savings projected as of March 31, 2018, $135,000 is also
due to middle beach trolley operations that were reimbursed by the Florida Department of
Transportation's (FDOT) Service Development Grant award.
Red Light Camera Program — This fund is projected to be 45.8%, or $610,000, below the
current amended budget primarily due to delays in the installation of five additional red-light
cameras that were originally expected to be installed and fully operational effective January
2018, combined with declining revenues generated from the existing red-light cameras that
are currently deployed and operational.
Tree Preservation — This fund is projected to be 21.2%, or $39,000, below the current
amended budget due to the after-effects of Hurricane Irma, since many of the City's canopy
trees were lost resulting in a drastic decrease in the requests for tree removal permits.
RESORT TAX FUND
The City's Resort Tax Fund is primarily supported by taxes collected pursuant to Chapter 67-
930 (Section 6) of the Laws of Florida, as amended, and Section 5.03 of the City of Miami
Beach Charter, as amended. This legislation authorizes the use of Resort Taxes for the
promotion of the tourist industry, which includes, but is not limited to the following: publicity,
advertising, news bureau, promotional events, convention bureau activities, capital
improvements and the maintenance of all physical assets in connection therewith; and for the
payment of the reasonable and necessary expenses of collecting, handling, and processing of
said tax.
The City has considered the following services as "Services Related to the Promotion of
Tourism":
• Police Officers serving entertainment areas
• A portion of Fire Rescue services from Fire Stations 1 & 2
• Ocean Rescue services
• Sidewalk pressure cleaning in South, Middle and North Beach visitor areas
• South Beach sanitation
• Enhanced Code Compliance/Enforcement provided to respond to evening entertainment
area violations and staffing of special events
LTC — FY 2017/18 Second Quarter Analysis
Page 10 of 12
• Other Code Compliance/Enforcement activities in tourism and visitor related
facilities/areas
• Tourism, Culture, and Economic Development Department and Cultural Arts Council
activities
• Museums and Theatres (Garden Center, Bass Museum, Colony and Byron Carlyle
Theatres)
• Golf courses (net of revenues)
• Memorial Day and other "High Impact Period" event costs
• Homeless services
• July 4t1, Visitor Center funding, Holiday Lighting, Festival of the Arts, Jewish Museum,
MDPL, Orange Bowl, Monuments, etc.
These allowable uses have led to increased tourism -related activities, such as special "High
Impact Period" events including Art Basel, the Air and Sea Show, and various concerts.
Two percent Resort Tax collections are projected to be 3.5%, or $2.0 million, above the current
amended budget, which was originally adopted assuming a conservative 1.0% increase over FY
2016/17 actuals due to economic stresses that had previously impacted tourism throughout the
City. Although October 2017 through December 2017 collections decreased approximately
4.9%, or $543,000, compared to the same period of the prior fiscal year, from January 2018
through May 2018, collections increased about 9.3%, or $2.6 million, compared to the same
period of the prior fiscal year. From October 2017 through May 2018, two percent collections
have increased nearly 5.3%, or $2.1 million, over prior year collections for the same eight
months.
Total two percent Resort Tax Fund operating revenues are projected at $59.6 million, which is
approximately 3.7%, or $2.1 million, over the current amended budget as of year-end. It is
important to note that this projection assumes a 4.0% increase over prior year collections for the
same period through the remainder of the current fiscal year. As additional information becomes
available, these projections will be further refined. Two percent Resort Tax expenditures are
projected to be above the amended budget by approximately 0.4%, or $220,000, resulting
mostly from an increase in projected contributions to the Miami Beach Visitor and Convention
Authority (VCA), which are based on a percentage of two percent Resort Tax collections.
The proceeds of the one percent bed tax are to be used as follows: 45% allocated for
Transportation initiatives in tourist -related areas; 15% allocated equally among North Beach,
Middle Beach and South Beach for capital projects that enhance Miami Beach's tourist related
areas; and 10% allocated to various arts and cultural programs.
One percent Resort Tax operating revenues are projected to be 7.5%, or $991,000, above the
current amended budget as of year-end. Like the two percent collections, although one percent
October 2017 through December 2017 collections decreased approximately 8.6%, or $219,000,
compared to the same three months of the prior fiscal year, January 2018 through May 2018
collections increased approximately 13.0%, or $900,000, compared to the same period of the
prior fiscal year. From October 2017 through May 2018, one percent collections have increased
7.2%, or $681,000, compared to the same eight months of the prior fiscal year.
For this reason, total one percent Resort Tax operating revenues are projected at $14.3 million,
which is approximately 7.5%, or $991,000, above the current amended budget as of year-end.
Like the two percent projections, this assumes a 4.0% increase over prior year collections for
the same period through the remainder of the current fiscal year. Since transfers for
transportation initiatives, quality of life projects, and arts and cultural programs are directly
based on the proceeds of the one percent tax, one percent expenditures are equally projected
LTC — FY 2017/18 Second Quarter Analysis
Page 11 of 12
to be 7.5%, or $991,000, above the current amended budget as of year-end.
The proceeds of the additional one percent bed tax levied solely for the purposes of expanding,
enlarging, renovating, and/or improving the Miami Beach Convention Center, including debt
service related thereto, as well as providing for Capital Renewal and Replacement funding for
the convention center, is projected to be 7.5%, or $991,000, above the current amended budget
as of year-end utilizing the same assumptions as the one percent bed tax. Since the proceeds
of the additional 1% bed tax must first provide for the payment of debt service and any excess,
based on proceeds, be set-aside for future Capital Renewal and Replacement funding for the
Miami Beach Convention Center, the additional one percent bed tax is also projected to be
7.5%, or $991,000, above the current amended budget as of year-end.
Overall, projected Resort Tax revenues are projected to be 4.9%, or $4.1 million, above the
current amended budget as of year-end while expenditures are projected to be 2.6%, or $2.2
million, above the current amended budget as of year-end resulting in a projected surplus of
approximately $1.9 million as of year-end.
RESORT TAX FUND
FY 2017/18
Adopted
Budget
Amended
FY 2017/18
Budget
Actuals as of
March 31, 2018
FY 2017/18
Year -End
projection
Over/(Under)
Amended
Budget
Over/(Under)
Amended
Budget
Revenues
2% Resort Tax
56,485,000
57,085,000
25,974,971
59,059,000
1,974,000
3.5%
Miscellaneous Revenues
206,000
206,000
273,836
338,000
132,000
64.1%
Transfer In from Fund Balance
0
173,000
0
173,000
0
0.0%
1% Resort Tax
13,271,000
13,271,000
6,307,434
14,262,000
991,000
7.5%
Additional 1% for Convention Center
13,271,000
13,271,000
6,307,434
14,262,000
991,000
7.5%
Total Revenues
83,233,000
84,006,000
38,863,675
88,094,000
4,088,000
4.9%
Expenditures
General Fund Contribution
34,950,000
34,950,000
17,475,000
34,950,000
-
0.0%
Contributions to VCA and GMCVB
9,254,000
9,254,000
5,771,103
9,485,000
231,000
2.5%
Contribution to Mt. Sinai
1,000,000
1,000,000
-
1,000,000
-
0.0%
Other Operating/Other Uses
11,037,000
11,210,000
10,806,287
11,199,000
(11,000)
-0.1%
Marketing
200,000
200,000
6,143
200,000
-
0.0%
Contingency
250,000
850,000
-
850,000
-
0.0%
Addt'I 1% Conv. Center Debt Service & Cap. Ren & Repl.
13,271,000
13,271,000
6,307,434
14,262,000
991,000
7.5%
Transfer to NB, MB, SB Capital, Transp, and Arts
13,271,000
13,271,000
4,577,627
14,262,000
991,000
7.5%
Total Expenditures
83,233,000
84 006 000
44,943 594
86,208,000
2,202,000
2.6%
Excess of Revenues Over/(Under) Expenditures
0
0
(6,079,919)
1,886,000
CONCLUSION
This analysis of budget to actual operating revenues and expenses as of March 31, 2018, with
projections through September 30, 2018, provides the status of the amended budget for the first
six months of the current fiscal year. While the first six months of the fiscal year does not
provide a definitive indication of experience for the remainder of the fiscal year, it does provide
further clarity in proactively identifying any potential issues.
Based on preliminary projections as of March 31, 2018, the General Fund is anticipated to have
a surplus totaling approximately $3.2 million as of year-end, which is a $2.5 million increase
over the $711,000 surplus projected as of first quarter of the fiscal year. We will continue to
monitor all funds throughout the future months.
JLM/JWiTOS
LTC - FY 2017/18 Second Quarter Analysis
Page 12 of 12
SCHEDULE A
CITY OF MIAMI BEACH
FY 2017/18 GENERAL FUND
2nd QUARTER
REVENUES
FY 2017/18
Adopted
Budget
FY 2017/18
Amended
Budget
FY 2017/18 Over/(Under)
Actuals as of Year End Amended
March 31, 2018
Projections Budget
Over/(Under)
A
Ad Valorem Taxes
174,642,000
174,642,000
153,842,950
174,642,000-
0.0%
Ad Valorem Taxes - Capital Renewal & Replacement
721,000
721,000
721,000
721,000-
0.0%
Ad Valorem Taxes - Normandy Shores
181,000
181,000
181,000
181,000-
0.0%
Other Taxes
22,856,000
22,856,000
10,154,416
24,437,000
1,581,000
6.9%
Licenses and Permits
30,940,000
31,417,000
16,715,374
30,684,000
(733,000)
-2.3%
Intergovernmental
11,255,000
11,255,000
4,992,428
11542,000
287,000
2.5%
Charges for Services
12,246,000
12,246,000
5,933,504
12,034,000
(212,000)
-1.7%
Fines and Forfeitures
1,351,000
1,351,000
954,785
1,889,000
538,000
39.8%
Interest
692,000
692,000
2,010,588
692,000-
0.0%
Rents and Leases
5,947,000
5,947,000
3,441,939
5,909,000
(38,000)
-0.6%
Miscellaneous
14,245,000
14,245,000
5,438,488
14,759,000
514,000
3.6%
Other -Resort Tax Contribution
34,950,000
34,950,000
17,475,000
34,950,000
-
0.0%
Other -Non -Operating Revenues
20,824,000
20,824,000
8,912,000
20,824,000
-
0.0%
Prior Year -End Surplus Carryover-
3,542,000
-
3,542,000
0.0%
TOTAL REVENUES
330,850,000
334,869,000
230,773,473
336,806,000
1,937,000
' 0.6%
EXPENDITURES
Building
15,369,000
15,761,000
6,464,034
15,601,000
(160,000)
-1.0%
Capital Improvement Projects
5,090,000
5,090,000
2,147,888
4,823,000
(267,000)
-5.2%
City Attorney
5,815,000
5,859,000
2,329,351
5,668,000
(191,000)
-3:3%
City Clerk
1,730,000
1,760,000
754,884
1,725,000
(35,000)
-2.0%
City Manager
3,969,000
3,969,000
1,823,462
3,906,000
(63,000)
-1.6%
Code Compliance
5,990,000
6,015,000
2,690,661
5,841,000
(174,000)
-2.9%
Communications
2,136,000
2,136,000
876,729
2,076,000
(60,000)
-2.8%
Emergency Management
3,270,000
3,181,000
1,481,455
4,036,000
855,000
26.9%
Environment & Sustainability
1,265,000
1,265,000
488,452
1,264,000
(1,000)
-0.1%
Finance
6,059,000
6,073,000
2,872,138
6,023,000
(50,000)
-0.8%
Fire
82,468,000
83,414,000
39,312,945
83,245,000
(169,000)
-0.2%
Housing & Comm Services
3,237,000
3,345,000
1,380,588
3,331,000
(14,000)
-0.4%
Human Resources/Labor Relations
2,807,000
2,807,000
1,236,773
2,803,000
(4,000)
-0.1%
Mayor and Commission
2,310,000
2,310,000
1,060,302
2,304,000
(6,000)
-0.3%
Internal Audit
848,000
1,037,000
305,793
970,000
(67,000)
-6.5%
Office of Budget & Performance Improv
1,708,000
1,765,000
813,452
1,740,000
(25,000)
-1.4%
Organizational Development & Perf Initiatives
887,000
888,000
318,849
860,000
(28,000)
-3.2%
Parks and Recreation
35,735,000
36,496,000
16,266,485
36,225,000
(271,000)
-0.7%
Planning
4,518,000
4,693,000
2,038,039
4,689,000
(4,000)
-0.1%
Police
108,654,000
109,082,000
50,827,742
108,945,000
(137,000)
-0.1%
Procurement
2,433,000
2,486,000
1,060,426
2,427,000
(59,000)
-2.4%
Public Works
15,268,000
15,773,000
5,959,799
15,277,000
(496,000)
-3.1%
Tourism, Culture, & Economic Development
4,519,000
4,532,000
1,491,634
4,334,000
(198,000)
-4.4%
Citywide Accounts & Operating Contingency
11,367,000
11,734,000
3,512,455
12,073,000
339,000
2.9%
Citywide -Normandy Shores
277,000
277,000-
277,000
-
0.0%
Citywide -Transfers -Pay -As -You Go Capital Fund
2,400,000
2,400,000-
2,400,000
-
0.0%
Citywide -Transfers -Capital Renewal & Replacement
721,000
721,000
-
721,000
0.0%
TOTAL EXPENDITURES
330 850 000
334,869,000
147 514,334
333 584 000
(1,285,000)
-0.4%
EXCESS OF REVENUES OVERI(UNDER) EXPENDITURES
0
0
83,259,139
3,222,000