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RESOLUTION 92-20555 RESOLUTION NO. 92-20555 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, SETTING THE PROPOSED MILLAGE RATES FOR FY 1992-93; 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 DADE COUNTY PROPERTY APPRAISER AS REQUIRED BY FS 200.065 WHEREAS, Florida Statues, Chapter 200. 065 has specified the method by which municipalities may fix the millage rate and adopt an annual budget; and WHEREAS, The City of Miami Beach is required to advise the Dade County Property Appraiser of the Proposed Millage Rate, the Rolled-Back Rate, and the date, time, and place of the first public hearing; NOW, THEREFORE BE IT DULY RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the following recommend- ations of the Administration be and are hereby ratified for trans- mission to the Dade County Property Appraiser, as specified in Florida Statutes, Chapter 200. 065: 1) Proposed Millage Rates for FY 1992/93 General Operating 9 . 302 mills Debt Service 2 . 545 mills 2) Rolled-Back Rate 9 . 642 mills 3) The first public hearing of the proposed millage rate and the proposed budget for FY 1992/93 shall be held on Thursday, September 10, 1992 at 5: 01 p.m. , City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida. ; PASSED and ADOPTED, this 22th d. , * , U1 , 1992 . 6 . ATTEST: A 1 , _ CITY CLERK / 2-pith/ i FORM APPROVED: LEGAL DEPARTMENT V/a/,1Z PFL:me CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139 OFFICE OF THE CITY MANAGER TELEPHONE: (305) 673-7010 FAX: (305) 673-7782 COMMISSION MEMORANDUM NO. DATE: July 22 , 1991 TO: Mayor Seymour Gelber and Members of the City Commission FROM: Roger M. Ca Cit Mana er ; Y 9 ( SUBJECT: A RESOLUTION SETTING 1) THE PROPOSED OPERATING MILLAGE RATE; 2) THE REQUIRED DEBT SERVICE MILLAGE RATE; 3) THE CALCULATED ROLLED BACK RATE; AND, 4) SETTING THE DATE, TIME, AND PLACE OF THE FIRST PUBLIC HEARING TO CONSIDER THE MILLAGE RATES AND BUDGETS FOR FISCAL YEAR 1992/93. RECOMMENDATION The Administration recommends that the City Commission adopt the attached resolution which sets the following: 1) Proposed Millage Rates for FY 1992/93 General Operating 9 . 302 mills ( 9. 743 last year) Debt Service 2 . 545 mills ( 2 . 200 last year) Total 11. 847 mills (11. 943 last year) 2) Rolled Back Rate (Truth in Millage) 9 . 642 mills 3) That the first public hearing to consider the proposed millage rates and budgets for FY 1992/93 shall be at 5: 01 p.m. , Thursday, September 10, 1992 . Further, that the City Commission authorize the City Manager to transmit the above information to the Dade County Property Appraiser, pursuant to FS200. 065. It should be noted that the proposed combined millage rate of 11.847 mills represents the fourth year in a row that the combined millage rate has decreased for the taxpayers of Miami Beach. Further, this is the first year that the proposed operating millage rate (9.302) is below the "Rolled Back" rate (9. 642) since the TRIM bill was enacted approximately fifteen years ago. BACKGROUND FS200. 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, 1992) , to advise the Dade County Property Appraiser of the proposed millage rate, the calculated rolled back rate (which is the rate that removes all inflation in existing property values) , and of the date, time, and place of the first public hearing to consider the proposed millage rates and budgets for fiscal year 1992/93 . The proposed Debt Service millage rate must also be set at the same time. 19 AGENDA ITEM DATE 722 - 1 Proposed Operating and Debt Service Millage July 22 , 1992 Page - 2 - After setting the proposed operating millage rate, the City Commission may, at any time prior to the final adoption, lower its value. Increasing the millage rate may only be accomplished by an expensive mailing to all property owners and advertising process. A second public hearing on the millage rates and proposed budgets will be scheduled following the end of the first public hearing. ANALYSIS On July 1, 1992 , the City received the "1992 Certification of Taxable Value" from the Dade County Property Appraiser's Office stating that the taxable value for the City of Miami Beach is $3 , 969, 036, 299 . This amount includes new construction of $65, 024 , 290 and an increase in the value of existing properties of $40, 414, 404 or 1. 05%. The final value for 1991 is $3 , 863 , 597 , 605 and represents an equalization (appeal) loss of $73 , 835, 499 from last year's certified value of $3 , 937,433 , 104 . The value of the mill has gone from $3 , 863 , 598 (after appeals) in FY 1991/92 to $3 , 969 , 036 or a 2 . 7% increase of $105, 438 per mill . The increase of $105, 438 consists of $65, 024 (1. 7%) for new construction and $40, 414 (1%) for existing values. For budgetary purposes, this represents an eight-tenths of one percent (0. 8%) growth over the certified value of $3 , 937 , 433 , 104 from the same time last year. The actual growth for the entire City from the 1991 final value to the 1992 certified value is 2 . 7%. During this same period, the comparative assessed value of the Miami Beach Redevelopment Area (south of 6th Street) decreased by $3 , 825, 900 or 2 . 2% from $175, 223 , 618 to $171, 397 ,718 . DEBT SERVICE MILLAGE To return the City to fiscal health, it is necessary to make the Debt Service Fund fully self-supporting by millage levies. This transition should occur within two years to maintain our bond rating of "A" with Moody's and "A" with Standard and Poors. The debt service payments for FY 1992/93 are $11, 797 , 040 and would require a tax rate of 3 . 064 mills or a significant increase of 0. 864 mills from the current year's value of 2 . 200 mills if the return to good financial management occurred in a single year. Further, assuming a small increase in the mill value for FY 1993/94 , the subsequent requirement would then be 2 . 972 mills or an increase of 0. 427 mills from next year's value. Achieving the return to fiscal health for the Debt Service Fund in one year could prove burdensome to our taxpayers. For next year, FY 92/93 , the two-year approach still requires a contribution from Debt Service Fund retained earnings. At this time it is projected that approximately $2 , 000, 000 will be available in debt service retained earnings next fiscal year. This amount makes it possible to limit the increase in the tax rate to 0. 345 mills (from 2 . 200 to 2 . 545 mills) and would provide $9, 978 , 161 in tax proceeds that would be supplemented with $1, 998 , 879 from retained earnings for the total requirement of $11, 797 , 040. Under the stated assumptions, the debt service millage for FY 93/94 would require another planned increase of 0 . 427 mills to 2 . 907 mills to make the Debt Service Fund fully self-supporting at the end of two years. The budgetary goal this year and next is to reduce general operating millage in like amounts so that our taxpayers will experience no millage increase for two years. This has been achieved by substantial expenditure reductions and reasonable non- property tax revenue adjustments. e'0 ti Proposed Operating and Debt Service Millage July 22 , 1992 Page - 3 - OPERATING MILLAGE During the past five years, Miami Beach has been experiencing an average annual growth of 6% in property values with a relatively constant tax rate. This means that our taxpayers have experienced substantially larger tax bills from Miami Beach (38 . 3% percent of the total tax bill last year) as well as increases from other units of government which have increased millage rates as well . Consistent with the directive from the City Commission to downsize and reduce the cost of doing business, the administration is recommending an operating millage rate of 9 . 302 mills. The proposed rate of 9. 302 mills represents a decrease of 0.441 mills or 4.5% from the prior year's value of 9.743. Alternately, the decrease is 3.52% from the rolled back rate of 9. 642 mill. This decrease is the largest decrease since the enactment of the Truth In Millage (TRIM) legislation; last year the millage rate decreased by 0. 223 mills. It should be understood that the millage rate could be established at the rolled back rate without advertising a tax increase. This budget recommends a millage rate well below the rolled back rate. The proposed rate of 9 . 302 mills will generate tax proceeds of $35, 812 , 374 to the operating fund. This amount is $1, 399 , 163 less than the prior year's levy of $37 , 211, 537 and is a 3 . 7% decrease in property tax income over the previous year. This will be the largest operating tax levy decrease in the history of Miami Beach; also, it is the second time that the operating tax levy has decreased in recent times. The first was in FY 1985/86, when the millage rate remained the same, 8 . 554 mills, and the levy decreased by $477 , 553 or 1. 8% over the prior year's levy of $26, 903 , 073 . The FY 92/93 Budget Message will focus on how we have achieved this reduction in property tax supported cost of operating our city. Tax increment proceeds to the Miami Beach Redevelopment Agency will be similarly affected by the reduced millage rate and the decline in assessed property value. Tax proceeds to the Agency will decline by $82 , 234 or 7 . 7% from $1, 069, 851 to $987 , 617 . MILLAGE SUMMARY Illustrated below, is a comparison of the millage rates and tax levies for FY 1991/92 and FY 1992/93 . FY 1991/92 FY 1992/93 Increase/(Decrease) Tax Rate Tax Levy Tax Rate Tax Levy Tax Rate Tax Levy Operating 9.743 $37,211,537 9.302 $35,812,374 (0.441) $(1,399,163) Debt Service 2.200 8,402,482 2.545 9,798,161 0.345 1,395,679 TOTAL 11.943 $45,614,019 11.847 $45,610,535 (0.096) $ (3,484) You will note that the total tax rate has decreased by 0 . 096 mills from the prior year and that there is a significant difference in the composition of the total tax rate. The discretionary operating millage will decrease by 0. 441 mills. If the City of Miami Beach is to return to fiscal health there is no discretion in the voted millage for debt service. By previous voter referenda and bond covenants, we are required to levy the amount of taxes necessary to cover the bond payments. Total tax levy (amount collected in dollars for both operating and debt services) to the City will decrease by $3 , 484 . • 21 • Proposed Operating and Debt Service Millage July 22 , 1992 Page - 4 - FIRST PUBLIC HEARING The first public hearing on the proposed millage rates and budgets for fiscal year 1992/93 must be held no later than 80 days or earlier than 65 days from the start of the TRIM calendar (July 1, 1992) . Other guideline are: 1) The public hearing cannot be scheduled on a Sunday or on the days utilized by Dade County or the School Board for their public hearing; 2) If on a day other than Saturday, it must be held after 5: 00 p.m. Based on these guidelines, the first hearing must be held between September 5 - 19 , 1992 and cannot be held on the following dates: September 8 & 17 Dade County Public Hearings September 9 School Board Public Hearing September 7 Labor Day Holiday September 6 & 13 Sundays Of the remaining days, it is recommended that the first public hearing be set for 5: 01 p.m. , Thursday, September 10, 1992 in the City Commission Chambers, City Hall, 1700 Convention Center Drive. I wish to take this opportunity to thank Office of Management and Budget Director Peter Liu, his staff members and the many Department Directors, Assistant City Managers and support staff that worked so diligently on this budget. To achieve the reduction in tax revenues in the operating fund and to maintain the overall millage rate at the last year level will require substantial sacrifice from our employees. Many of our colleagues and friends will no longer be employed by the City and services will be reduced in many cases as well as expanded in high priority areas. However, this difficult process will begin the unavoidable and long path to return the City of Miami Beach to fiscal health. RMC:PFL:me 22 RESOLUTION NO. 92-20555 Setting the proposed millage rates for FY 1992-93; the calculated rolled-back rate; and the date, time, and place of the first public hearing; further auhtoirizing the City Manager to transmit - . this information to the Dade County . property appraiser as required by FS 200.065.