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96-22119 RESO RESOLUTION NO. 96-22119 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING A TENTATIVE AD VALOREM MILLAGE OF 7.499 MILLS FOR GENERAL OPERATING PURPOSES, WHICH IS FIVE AND EIGHT TENTHS PERCENT (5.8%) GREATER THAN THE "ROLLED-BACK" RATE OF 7.090 MILLS, AND 1.879 MILLS FOR DEBT SERVICE FOR THE CITY, FOR FISCAL YEAR 1996/97, SUBJECT TO A SECOND PUBLIC HEARING AT 5:0l P.M., WEDNESDAY, SEPTEMBER 25, 1996. BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that, pursuant to Section 200.065, Florida Statutes, there is hereby levied a tax for the Fiscal Year 1996/97, on all taxable and non-exempt real and personal property located within the corporate limits of the City of Miami Beach, Florida, as follows: (a) For the purpose of operating the government of the City, the rate assigned amounts to ~ mills. Also included are appropriate reserves and contingencies, which are not limited to reserves for tax discounts and abatements of uncollected taxes. The millage rate reflected is five and eight tenths percent (5.8%) greater than the "rolled-back" rate of 7.090 mills. (b) For the purpose of providing payment on the principal and interest portions of the General Obligation Bond Debt outstanding, the rate assigned amounts to ~ mills. (c) The tentative adopted millage rates for the City of Miami Beach, Florida for FY 1996/97 is subject to a second and final public hearing at 5:02 P. M., Wednesday, September 25, 1996, in the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida. PASSED and ADOPTED this 12th day of ATTEST: ~oW p~ CITY CLERK IU , \ [',; r~; rn\.1. .P,j /djj LEGf\L DEPT. BY~~ '--\; ~11t__,..~ jUND~NG I&~-df Managem CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139 CITY OF MIAMI BEACH COMMISSION MEMORANDUM NO. 638..ql, TO: Mayor Seymour Gelber and Memben or the City Commusion DATE: Sept 12, 1996 FROM: Jose Gan:ia.Pedrosa City Manager SUBJECT: A RESOLUTION OPTING: 1) THE TENTATIVE AD VALOREM MILLAGE OF 7.499 MILLS FOR GENERAL OPERATING PURPOSES WHICH IS FIVE AND EIGHT TENTHS PERCENT (5.8%) GREATER THAN THE nROLLED BACKn RATE OF 7.090 MILLS; 2) THE DEBT SERVICE MILLAGE RATE OF 1.879 MILLS; AND, 3) SETTING 5:01 P. M., WEDNESDAY, SEPTEMBER 25, 1996, FOR THE SECOND PUBLIC HEARING TO CONSIDER THE MILLAGE RATE AND BUDGET FOR FISCAL YEAR 1996/97. RECOMMENDATION: The Administration recommends that the City Commission adopt the attached Resolution which sets the following: 1) Tentatively adopted millage rates for General Operating 7.499 mills Debt Service 1.879 mills Total 9.378 mills FY 1996/97 ( 7.499 last ( 1. 862 last ( 9.361 last year) year) year) 2) The tentatively adopted millage rate of 7.499 mills is 5.8% greater than the "rolled-back" rate of 7.090 mills. 3) The second public hearing to consider the final millage rates and budgets for FY 1996/97 shall be at 5:01 P.M., Wednesday, September 25, 1996 in the City Commission Chambers, City Hall, 1700 Convention Center Drive. AGENDAITEM~ DATE~ Tentative Operating and Debt Service Millages September 12, 1996 Page - 2 - PROCEDURE Florida Statutes 200.065, requires that at the conclusion of the first public hearing on the proposed tax rate and budget, the City Commission proceed in the following specific manner: 1. Adopt a tentative ad valorem millage rate for FY 1996/97 operating purposes. This is accomplished by adopting a Resolution that includes the percent increase or decrease over the "rolled back" rate; the required Debt Service millage rate; and, the date, time, and pl~ce of the second public hearing. In prior years, we were mandated to read this Resolution aloud, in its entirety. However, a recent change in state statute requires that only the title be read aloud. 2. Adopt a tentative general operating budget for FY 1996/97. Also included, are budgets for the Enterprise and Internal Service Funds. This is accomplished by adopting a companion Resolution. (See accompanying Agenda Item R-7-A-2) . Both the millage and budget Resolutions must be adopted again after a second and final public hearing. Procedurally, a millage either greater than or less than 7.673 mills may be adopted at this first hearing. However, any millage rate adopted at the end of either the first or second public hearings which exceeds the millage rate of 7.673 mills established in July, 1996, and certified to the Property Appraiser, would require mailing of a revised notice of property taxes to each ta~ayer. The notice would be prepared by the Property Appraiser. at the e~ense of the taxing authority. and must precede the final hearing by 10 to 15 days. ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH The fundamental building block in developing a municipal budget is the establishment of the value of one mill of taxation. A mill of taxation is defined as $1.00 of ad valorem tax for each $1,000 of property value. It is against this value that the millage rate ~s applied to determine the total dollars of ad valorem tax available.. - Tentative Operating and Debt Service Millages September 12, 1996 Page - 3 - On July 1, 1996, we received the 1996 Certification of Taxable Value from the Dade County Property Appraiser, containing the assessed real and personal property values in our City. The preliminary, current-year, gross taxable value of both real and personal property for 1996 is $6,114,562,295, including $137,387,109 for new construction which is the single largest increase this City has experienced in its recent history. This represents an increase of 8.2% over the prior year's final gross taxable value of $5,651,435,599. Al ternately, the preliminary value for 1996 of $6,114,562,295 exceeds the preliminary 1995 value of $5,741,086,882 by $373,475,413, or 6.5%. Comparing 1995's preliminary value of $5,741,086,882 to its final value of $5,651,435,599 yields a decrease of $89,651,283, or 1.6%. This is attributed to equalization losses and appeals. Amendment 10 to the Florida Constitution, known as "Save Our Homes II , was enacted to limit the annual increase in assessed value on homesteaded property to the lesser of three percent (3%) or the Consumer Price Index (CPI) . As such, homesteaded property values were capped at 2.5*, the CPI increase, by the Property Appraiser in accordance with Amendment 10. Comparing the two districts within the City, South pointe and City Center, South Pointe received a larger assessment value increase than City Center. South Pointe increased by $48,381,188, or 15.1%, from $320,238,105 to $368,619,293, whereas; City Center increased by $5,664,928, or 1.1%, from $491,677,581 to $497,342,509. The present value of one mill for the City of Miami Beach has increased from its final value of $5,651,435 in 1995 to its preliminary value of $6,114,562 in 1996. Statutorily, a mill cannot be discounted to any value less than 95%. As permitted by state statute, the City of Miami Beach discounts its mill to 96% for a value of $5,869,980. DETERMINING THE OPERATING MILLAGE LEVY AND AD VALOREM TAXES Given the current year's operating budget, directives from the Commission, City boards, committees, and residents, and input from the Budget Advisory Committee (BAC), on July 17, 1996, the Commission set the operating millage rate at 7.673 mills which is eight and two tenths percent (8.2%) greater than the calculated current year roll-back millage rate of 7.090 mills. This constitutes the third increase which our City has had during the Tentative Operating and Debt Service Millages September 12, 1996 Page - 4 - last five years, for which corresponding increases in services have also been provided as directed. The prior year's tax increase advertised on September 24, 1995, upon conclusion of the first public hearing, advertised an increase of 14.23%, with a millage rate of 7.568 mills, for which enhancements were provided. During the July 17, 1996 discussion relative to setting the proposed millage, the Commission directed the Administration to review the current service level, explore al ternati ve revenue sources, review the Office of Media Relations budget, provide an economic impact analysis for eliminating the two-tier pay system for police and fire employees, chart the growth of the City's budget over a five-year period, reduce the proposed operating millage of 7.673 mills to the greatest extent possible, and fund some of the service enhancements at an operating millage which is less than 7.673 mills. These items were to be explored during the Commission summer recess and reported back to the Commission prior to the first public hearing in September. The Administration has met this challenge and recommends an operating millage of 7.499 mills supported by alternative revenue sources and expenditure decreases which will continue not only the current service level as adjusted, but enhancements to ten departments totaling $970,862 in the areas of Recreation/Culture/Parks ($484,303), Building ($165,000), Engineering and Construction Management ($74,559), Finance ($60,000), Office of Management and Budget ($50,000), City Attorney ($46,000), Mayor and City Commission ($40,000), Procurement ($23,000), Film/Print/Special Events ($18,000), and Internal Audit ($10,000). The operating millage of 7.499 mills is about 2% less than the proposed millage of 7.673 adopted on July 17, 1996, and 5.8% greater than the calculated rolled-back millage of 7.090 mills. It should be noted that the tentative millage of 7.499 is the current year millage. This proposal was discussed by the Administration at the September 3, 1996 Budget Advisory Committee meeting and meets with their approval. Hence, the tentative millage rate is 7.499 $44,018,979 in ad-valorem revenues to the General this to the current year's proceeds of $41,330,511 proceeds of $2,688,468 or a 6% increase. and will yield Fund. Comparing shows additional Tentative Operating and Debt Service Millages September 12, 1996 Page - 5 - DETERMINING THE DEBT-SERVICE MILLAGE LEVY Debt-service millages must be approved by the voters. The base debt-service rate, which excludes the Parks and Recreation Bonds, for FY 96/97 is $10,058,582 and requires a tax rate of 1.714 mills to be fully self supporting and not supplemented by reserves. The balance of unretired debt at September 30, 1996, for General Obligation Bonds, exclusive of the new issue, for which the full faith and credit of the City is pledged, is $43,335,000. This amount is expected to be retired in full by the year 2003. Looking to the future, the General Obligation Parks and Recreation Bond referendum for $15 million, approved by the voters in the fall of 1994, will be felt for the first time during the 1996/97 fiscal year. The associated incremental millage increase arising from this debt will be 0.165 mills resulting in a revised debt-service repayment schedule. Therefore, the new total debt-service millage required will be 1.879 mills (1.714 + 0.165) to generate $11,028,582 in proceeds. This represents an overall increase of 0.017 mills, or less than one percent over the total current year's adopted debt-service millage rate of 1.862 mills. COMBINING OPERATING AND DEBT-SERVICE MILLAGE LEVIES The combined millage rate for both operating and debt service for FY 1996/97 is illustrated below, with a comparative analysis between the final FY 1995/96 and the preliminary FY 1996/97 millages. Tax Rate Tax Levy FY 95/96 FY 96/97 Incl(Dec) FY 95/96 FY 96197 Incl(Dec) General Operating 7.499 7.499 0.000 $41,330.511 $44,018,979 $2.688,468 Debt Service 1.862 1.879 0.017 10.368.286 11.028.582 660.296 TOTAL 9.361 9.378 0.017 $51,698.797 $55.047,561 $3,348.764 Should the tentative tax rates be adopted, the combined tax rate will increase by 0.017 mills, or less than a percent from the previous year as follows: the operating millage will remain constant, and the debt-service millage will increase by 0.017 mills, or less than one percent. Tentative Operating and Debt Service Millages September 12, 1996 Page - 7 - COMBINED MILLAGE LEVY IMPACT ON THE HOMEOWNER The impact of these combined millages into tax payments for a homesteaded property whose taxable value in 1996 was $118,500 is demonstrated below. This net taxable value assumes that the homeowner has a credit for the $25,000 homestead exemption and that the assessed value of the homesteaded property was limited to a 2.5% increase from the provisions of Amendment 10. Taxing Jurisdiction Tax Bill oer $118.500 Miami Beach Dade County School Board Other Totals $34.78 (15.32) 33.52 2.40 $55.38 At a 7.499 millage rate, the total dollars paid annually for both operating and debt service to the City, when compared to the prior year's taxable value of $115,000 ($118,500 - 3,500 for CPI) and 7.499 millage rate, would increase by $34.78, or less than $3.00 per month. SECOND PUBLIC HEARING The second public hearing on the tentatively adopted millage rate and budget for Fiscal Year 1996/97 must be held no later than 15 days after the first public hearing. It is recommended that the second public hearing be set for 5:01 P.M., Wednesday, September 25, 1996 in the City Commission Chambers, City Hall, 1700 Convention Center Drive. CONCLUSION The Administration recommends adoption of the attached Resolution which sets both tentative operating and debt service millage rates for FY 1996/97 and establishes a second public hearing to be held on September 25, 1996, at 5:01 P. M. JGP:PFL:DJJ:me f: \budg\$bud\danielle\wp60\971stpub .mil