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2009-27203 ResoRESOLUTION N0.2009-27203 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1) THE FINAL AD VALOREM MILEAGE OF 5.6555 MILLS FOR GENERAL OPERATING PURPOSES, WHICH IS FOURTEEN AND TWO FIFTHS PERCENT (14.4%) LESS THAN THE "ROLLED-BACK" RATE OF 6.6107 MILLS; AND 2) THE DEBT SERVICE MILEAGE RATE OF 0.2568 MILLS FOR FISCAL YEAR (FY) 2009/10. WHEREAS, on September 10, 2009 the Mayor and City Commission tentatively adopted the operating millage rate 5.6555 mills for general operating purposes, and 0.2568 mills for debt service; and WHEREAS, Section 200.065, Florida Statutes, requires that at the conclusion of the second public hearing on the City's proposed tax rate and budget, the City Commission: 1) adopt the ad valorem millage rate for FY 2009/10 operating purposes; and 2) the required Debt Service millage rate; this is accomplished by publicly announcing the name of the taxing authority, the "Rolled-back" rate, the percentage increase of the "Rolled-back" rate and the millage rates before adoption of the millage levy resolution; and NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE 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 (FY) 2009/10, 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 5.6555 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 fourteen and two fifths percent (14.4%) less than the "Rolled-back" rate of 6.6107 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 0.2568 mills. PASSED and ADOPTED this 24th day of September. 2009. ATTE T: CITY CLERK Robert Parcher AY Matti errera Bower APPRdVED AS TO FORM 8~ LANGUAGE er< FOR EXECUTION s' r f it Attomey(~~ p ~ COMMISSION' ITEM SUMMARY Condensed Title: A resolution of the Mayor and City Commission of the City of Miami Beach, Florida, adopting:1) the Final Ad Valorem Millage of 5.6555 mills for general operating purposes, which is fourteen and two fifths percent (14.4%) less than the "rolled-back" rate of 6.6107 mills; and 2 the Debt Service Milla a rate of 0.2568 mills. Ke Intended Outcome Su orted: Minimize taxes; Control Costs of payroll including salary and fringes; ensure expenditure trends are sustainable over the long term; Improve the City's overall financial health and maintain overall bond rating; Increase community satisfaction with ci services. Supporting Data (Surveys, Environmental Scan, etc.): In the 2009 survey, 65% of residents and 55% of businesses rated the value of city services for tax dollars paid as excellent or good. This represents an improvement of 19% for resident ratings when compared to 2007 and 15% when compared to 2005. Business ratings remain steady when compared to 2007, but improved by 14% when compared to 2005. The value of city services for tax dollars paid appeared as a key driver for residents' perceptions of recommending Miami Beach as a place to live, Miami Beach govemment meeting their expectations, and Miami Beach as a place to live; and for businesses' perceptions of City government meeting their expectations; Miami Beach as a place to run a business and recommending Miami Beach as a place to run a business. In addition, rating for the value of city services for tax dollars paid appeared higher (73.5% excellent or good) among those residents that believe that `28% or less' of their property tax bill goes to fund city services. Businesses identified 'high property taxes' as the most important potential challenge which might face their business over the next several years. 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 improving 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 have become increasingly more challenging in the last three years. In the last two years alone, the General Fund has absorbed almost $28 million in reductions (and more than $31 million across all funds) in a General Fund budget that is $235 million in FY 2008/09. Between FY 1999/00 & FY 2008/09 City of Miami Beach Total Combined Millage decreased by 2.8 mills (11.8%) to 5.8930. In FY 2008/09, total millage for all taxing jurisdictions within the City of Miami Beach was 20.2748, and remains lower than most munici alities in Miami-Dade Coun Issue: Shall the Mayor and City Commission adopt the resolution? Item Summa /Recommendation: The total operating millage is maintained at 5.6555 mills, including a general operating millage rate of 5.5472 and a General Fund Capital Renewal and Replacement millage of 0.1083. The rollback rate is the millage rate required to produce the same level of Citywide property tax revenues in FY 2009/10 as collected in FY 2008/09 and is calculated as 6.6107. The voted debt service millage rate is increased from 0.2375 to 0.2568, an increase of 0.0193, however still lower than the 0.2415 for FY 2007/08. Board Recommendation: Financial Information: Source of Amount Account Funds: ~ N/A 2 OBPI Total Financial Impact Summary: In FY 2008/09, the adopted operating millage rate for general City operations was 5.6555. In FY 2009/10, 5.6555 mills is anticipated to generate approximately $132.7 million in total tax revenues, a decrease of $11.8 million over current year budgeted property tax revenues Citywide (General Fund, City Center RDA and the South Pointe area). However, General Fund property tax revenues will decrease by $10.2 million. Clerk's Office Legislative Sign-Offs: De a Dire for As i tant Cit M 'r Mana er o ~- ~ v 1i+ 1~ ~ ~ ~ A~~INDA ITEM _7 -v .~sIE _ m MIAMIBEACH City of Miami Beath, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: May r Ma 'Herrera Bower and Members of the City Commission FROM: J onzalez~/, i y Manag DATE: September 24, 2009 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1) THE FINAL AD VALOREM MILEAGE OF 5.6555 MILLS FOR GENERAL OPERATING PURPOSES, WHICH IS FOURTEEN AND TWO- FIFTH PERCENT (14.4%) LESS THAN THE "ROLLED-BACK" RATE OF 6.6107 MILLS; AND 2) THE DEBT SERVICE MILEAGE RATE OF 0.2568 MILLS FOR FISCAL YEAR (FY) 2009/10. ADMINISTRATION RECOMMENDATION The Administration recommends that the City Commission adopt the attached Resolution which sets the following: 1) Final adopted millage rates for Fiscal Year (FY) 2009/10 General Operating 5.5472 mills Capital Renewal & Replacement 0.1083 mills Sub-Total Operating Millage 5.6555 mills (no change from FY 2008/09) Debt Service 0.2568 mills (0.2375 last near, 8.1 % increase) Total 5.9123 mills (5.8930 last year, 0.3% increase) 2) The final adopted combined millage rate of 5.9123 mills is 0.0193 mills more than the 5.8930 combined millage rate for FY 2008/09. The final adopted operating millage for FY 2009/10 is 0.9552 mills less than the roll-back rate of 6.6107, and thus, the City is not required to publish a Notice of Tax Increase. The first public hearing on the tentative millage rates and budgets for FY 2009/10 was held on September 10, 2009. The millage rates presented herein are those which were tentatively adopted at the end of that first public hearing. The rollback rate is the millage rate required to produce the same level of property tax revenues in FY 2009/10 as collected in FY 2008/09. The rollback rate is calculated by dividing the prior year property tax revenues by the current year property values, after new construction, major improvements, annexations, deletions and tax increment districts are removed from current year property values. Under the recently enacted State legislation, the City may elect to approve millage rates above the roll-back rate up to the constitutional cap of 10 mills subject to an extraordinary vote by the Commission or referendum: FY 2009/10 Final Millage Adoption September 24, 2009 Page 2 Option I: Millage up to 6.9048 (equivalent to a 2.5% increase in Property Tax revenues, net of the impact of the Tax Increment Districts) requires majority of the approval of the Commission Option II: Millage up to 7.5953 (equivalent to a 10% increase in Property Tax revenues above Option ()requires atwo-thirds approval (5 of 7 votes) of the Commission Option III: Millage above 7.5953 requires unanimous approval of the Commission or referendum up to the 10 mill cap PROCEDURE Florida Statutes 200.065 requires that at the conclusion of the second public hearing on the proposed tax rate and budget, the City Commission proceed in the following specific manner: Adopt an ad valorem millage rate for FY 2009/10 operating purposes and debt service. The statute requires the name of the taxing authority, the "Rolled-back" rate, the percentage increase over the "Rolled-back" rate, and the millage rates be publicly announced before adoption of the millage levy resolution. State statute requires that only the title be read aloud. 2. Adopt a general operating budget for FY 2009/10. Also included, are budgets for G.O. Debt Service, RDA Fund-Ad Valorem taxes, Enterprise and Internal Service Funds. This is accomplished by adopting a companion Resolution. (See accompanying Agenda Item R7A2). ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH On July 1, 2009, the City received the "2009 Certification of Taxable Value" from the Property Appraiser's Office stating that the taxable value for the City of Miami Beach is $24,694,916,494 including $1,782,256,132 in new construction. The preliminary 2009 value represents a decrease of $2.204 billion or 8.2 percent compared to 2008's July 1 Certification of Taxable Value of $26,898,698,386. The comparative assessed values for the Miami Beach Redevelopment Agency City Center redevelopment district decreased from $3,707,103,133 to $3,446,724,524, adecrease of $260,378,609, or a 7.0 percent decrease in values over 2008 certified values. In addition, assessed values within the geographic area formerly known as the South Pointe redevelopment district decreased from $3,684,154,640, to $3,559,454,762, adecrease of $124,699,878, or a 3.4 percent decrease in values over 2008 certified values. As a result, taxable values in the areas outside the City Center RDA/South Pointe area decreased by 9.3 percent, from $19.507 billion to 17.689 billion, a decrease of $1.8 billion. FY 2009/10 Final Millage Adoption September 24, 2009 Page 3 COMPARATIVE ASSESSED VALUES (in billions) an. Jan. 1 2008 Value (in Value (in Change from 2008 billions) billions) Value (Bud et) so uy 2008 Final Value As of July 1 (For FY (For FY 2009 % Change 2008/09 2008/09 (For 2009/10 $ from Final Budget) Projection) Budget) (in billions) % Value RDA -City Center 3.7071 3.3591 3.4467 $ (0.2604) _7.0% 2.6% South Pointe Area 3.6842 3.6502 3.5595 $ (0.1247) -3.4% -2.5% General Fund 19.5074 18.8747 17.6887 $ (1.8187) -9.3% -6.3% Total Citywide 26.8987 25.8840 24.6949 $ (2.2038) _g.2% -4.6% DETERMINING THE OPERATING MILEAGE LEVY 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, this value for each mill is determined by the 2009 Certification of Taxable Value and has been set at $24,694,916,494. 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 $23,460,170. The 95 percent value of 1 mill outside the City Center RDA/South Pointe area is $17,138,899. Impacts of Millage Roll-back In FY 2008/09, the operating millage rate for general City operations was adopted at 5.6555. Based on the July 1, 2009 Certification of Taxable Value, 5.6555 mills would generate approximately $132,678,991 million in tax revenues, a decrease of $11,840,316 over current year budgeted property tax revenues Citywide (General Fund, City Center RDA and the South Pointe area). The General Fund property tax revenues will decrease by $10.2 million, precluding the City from absorbing normal increases in salary and fringes and other normal increases due to inflation, and requiring significant reductions in current service levels. The rollback rate is the millage rate required to produce the same level of Citywide property tax revenues in FY 2009/10 as collected in FY 2008/09, therebyforgoingany revenues associated with growth in assessed values. The rollback rate is calculated by dividing the prior year property tax revenues by the current year property values, after new construction, major improvements, annexations, deletions, and tax increment districts are removed from current year property values. For FY 2009/10, the resulting Roll-Back Rate is 6.6107, 0.9552 mills more than the millage rate adopted for FY 2008/09. FY 2009/10 Final Millage Adoption September 24, 2009 Page 4 General Obligation Debt Service Fund The general obligation debt service payment for FY 2009/10 is approximately $6 million, reflecting a decrease of $44,447. Based on the July 1, 2009 Certified Taxable Value from the Property Appraiser, these bonds would require the levy of a voted debt service millage of 0.2568 mills. This represents an increase of 0.0193 mills. Despite this increase, the debt service millage remains significantly below historic levels. Total Combi ned Mill age 0 ., a ~ ao . ~ N 98 ~ 'W 'a D2 03 '04 '~ '~ 07 08 '09 'n Fsca I Years Total Combined Millage Rates Illustrated below is a comparison of the combined millage rates and ad valorem revenues to the City of Miami Beach for FY 2008/09 (final) and FY 2009/10 (preliminary) including RDA. It is recommended that in the General Fund, 0.1083 mills of the total operating millage be dedicated to renewal and replacement, resulting in $2.027 million in renewal and replacement funding. -_ City of Miami Beach Millage Rates ', ~ 08/09 i FY 09/10 Inc/(Dec) % Inc/(Dec) _...__ ._ . .. Operating ..._ e 5.5472 _ _ r.._._.~ 5.5472; . 0.0000 0.0% Capital Renewal & Replacement 0.1083 0.1083 0.0000 0.0% Voted Debt Service 0.2375 0.2568 0.0193 8.1% Total ~ 5.89301 5.9123': 0.0193 0.3% If these recommended millage rates are adopted, then the City of Miami Beach's total operating millage will remain unchanged as compared to the current year, and the voted debt service millage will increase by 0.0193 mills. FY 2009/10 Final Millage Adoption September 24, 2009 Page 5 The following table reflects the resulting property tax levy for FY 2009/10 based on these tax rates and provides historical trends for both taxable values based on the July 1 Certified Taxable Values each year, and the resulting tax levy. 220 30 ~ 2 00 a ~ 180 ~. > 160 20 ~ ~ < x 120 ~ 180 10~ 60 °' 40 0 ci 20 0 v 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 ~PropertyValues tTax Levy including Debt Combining Jurisdictional Operating and Debt Service Millaae Levies City of Miami Beach property owners must also pay property taxes to Miami-Dade County, the Miami-Dade County School Board, the Children's Trust, the South Florida Water Management District, and the Florida Inland Navigation District. Based on the FY 2009/10 tax rates for Miami-Dade County that were approved at their first public hearing in September 2009, the countywide tax rate is proposed to remain flat at 4.8379 mills; the library tax rate is proposed to remain flat at 0.3822 mills; and the debt service millage is also proposed to remain flat at 0.2850. The adopted tax rate for the Miami-Dade School District is 7.995 which, is 0.198 mills greater than the prior year millage of 7.797. The Children's Trust millage is increased to 0.5 mills (from 0.4212 in FY 2008/09). Proposed tax rates for other jurisdictions total 0.6585 mills, unchanged from FY 2008/09. Using tax rates known at this time, the changes in tax rates are estimated in the following table. FY 2009/10 Final Millage Adoption September 24, 2009 Page 6 OVERLAPPING TAX MILEAGE FY 07/08 FY 08/09 FY 09/10 CR of Miami Beach Mill a Rates Operating 5.5173 5.5472 5.5472 Capital Renewal & Replacement 0.1382 0.1083 0.1083 Subtotal0 ratin Mill a 5.6555 5.6555 5.6555 Voted Debt Service 02415 0.2375 0.2568 Total 5.8970 5.8930 5.9123 Miami Dade Count FY 07/08 FY 08/09 FY 09/10 Count ide 4.5796 4.8379 4.8379 Library 0.3842 0.3822 0.3822 Debt Service 02850 0.2850 0.2850 Subtotal 52488 5.5051 5.5051 FY 07/08 FY 08/09 FY 09/10 School Board 7.9480 7.7970 7.9950 Children's Trust 0.4223 0.4212 0.5000 Other 0.6585 0.6585 0.6585 Total 20.1746 20.2748 20.5709 In FY 2008/09, the Miami Beach portion of the total tax bill was 29 percent. With the recommended millage rates for FY 2009/10, the Miami Beach portion of the FY 2009/ 10 tax bill is anticipated to be 29 percent of the total bill based on the proposed tax rates. Combined Millage Levv Impact on Miami Beach Property Owners Homesteaded Properties 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 2008, the CPI has been determined to be 0.1 percent and therefore, the increase is capped at 0.1 % for increased values as of January 1, 2009. However, given the downturn in the market, the average homesteaded property value in Miami Beach declined. Based on information from the Miami-Dade County Property Appraiser, the taxable value of the average homesteaded in Miami Beach as of January 1, 2008 was $297,281. As of January 1, 2009, the average taxable value for homesteaded property had declined to $282,801, a decline of 4.9%. It would be anticipated that more recently purchased properties would have experienced a greater decline, while longer term homesteaded properties may have experienced the 0.1 % increase. FY 2009/10 Final Millage Adoption September 24, 2009 Page 7 Non-Homesteaded Properties Non Homesteaded properties would have experienced a more significant decline. The average taxable value for all residential properties (both homesteaded and non-homesteaded) declined from $360,895 to $328,557, a decline of 9%. Given that the change in taxable value for all existing properties was 14.8 percent, it can be imputed that the decline in commercial properties was even greater. Property Tax Changes The following table provides examples of changes in property taxes as a result of these declines in values, using the County rollback rates. PROPERTY TAX CHANGES Residential Other Homesteaded All Exam Ie 1 Exam le 2 FY 2008/09 Taxable Value (as of January 1 2008) $ 297,281 $ 360,895 $ 500,000 $ 1,000,000 2008 Taxes City of Miami Beach Operating $ 1,681 $ 2,041 $ 2,828 $ 5,656 Voted Debt 71 86 119 238 Total Miami Beach $ 1,752 $ 2,127 $ 2,947 $ 5,894 Miami Dade County 1,637 1,987 2,753 5,505 Schools 2,318 2,814 3,899 7,797 Other 321 390 540 1,080 Total $ 6,028 $ 7,318 $ 10,139 $ 20,276 ~° Chan a -4.9% -9.0% -14.8% -14.8% FY 2009/10 Taxable Value (as of January 1 2009) $ 282,801 $ 328,557 $ 426,000 $ 852,000 2009 Taxes @ Proposed Tax Rates City of Miami Beach Operating $ 1,599 $ 1,858 $ 2,409 $ 4,818 Voted Debt 73 84 109 219 Total Miami Beach $ 1,672 $ 1,942 $ 2,518 $ 5,037 Miami-Dade County 1,557 1,809 2,345 4,690 Schools 2,261 2,627 3,406 6,812 Other 328 381 494 987 Total 5,817 6,758 8,763 17,526 $ Change in Taxes City of Miami Beach Operating $ (82) $ (183) $ (419) $ (838) Voted Debt 2 2 10 19 Total Miami Beach $ 80 $ 185 $ 429) $ 857 Miami-Dade County 80 178 408 815 Schools (57) (187) (493) (985) Other 7 9 46 93 Total $ 210 $ 560 $ 1,376 $ 2,750 " Source: Miami-Dade Coun Prope Appraiser FY 2009/10 Final Millage Adoption September 24, 2009 Page 8 CONCLUSION The Administration recommends adoption of the attached Resolution which sets both final operating and debt service millage rates for FY 2009/10. JMG:KGB:JC r SUNDAY, SEPTPM~ER 13,:20.09 .I Z7M6 - <. _ _. . ~ ,. .:_ , ... - - t . CITY .OF `IV~fA~11,1=~B~E~CH . ~ . . _~. ,~ . .: CITY COMI~f~f0t~ .ItAEETI~NG 1~~ s_BL~I~.~IEAR•~N~,~ . .. _-~ , ,~ - _ ._~, NOTICE IS HEREBY_given that a~Spec:ai Gommisslon Meting'regardmgthe2rrd•Proposed But~get Public Hearfngs.for FY'2009%2D10+wlli°b"e held.by the Cfiy Commission of the Gity,of Miami Beach bFlorida, on=Tltursday;~September~l4; 2009, commetlaing.at 5:00`P.M.; inthe=Commission Chambers 3rtl'floef, :- Ciiy Na11,1700 Convention Center Dnve, MIamT'.Beadh;'Floritla..` - 5:01 p.m. Thesecond public hearing adopting'the proposed millage:rate:and budget for FY 2009/2010=forthe ~ftjr_of=Miami Beaeh< -- ~.:. - The second public hearing adopting the~ptnposetl n1111age rate antl~budget for FY 21~OJ720j0~or~fie~Nortnandy:8ha[es Local Government°Neighborhood _ . ~_. . ImprovemenPDistrict. - a ~'" ' lo-atldition, the•Gity Commission.may ds~uss:othe~~G~typusiness+and takeidther necessary,action atlltis meeting ;, _ - Inquiries conceming_this, meeting should'hq:ai~cted~tii the Dffiee:of?Budget and Performance lmpcovemerfi~af(30~) 673=7.b10. ,.. ~._ 'RoberC E .Par~her,.City Clerk ~•' =.r; GIty~BfdMiami~Beach ~~:• Pursuard to'Seciion 286.0105; Fla. Stat ,~the,bttysf`ie ~~y~advlses+tfie~pubUc that dca;'Gersoq~deoitles toreppeal any~d~©~ipn made.by°the~ ;Commission with respect to any anHtter-coni;idered q~ds;meet gl gsoilits healing; Suoh3peP5onfmust~ensure:that~a~verbdtim'tecord a proeeedrn~maYle; which record includes the testimony and ewder~aupon whii3hk`tft"e appeaFis ta.~e~based .Thisma$ce.doesmot constitute consert~T_Gity fo~s't~'ieiritfodudtion or admission of otherwise inadmissible or ir[elevant.evitle a ,nor=doesatlaUthodze:dhalleng9srorngRpe8ls ndt!~~~rlse°allowed byElaW _ =~~ ~ - - .~- To request this. material in accessible form's us)gn;language iM~rppeters, information on.aGoess for persons wfthtdis9b~fiitlesPagrUorany accRmmodation~to review any:documenYorparticipate-ln at~~sponsored proceetlirjg, please contact_(3'05) 604-2489 (vdiRe);(305)a~6`~8 ~Z21 B (TTY)"five dgYs?in advanee:to , initiate your request. TTY users may. aiso~o~fl~11.(Florida Relay ~`ervicQ). . ,., Y ~ '' `"` ~,.. ,_.