2010-27493 Reso R7G-22010-27493
RESOLUTION NO.',
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING
TENTATIVE BUDGETS FOR THE GENERAL, G.O. DEBT
SERVICE, RDA AD VALOREM TAXES, ENTERPRISE, AND
INTERNAL SERVICE FUNDS FOR FISCAL YEAR (FY) 2010/11,
SUBJECT TO A SECOND PUBLIC HEARING SCHEDULED ON
MONDAY, SEPTEMBER 20, 2010 AT 5:01 P.M.
WHEREAS, the City's FY 2010/11 proposed workplan and budget was developed
through an intensive review process that included City Commission retreats in January and May
2010, as well as series of budget briefings with the Finance and Citywide Projects Committee
between June and July, 2010; and
WHEREAS, at the July 7, 2010, Finance and Citywide Projects Committee
meeting, the Committee endorsed an approach to balancing the City's budget that included,
employee "give-backs", efficiencies and reductions, use of Fiscal Year 2008/09 year-end surplus,
additional transfers from Resort Tax revenues to cover tourism expenditures in the General Fund,
and an increase in the general operating millage rate to recapture the $13.7 million decrease in
property tax revenues due to declines in property values; and
WHEREAS, on July 14, 2010, the Mayor and City Commission adopted the
proposed General Fund operating millage of 6.4143, sufficient to recapture the $13.7 million loss in
property tax revenues due to declines in property values; and
WHEREAS, at the August 25, 2010, Finance and Citywide Projects Committee
meeting, the Committee endorsed the approach to modify the $29 million budget gap; and
WHEREAS, this approach to address the budget gap reduced the funding from
millage recapture from $13.7 million to $10.1 million, and offset this reduction with a $3.6 million
transfer of prior year-end surplus from the Parking Operation Fund; and
WHEREAS, in order to utilize the use of FY 2008/09 year-end surplus funds, the
Commission would need to waive the established City policy of not utilizing one-time, non-recurring
revenue to subsidize recurring personnel, operating, and maintenance costs.
NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that, following a duly noticed public
hearing on September 15, 2010, the City Commission hereby waives the City's policy of not utilizing
one-time, non-recurring revenue to subsidize recurring personnel, operating and maintenance costs
for Fiscal Year .2010/11, and hereby adopts tentative budgets for the General, G.O. Debt Service,
RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal Year 2010/11 as
summarized and listed below, subject to a second public hearing scheduled at 5:01 P.M., Monday,
September 20, 2010.
GENERAL OPERATING REVENUES
Ad Valorem Taxes
Ad Valorem -Capital Renewal & Repl.
Ad Valorem Taxes -Normandy Shores
Other Taxes
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeits
Interest
Rents and Leases
Miscellaneous
Other -Resort Tax Contribution
Reserves- Buildiing Dept Operations
Other -Non Operating Revenues
FY 09 Year-End Surplus Set Aside
FUND TOTAL
G.O. DEBT SERVICE FUND
Ad Valorem Taxes
FUND TOTAL
RDA FUND-City TIF only
AD VALOREM TAXES
Properly Taxes-RDA City Center
FUND TOTAL
ENTERPRISE FUNDS
Convention Center
Parking
Sanitation
Sewer Operations
Storm Water
Water Operations
FUND TOTAL
INTERNAL SERVICE FUNDS
Central Services
Fleet Management
Information Technology
Property Management
Risk Management
FUND TOTAL
G.O. DEBT
GENERAL SERVICE RDA
$ 110,367,361
1,777,254
100,S17
25,417,600
15,506,204
9,618,140
10,348,050
3,211,263
3,552,000
4,892,352
11,393,221
24,465,000
1,546,709
11,665,443
3,657,000
$ 237,518,114
$ 6,026,858
$ 6,026,858
$ 17,177,816
$ 17,177,816
ENTERPRISE TOTALS
$ 110,367,361
1,777,254
100,517
25,417,600
15,506,204
9,618,140
10,348,050
3,211,263
3,552,000
4,892,352
11,393,221
24,465,000
' 1,546,709
11,665,443
3,657,000
$ 237,518,114
$ 6,026,858
$ 6,026,858
$17,177,816
$17,177,816
$ 12,832,911 $12,832,911
38,446,850 38,446,850
16, 562,258 16, 562,258
40,024,931 40,024,931
16,893,083 16,893,083
31,030,070 31,030,070
155,790,103 $155,790,103
INTERNAL
SERVICE
$ 856,355
8,375,372
14,427,730
8,233,171
20,542,249
52,434,877
TOTAL -ALL FUNDS ~>~ ~-- ~'S~ '~~~ ~~~
APPROPRIATIONS
G.O. DEBT
FUNCTIOWDEPARTMENT GENERAL SERVICE RDA ENTERPRISE
MAYOR & COMMISSION $1,534,322
ADMINISTRATIVE SUPPORT SERVICES
CITY MANAGER 2,350,894
Communications 878,482
BUDGET & PERFORMANCE IMPROV 1,820,829
FINANCE 4,124,205
Procurement 969,238
Information Technology
HUMAN RESOURCES/LABOR RELATIC 1,697,128
Risk Management
CITY CLERK 1,500,597
Central Services
CITY ATTORNEY 4,002,642
ECONOMIC DEV. & CULTURAL ARTS
Economic Development
REAL ESTATE, HOUSING & COMM DES 776,768
Homeless Services 759,337
BUILDING 9,316,891
PLANNING 3,113,588
Guttural Arts
TOURISM &'CULTURAL DEV 2,643,624
Tourism & CuRural Development
CONVENTION CENTER 12,832,911
oPERAnoNs
Code Compliance 4,146,931
Community Services 430,093
PARKS 8 RECREATION 27,772,711
PUBLIC WORKS 6,372,884
Property Management
Sanitation 16,562,258
Sewer . 40,024,931
Stormwater 16,893,083
Water 31,030,070
CAPITAL IMPROVEMENT PROJECTS 4,520,748
PARKING 38,446,850
FLEET MANAGEMENT
PUBLIC SAFETY
POLICE 88,920,529
FIRE 56,115,331
CITYWIDE ACCOUNTS
CITYWIDE ACCTS-Normandy Shores 157,678
CITYWIDE ACCTS-Operating Contingent 1,321,902
CITYWIDE ACCTSOther 9,578,508
Transfers
Capital Investment Upkeep Fund 200,000
Info & Comm Technology Fund 715,000
CAPITAL RENEWAL & REPLACEMENT 1,777,254
G.O. DEBT SERVICE 6,026,858
INTERNAL
TOTALS SERVICE
$1,534,322
2,350,894
878,482
1,820,829
4,124,205
969,238
14,427,730
1,697,128
20,542,249
1,500,597
856,355
4,002,642
776,768
759,337
9,316,891
3,113,588
2,643,624
12,832,911
4,146,931
430,093
27,772,711
6,372,884
8,233,171
16,562,258
40,024,931
16,893,083
31,030,070
4,520,748
38,446,850
8,375,372
88,920,529
56,115,331
157,678
1,321,902
9,578,508
200,000
715,000
1,777,254
6,026,858
RDA-City TIF only
City Center 17,177,816 17,177,816
TOTAL -ALL FUNDS $237,518,114 $6,026,858 $17,177,816 $155,790,103 $416,512,891 $52,434,877
avro-27c~43
PASSED and ADOPTED this 15th day of September, 2010.
AY
ATTEST:
Gvt.
CITY CLERK
APPROVED AS TO
FORM & LANGUAGE
& FnH EXECUTION
g t~3~1~
-- om ,ate
COMMISSION ITEM SUMMARY
Condensed Title:
A resolution of the Mayor and City Commission of the City Of Miami Beach, Florida, adopting tentative
budgets for the General, G.O. Debt Service, RDA Ad Valorem Taxes, Enterprise, and Internal Service
Funds for Fiscal Year 2010/11 subject to a second public hearing scheduled on Monday, September 20,
2010 at 5:01 P.M.
Cey Intended outcome Supported:
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 city services
• Supporting Data (Surveys, Environmental Scan, etc.): Based on the 2009 community survey, quality
of life in the City is rated highly, the City is seen as an'excellent' or'good' place to live, work, play orvisit,
and over'/4s of residents would recommend it to others as a place to live. Impressively, 31 of the
residential tracking questions from 2007 experienced increases in each of the areas measured by an
overall average of approximately 7.0%; and 28 of 32 business tracking questions experienced increases
measured by an overall average of approximately 8.8%. Important findings were: Cleanliness of
canals/waterways, the job the city is doing to address homelessness, and storm drainage were all
identified as areas for improvement, although improved from prior surveys; cleanliness, code
enforcement, and arts and culture were identified as services the city should strive not to reduce; and
value of service for tax dollars paid, cleanliness of streets, satisfaction with contacting the City
government handling of special events, traffic flow, code enforcement, police ratings, condition of roads,
availability of public parking, and consistency of inspections were all identified as key drivers of overall
satisfaction levels.
Issue•
Shall the Mayor and City Commission adopt the attached resolution establishing tentative budgets for the
General; G.O. Debt Service, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal
Year 2010/11 and setting the date for the second public hearin ?
Item Summary/Recommendation:
The FY 2010/11 Proposed Work Plan and Budget maintains current service priorities for the community,
despite property tax rates set at 1.2 mills (16 percent) lower than FY 2006/07 when property values were
similar to the 2010 certified values. Water, sewer, and stormwater rates and reduced household sanitation
fees, result in a combined reduction of $140 er household er ear from our ro'ections a ear a o.
Board Recommendation:
Financial Information:
Source of ~ -.-:Amount ~ ~ ~ Accoant'` ~ ` .
Funds: 1 $237,518,114 General Fund Operating
2 $ 6,026,858 G.O. Debt Service
3 ;~ $ 17,177,816 RDA Funds-Ad Valorem Taxes
4 $155,790,103 Enterprise Funds
Total $416,512,891 *Net of Internal Service Funds
OBPI $ 52,434,877 Internal Service Funds
Financial Impact Summary: Maintaining the General Fund Operating millage at the FY 2009/10 level
resulted in a gap of approximately $29 million in the General Fund due to the decreased property tax
revenues and increased salary and pension costs. Employee givebacks targeted at $15.3 million over 2
years are critical to addressing the gap in addition to millage recapture, efficiencies, and tweaking service
levels to achieve reductions with minimal service impacts, as well as evaluating potential new revenue
sources.
City Clerk's Office Legislative Tracking:
Si n-Offs•
De artment Direct r Assistant City Manager City Manager
J ~ ~ ~ A ~1 dA 1 EM ~1 / Z
! DATE q'I S`IO
® MIAMIBEACH
Cit~r of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City C m~iission
FROM: Jorge M. Gonzalez, City Manager
DATE: September 15, 2010
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ADOPTING TENTATIVE
BUDGETS FOR THE GENERAL, G.O. DEBT SERVICE, RDA AD
VALOREM TAXES, ENTERPRISE, AND INTERNAL SERVICE FUNDS
FOR FISCAL YEAR 2010/11 SUBJECT TO A SECOND PUBLIC
HEARING SCHEDULED ON MONDAY, SEPTEMBER 20, 2010 AT
5:01 P.M.
ADMINISTRATION RECOMMENDATION
The Administration recommends that the City Commission adopt the attached Resolution
which establishes tentative budgets for the General, G.O. Debt Service, RDA Ad Valorem
Taxes, Enterprise, and Internal Service Funds for Fiscal Year (FY) 2010/11.
PROCEDURE
As outlined in the companion General Operating Millage Agenda Item, Section 200.065,
Florida Statutes specifies the manner in which budgets are adopted. First, the tentative
millage rate for both the general operating and debt service is adopted, then immediately
thereafter, tentative budgets by fund are adopted. The attached Resolution adopting
tentative budgets for the General, G.O. Debt Service, RDA Ad Valorem Taxes, Enterprise,
and Internal Service Funds for FY 2010/11 is therefore presented to you at this time for
adoption.
Additional details are contained in my Budget Message which is attached, however,
highlights of that document are outlined below.
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
enhanced capital funding and reserves.
Adopting Tentative Budgets
September 15, 2010
Page 2
However, these objectives have become increasingly more challenging in the last four 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 three years
alone, the General Fund has absorbed almost $43 million in reductions (and almost $50
million and 245 positions across all funds) in a General Fund budget that is $226 million in
FY 2009/10, almost 20 percent.
GENERAL FUND BUDGET
Early in the development of the City's budget, I communicated that we were anticipating that
the City's General Fund would be facing its most difficult budget year in many years. Our
preliminary estimates early in the calendar year ranged from approximately $26 to $40
million, as discussed in our Commission retreats in January and May of this year.
We continued to refine our estimates as more information became available, the most
significant of which were the City's annual required contributions to the Fire and Police and
General Employees pension plans and the certification of property values in the City from
the County property appraiser. At the time of adoption of the proposed millage in July, it was
estimated that the City had a $32 million gap to address due to the following:
• Increases in the General Fund portion of the City's annual required contributions to
the Fire and Police and General Employees pension plans, primarily due to the
downturn in the market and updated assumptions in the Fire and Police Pension
Plan
• Increases in health insurance costs
• Increase in Internal Service Fund charge-backs to Department primarily due to
increases in the Risk Management Fund for claims incurred but not reported, as well
as increased costs of legal services
• The impact from those bargaining units that had not yet reached agreement with the
City as of May, 2010 (American Federation of State, County and Municipal
Employees-AFSCME, Communications Workers Union - CWA, Fraternal Order of
Police -FOP, and International Association of Fire Fighters - IAFF), due to salary
increases from merits and steps received in the current Fiscal Year that had not
been budgeted and further increases for FY 2010/11, as well as increased pension
costs to reflect the fact that the budgeted 2 percent employee give-back to pension
had not yet been achieved
• The impact of the decline in property values throughout the City, resulting in a loss of
$13.7 million in property values outside the City Center Redevelopment Area (RDA),
a loss of 11.8 percent and almost half of the projected budget gap.
Together, salaries and fringes represent approximately 73 percent of the total current
service level (CSL) budget of $246 million, (including the impacts of merit/steps increases,
pension contributions, etc.). It is important to note, that approximately $28 million in other
operating costs (11 percent of CSL budget) reflected a decrease of approximately $500,000
almost half of which was offset by approximately $270,000 of the first year impacts of the
new living wage requirements. This $500,000 savings reflects the results of various cost
savings initiatives by the City such as re-bidding contracts, careful review of department line
item expenditures, other efficiencies, etc.
Adopting Tentative Budgets
September 15, 2010
Page 3
Since July, as we committed to do, we have continued to refine our projections further. Our
revenues, in particular, tend to have greater fluctuations than expenditures, and, as a result,
we are usually conservative early in the process and refine these projections over the
summer. Changes since July include increased revenue estimates (primarily franchise and
utility taxes, sales taxes, business tax receipts and fire inspection fees, building development
process fees, rents and leases, increased reimbursements from capital projects and
administrative fees charged to enterprise funds, offset by decreased interest earnings). As a
result, the projected gap has been reduced from $32 million to $29 million.
Balancing the budget with such a significant gap has been almost ayear-long process. No
sooner did we adopt the budget for FY 2009/10 last September, than we began working on
approaches to balance the FY 2010/11 budget. Foremost among these was the importance
of employee "give-backs". With the adoption of the FY 2009/10 budget, we, had only
recently began our negotiations on the bargaining unit agreements, four of which were set to
expire September 30, 2009, and one of which was due to expire April 30, 2010. In the FY
2009/10 budget, we included a modest "give-back" amount in the General Fund budget of
$3.5 million, knowing that negotiations would take time to conclude. For the FY 2010/11
budget, the Commission direction was significantly more aggressive as we were directed to
pursue an additional $11 million, for a combined total of $15.3 million across all funds from
employee "give-backs".
In addition to employee "give-backs", we evaluated each department, once again, for
efficiencies, and tweaking service levels to achieve reductions with minimal service impacts,
as well as evaluating potential new revenue sources. The various approaches used to
balance the General Fund budget are shown in the following chart.
Transfer of Prior
Year Surplus from
The Parking Fund,
FY 2008/t
Surplus
Millage Recapture
Resort Tar
Transfers
Efficiencies 8
Reductions
Revenue
Enhancements Employee
"Give-backs"
Adopting Tentative Budgets
September 15, 2010
Page 4
The proposed Work Plan and Budget as outlined in my Manager's Budget Message
(attached) proposes that the $29 million gap be addressed through the following means:
• $7.3 million Additional Employee "Give-backs" (almost $9 million in total
impact to the General Fund Budget)
This in addition to $2 million in reductions already included in the
General Fund CSL expenditures from employee merit "givebacks"
by the UnclassifiedP'Others" employees and Governmental
Supervisors Association (GSA), and from the Year 1 impacts of no
cost of living adjustment (COLA) for Police and Fire on the City's
contribution to the Police and Fire pension fund. Further, there are
an additional $3 million in "givebacks" in other funds - a total of
approximately $12 million in savings in FY 2010/11. To date no
employee "give-backs" have been achieved .with the CWA
bargaining unit. As described below.
• $1.1 million Revenue Enhancements
These include increases to Rescue transport fees consistent with
rates being proposed by the Miami-Dade County Fire Department;
eliminating the non-resident sibling discount in our recreation
programs; increasing pool fees for non-residents; increasing the
activity fees in our after schools and summer camps to cover the
costs of supplies; modest increases to tennis fees; increases in
sidewalk cafe fees; establishing a commercial banner program
throughout the city, charging a late fee for special event
applications, establishing fees for wedding ceremony permits; and
increasing revenues from anticipated corporate sponsorships.
Additional details are contained in Exhibit E attached to the
Manager's message.
• $1.5 million Efficiencies and Reductions
These include a reduction of approximately $740,000 through
efficiencies, $80,000 in savings from extending the current winter
schedule for pools from September through May; $46,000 in
reduced contributions to multiple non-profit organizations and
elimination of the $90,000 reduced contribution to the Police
Athletic League; $45,000 from reducing one of two victims
advocate positions to part-time; $21,000 in savings by reducing the
change-out frequency for our hanging basket program, and
approximately $230,000 from reductions in administrative support
staff. An additional $260,000 in savings are programmed from the
General Fund impact of efficiencies in the Information Technology
and Property Management Funds. Additional details are contained
in Exhibits A through D attached to the Manager's message.
These initiatives result in a net reduction of 18 full time positions
and 5 part time positions in the General and Internal Service
Funds.
Adopting Tentative Budgets
September 15, 2010
Page 5
• $2.0 million Increased transfers from Resort Tax to the General Fund
Additional funds are available due to increased resort tax revenues
and decreased debt service to cover tourism eligible expenses in
the General Fund
• $3.66 million FY 2008/09 Year-e,nd Surplus
This was set aside to address potential shortfalls in FY 2010/11,
however, it will require a waiver of City policy as described below.
• $3.6 million Transfer of Prior Year Surplus from The Parking Operating
Fund
There are sufficient funds available for prior year's revenue in
excess of expenditures to provide for this transfer.. However, the
City must raise Parking fees as described below for these funds to
be recurring.
• $10.1 million Millage Recapture
Operating millage increase of 0.5600 needed to recapture a portion
of the $13.7 million revenue loss due to decline in property values
outside of the City Center RDA
Additional Employee "Give-Backs"
As noted above, approximately one-quarter of the budget shortfall is anticipated to be
addressed through employee "give-backs". To-date we have ratified and approved
agreements with four of our five bargaining units: The American Federation of State, County
and Municipal Employees (AFSCME), the Government Supervisors Association (GSA), the
Fraternal Order of Police (FOP), and the International Association of Fire Fighters (IAFF).
Each of these bargaining units has agreed to significant concessions over the 3 year terms
of their agreements. In addition, similar concessions began to be implemented for non-
bargaining unit employees as early as October 2009. As a result between FY 2009/10 and
FY 2010/11, approximately $13 million in concessions Citywide will be achieved from these
groups.
Regrettably, in August, after more than a year of negotiations, we declared Impasse with the
Communications Worker's of America bargaining unit (CWA). The employee "give-backs" in
the General Fund budget assume approximately $1.4 million in concessions from CWA to
be achieved by the end of the fiscal year, towards a target of $2 million in CWA concessions
across all funds.
Efficiencies and Reductions
In addition to employee "give-backs", we have identified approximately $1.3 million in
efficiencies and reductions while only tweaking service levels in the few areas described
above. It is important to note that this included a review of operations to identify, where
possible, privatizing and outsourcing of functions. While our contracts with AFSCME, GSA,
FOP and IAFF, preclude this possibility, at least in the short-term, we have identified several
potential areas that could result in recurring annual savings of approximately $1 million in the
General Fund, and more than $1 million outside the General Fund.
Adopting Tentative Budgets
September 15, 2010
Page 6
Several of these initiatives will take significant time and effort time to implement, with some
requiring competitive procurement, etc. For budget purposes, we have assumed full
implementation by mid fiscal year, however, it is my intent to move as quickly as possible to
maximize the savings. Any savings beyond that budgeted will be used to reduce our use of
the FY 2008/09 year-end surplus set-aside as described below.
ANNUAL IMPACT OF CONCEPTUAL
"PLAN B" REDUCTIONS - CWA ONLY Year 1
WHERE POSSIBLE, CONSIDER
Annual
Annual Impact
Assuming
PRIVATIZING/OUTSOURCING, SCALING Impact- Impact- Fulllmpte-
BACK FULL-TIME TO PART-TIME, ETC. Including Excluding mentatlon by Full Part
SEE EXAMPLES BELOW: Pension Pension 3131/11 Tlme Tlme
GENERAL FUND
Example: convert 20 out of 48 full-time lifeguards to
rt time, with no reduction in coves e $ (303,701) $ (184,088) $ (92,044 20.0 40.0
Example: convert full-time pool guards t0 part time
with no reduction in service level -reducing 18 FT
guards to PT, bringing the PT year round and
seasonal guards hours up, to provide the same
service levels we are currentry providing. The hours
worked vary depending on the time of the year from
20 hours for everyone during the winter (Nov. -Feb.)
en we are dosed at one pool a day per week to 40
hours per guard in the summer (May -August). The
other months (March, April and September, October)
will vary as the weather changes and the pools
demands increase or decrease. $ (310,812) $ (112,594) $ (56,297) 18.0 16.0
F~cample: Convert staffing from25 full-time and 3 part-
time code enforcement positions to 19 full-time and
14 part-time, providing more effident coverage on
weekends and nights g (88,221) $ (53,769) $ (26,884 6.0 11.0
Example: Outsource Code Enforcement call center
operations with privatized in-house support -Assume
implementation of CaII Center October 2010 and
rivatized in-house su rt March 2011 $ (54,105) $ (23,669) $ (11,835) 5.0
Example: Outsource Building PermR Clerks as
recommended by the Watson Rice study (previously
proposed in FY 2009/10 Budget) -Assume award by
January 2011 and full implementation by March 2011 $ (105,411) $ (69,683) $ (34,842) (7.0)
Total General Fund $ {882,050) $ (443,803) $ {221,901) (54.0) 87.0
INTERNAL SERVICE FUNDS
Example: Eliminate CWA positions in Property
Management and replace with contract for
approximately $1,000,000 to provide response as
needed $ (435,233) $ (278,607) $ (138,304) (22.0)
General Fund Estimated tmpad: from Internal Service Fund $ (82,982)
Total General Fund Impact $ (304,883)
ENTERPRISE FUNDS
Example: Outsource Parking Enforcement. Estimated
savings of $1,200,000 in recurring costs inducting
pension -year 1 cost savings of $1,000,000 are net of
pension savings $ (1,031,565) $ (823,278) $ (411,640) (33.0) (14.0)
CITY CENTER - PROPERTY
MANAGEMENT
Example: Outsource Lincoln Road Property
Management $ (93,908) $ (60,800) $ {30,400) (4.0)
GRANDTOTAL $ (2,422,756) $ {1,604,489) $ (802,244) (113.0) 53.0
Adopting Tentative Budgets
September 15, 2010
Page 7
It is important to note, that the initiatives described in the prior table are conceptual, and it is
my intent to maximize savings from this approach. The proposed budget incorporates the
reduction of an additional 76 full-time positions from these initiatives (offset by the addition of
67 part-time positions) in the General and Internal Service Funds. However, the actual
number of positions impacted could differ from those presented above.
Use of One-Time Revenues
The City's policy regarding use of one-time revenues states that "The City of Miami Beach
will use one time, non-recurring revenue for capital expenditures or one time expenditures
and not subsidize recurring personnel, operations, and maintenance cost".
Recognizing that FY 2010/11 would be a very challenging budget year, at the end of FY
2008/09, year-end surplus (revenues in excess of expenditures) in the amount of $3.657
million were set aside for use in balancing the FY 2010/11 budget as needed. Given the
City's policy regarding the use of one-time revenues such as the FY 2008/09 year-end
surplus, the City Commission directed staff to identify one-time expenditures in the FY
2010/11 budget that these funds could be used for. However, the nature of expenses in the
General Fund operating budget are such that, while the specific line items may be unique to
that fiscal year, the level of funding required for that line item is generally a recurring
expense (e.g. capital investment upkeep used to maintain our landscaping, uplighting etc.,
information and communications technology funding, funding for facility renewal and
replacement projects, etc.).
As a result, it is recommended that the Commission waive this policy for this one-time use of
the FY 2008/09 year-end surplus. While this is generally not a recommended financial
practice, it is being recommended at this time only because of the unusual extent of the FY
2010/11 projected budget gap. Please note that this recommendation is made cautiously. It
is my intention to expend these dollars last during the fiscal year, so that if any savings are
achieved throughout the year, the amount of funds needed from this source will be reduced,
in which event the funds will be available to be used in subsequent fiscal years. If the use of
the FY 2008/09 surplus can be spread over several years, while not providing a recurring
funding source, it will at least provide. amulti-year funding source.
Service Enhancements
Despite the challenges faced with the FY 2010/11 budget, there were a few areas where
services are recommended to be enhanced. Ensuring compliance with code regulations
throughout the City was further emphasized as a priority during this fiscal year, especially
with regard to quality of life issues on weekends, including beach litter during spring break,
noise during special events, etc. I am proposing adding nine part time code enforcement
officers to support these efforts, similar to the level of effort we deployed earlier this year. In
addition, the proposed General Fund budget includes funding for a lobbyist to assist with
issues related with Miami-Dade County. The General `Fund proposed budget also
incorporates the addition of an Engineering Manager position to oversee design process in
the Public Works Department, however, the cost of this position is offset by charges to
capital projects.
Adopting Tentative Budgets
September 15, 2010
Page 8
ENTERPRISE FUND BUDGETS
We are pleased to be able to provide relief in one area where fee increases had been
previously programmed, with a result that will provide a net benefit for our taxpayers. In the
enterprise fund budget, I am recommending no increases in water, sewer and stormwater
fees and, in fact, a decrease in household sanitation fees.
During the FY 2009/10 budget development process, we had initially forecast that water,
sewer and stormwater fees would need to increase by $0.33 per thousand gallons, $0.45
per thousand gallons and $1.27 per month, respectively for FY 2010/11. The combined
monthly impact of these then-proposed fee increases for an average household user of
11,000 gallons would have been approximately $9.85 per month, or $118.20 per year.
However, due to lower operating costs than previously projected, in part due to the
"employee give-backs,° as well as the use of rate stabilization funds from prior years, I do not
see a need to recommend any increases in these rates for FY 2010/11. Further, in the
Sanitation Fund, I am recommending decreasing the household fee by $1.58 per month
(almost $20 per year) by passing through the savings from the new residential waste
collection contract to our users.
In short, the combined impact from the reduction in the household sanitation fee, and the
cost avoidance from not raising the water, sewer and stormwater fees as previously
programmed, represents a combined household reduction of almost $140 per year from our
projections a year ago. This reduction is significantly more than fhe $74 impact of the
proposed increase of 0.56 mills on the median household with a taxable value of
$133,000 in 2009, and almost offsets the impact of the mill adjustment for the average
household (assuming the 2009 average taxable value with no declines in taxable value).
In terms of parking rates, the proposed rates submitted for your consideration reflect the
recommendations approved during the August 25, 2010 Finance and Citywide Projects
Committee meeting. As you may recall, these recommendations include increasing hours of
enforcement in South Beach until Sam; increasing meter parking rates (other than for I-Park
device users who are residents) from $1.25 per hour to $1.50 per hour; and increasing hotel
hang tag rates from $6 per tag to $10 per tag. As we discussed, to the extent that the
increased parking revenues result in additional revenues in excess of expenditures at the
end of FY 2010/11, these funds will be used to offset the $3.6 million transfer from the
Parking Operating Fund to the General Fund in FY 2010/11.
The Enterprise Funds budgets include a minor reduction through efficiencies, including a
reduction of 4 full-time positions offset by the addition of 4 part-time positions. These savings
also are offset by $235,000 from four positions transferred from the General Fund to the
Water and Sewer Funds. Additional details are contained in Exhibits A and B attached. In
the Parking Fund, the proposed budget also incorporates the reduction of an additional 33
full-time positions and 14 part-time positions from outsourcing Parking enforcement as
shown on page 6, with an anticipated savings of $400,000 in the first year, and annually
recurring savings of over $1 million. However, the actual number of positions impacted
could differ from those presented above. The Water, Sewer and stormwater Funds also
reflect the impact of an additional Information Technology position.
Adopting Tentative Budgets
September 15, 2010
Page 9
CONCLUSION
In summary, the proposed FY 2010/11 General Fund operating budget maintains current
service priorities for the community, despite property tax rates set at 1.2 mills (16 percent)
lower than FY 2006/07 when property values were similar to the 2010 certified values.
Further, 1 am also recommending maintaining water, sewer, and stormwater rates and
reducing household sanitation fees, resulting in a combined household reduction of almost
$140 per household per year from our projections a year ago.
The Administration recommends adoption of the attached Resolution which establishes
tentative budgets for General, G.O. Debt Service, RDA Ad Valorem Taxes, Enterprise, and
Internal Service Funds for FY 2010/11, subject to a second public hearing scheduled on
Monday, September 20, 2010 at 5:01 P.M.
Attachment
JMG:KGB:JC
The Budget IVlessage referenced in this
memorandum will be distributed via
Supplemental Material
RESOLUTION TO BE SUBMITTED
__.
,.......
MIgM1B .._ ..
^~®~ cE ®F •~~an~~~A~~
NOTICE tS ®F ~l >t~~~~ ~ _" •~/~
Chambe COmm~Rs~o r given that...~J C.r ~~p ~B~
Florida, on. 3rC floor, Cif the City oAfublic hearin /"~ ~~'
THE p'm• Wednestlay a lembe00~ ~pnv~e ~o hs Fj Ada Held by the M
FIRST .2010 Center Driv the Co aYor
BEgCH UDG~ ~loR FfS gING gDOPT1N to Consider he fo~~vavmgBsa hn
5:02p,m ~ YEAR 201o20~E F~OPOSED MI
GET HEA
SCAB GOVERN R F1SCq~l YG ADOpTIN~ R T HE CITY OF MIgME
In9uiries MEIVT NEIGHB R 2 poD01 T HER TOP
INTERESTED be tlirectetl to the t3uRH IMPFROVEME NORMgND~GE RgTE.'
S
by an agent, PARTIES are invR tlget Offic NT DISTRI~. HORES
Hallhmission, °r to ed to appear eat (305) 673-75.10. .
Aubli Miami Beachthe City Cele their vie WS . at this m
Converrtiopectiona nn9no33139.tCOpCOnventionitC9 atl ~~~ repreSentea
Thise Watin may b~rive. 1stnFjoousinessshou~seSe °^te-ninanDrive, tst ~ooe City
notic ~ Hue a City H in th
- oultl not Pro idetl, tl nd untler such tl MiamC sa~em's woe b1 ~~
Pumuant City of E. P~ Q C1fcumstances atltlitlona13139~
!f a Pe~onP Section 286 Miami Beach tY Cleryc e8al
de .O7
e~~~ to any mattero app a5 nla. Star ; the. C. '
doese~tmOnY andatim records°~ a ~~ m°~nrmade b ~by atlvises the.
othe noC,constnutevitlenceu theproceedin8orrtshea CifyCO/r,,,t?ublicthat:
or noise inad a °pnsent POn t'"hich th n9s is rrlatle tln9, such issi6n with
appeals not o ~~ibfe of 1 by the Ci s appeal Is ~^'hich re°Persbn mu
TO ~ - thervylse alto event evitle for the Intro to be based,°fU inclutles
tofu aW~Y Coc ess forlpem ~ ssib e. f oe nor tl°~ ,i au home chi nnt(°f
acts
contact. (805) B °rnem or °ns wit °rrn 8es
initiate ~ 489 participate h disabilities, sign langua
Your
_ Atl f/g1B ra9u . • iTY(users)rnaDa~ o7c ~ ~te's~s ~~ da~eed 9 p~ t~n~
~ ... ..'t (Flontla Relay Servlce)enc~°
~HURSpgy gU~UST °fJ~~