LTC 224-2012 Explanation for any Increases in General Fund ® MIAMI BEACH
OFFICE OF THE CITY MANAGER c7
NO. LTC #' 224 -2012 LETTER TO COMMISSnT
rCl
TO: Mayor Matti Herrera Bower and Members of the City Commission = ;'
FROM: Kathie G. Brooks, Interim City Manager
DATE: August 28, 2012
SUBJECT: EXPLANATION FOR ANY INCREASES IN FY 2012/13 GENERAL FUND
INDIVIDUAL DEPARTMENT BUDGETS IN EXCESS OF 2 PERCENT MORE
THAN THE FY 2011/12 BUDGET
The purpose of this LTC is to provide information on General Fund Current Service Level
(CSL) department budget increases for FY 2012/13. In prior years the threshold was a 2%
increase and for this analysis the same amount has been used. The comparison between
FY 2012/13 CSL and the FY 2011/12 adopted budget is net of increases from pension
reallocations and internal service increases.
Background
At the time of the July 25` Finance and Citywide Projects Committee Meeting (FCWPC), the
City's General Fund CSL budget was estimated at $253.8 million, an increase of $9.5
million of which $6.1 million was an increase in pension costs and $3.2 million was the
increase in internal service costs. Net of increases in pension and internal services, the
increase was $2.2 million or less than 1 %.
Analysis
Attachment A shows the latest estimate of CSL budgets for each general fund department
prior to the adjustments for changes in pension contributions, internal service fund
departments charge back allocations and transfers.
As explained in the proposed operating millage agenda item presented, to the Commission
on July 18, 2012, a significant component of the increase for all departments is' due to
previously bargained salary adjustments for employees, including the impact of step
increases for employees in the Fraternal Order of Police (FOP) and International Association
of Fire Fighters (IAFF) bargaining units; a maximum of 2 percent performance -based merit
increase for employees in the Government Supervisor's Association (GSA) bargaining unit;
and a maximum of 2 percent performance -based merit increase for employees in the
American Federation of State, County and Municipal Employees bargaining unit (AFSCME)
as of May, 2012. The ' CSL budget also assumes a 2 percent performance -based merit
increase for unclassified and other employees consistent with past practice of treating all
employees equally. However, the CSL budget assumes no merit increases for the
Communications Workers of America (CWA) bargaining unit based on the status quo for the
existing contract. Further, the salary projections also include the full year's impact of the cost
of living adjustment (COLA), implemented in April 2012 for all salary groups.
Health insurance costs also are projected to increase across virtually all departments, but
most particularly Police and Fire, based on an estimated 10 percent increase over the
current Fiscal Year, as well as the expiration of the FOP and IAFF additional 5 percent
Explanation for any increases in FY 2012/13 General Fund Individual Department
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 2
contribution to City health insurance costs. This additional 5 percent contribution by FOP
and IAFF members was for an 18 month period which expired in February, 2012 and
January, 2012, respectively.
As shown in Attachment A, Office of the Mayor and Commiss on, City Manager's Office,
Procurement, Real Estate Housing and Community Development, Planning, Code
Compliance, and Tourism and Cultural Development have FY 2012/13 CSL budgets equal
to or more than two percent in excess of FY 2011/12 adopted budgets, prior to adjustments
for changes in pension 'contributions to the City's pension plans, internal service fund
departments charge back allocations and transfers. The explanation of the increases for
these departments is provided in the respective tables on the following pages..Variances for
Police and Fire are also provided, although less than 2 %, as they are greater than $300,000.
NOTE: Salaries and Benefits presented in the departmental tables shown below include.
the impact of 5 percent step increases for eligible FOP and IAFF employees; a maximum
of 2 percent performance -based merit increase for eligible employees in the GSA and
AFSCME bargaining unit and for unclassified and other, as well as health insurance
costs increases as noted above.
1. Mayor and Commission
CSL Budget Prior to
Pension and Internal
Service Fund Increase
Adopted Budget Allocations Variance
FY 2011/12 FY 2012/13 Over /(Under)
Expenditures $ 1,583,448 $ 1,620,000 $ 36,552
2.3%
Components
Salaries- increase due to 2% merit plus 3% Cost of Living adjustment
during FY2011/12 as of pay period ending April 22, 2012 $ 17,684
Heath insurance - increase due to projected 10% increase and plan
changes for several individuals. 18,211
Other Personnel Costs - Medicare 266
Other Operating Expenditures 391
Net $ 36,552
Explanation for any increases in FY 2012/13 General Fund Individual Department
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 3
2. City Manager
CSL Budget Prior to
Pension and Internal
Service Fund
Adopted Budget Increase Allocations Variance
FY 2011/12 FY 2012/13 Over /(Under)
Expenditures $ 2,335,776 $ 2,387,000 $ 51,224
2.2%
Components
Salaries- increase due to 2% merit plus 3% Cost of Living
adjustment during FY2011/12 as of pay period ending April 22,
2012 $ 37,583
Health Insurance - increase due to projected 10% increase 12,304
Other Personnel Costs - Medicare 674.
Other Operating Expenditures 663
Net $ 51,224
Explanation for any increases in FY 2012/13 General Fund Individual Department
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 4
3. Procurement
CSL Budget Prior to
Pension and Internal
Service Fund Increase
Adopted Budget Allocations Variance
FY 2011/12 FY 2012/13 Over /(Under)
Expenditures $ 962,664 $ 1,022,000 $ 59,336
6.2%
Components
Salaries- increase due to 2% merit plus 3% Cost of Living adjustment
during FY2011/12 as of pay period ending April 22, 2012 $ 44,492
Health Insurance - increase due to projected 10% increase $ 18,814
Other Personnel Costs - decrease for 401 K contribution for employee
which was still on the plan and is no longer with City offset by
increases in Medicare and FICA consistent with salary increases $ (8,269)
Telephone - for increase in conference calls with vendors $ 1,763
Rent & Building Equipment - for decrease of copier contract $ (939)
Dues & Memberships and Travel - increase for required certifications
and training for additional employees pursuing certification $ 3,475
Net $ 59,336
Explanation for any increases in FY 2012/13 General Fund Individual Department
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 5 t
4. Real Estate, Housing and Community Development
CSL Budget Prior to $'
Pension and Internal
Service Fund Increase
Adopted Budget Allocations Variance
FY 201"1/12 FY 2012/13 Over /(Under)
Expenditures $ 2,171,769 $ 2,374,000 $ 202,231
9.3%
Components
Salaries - increase due to 2% merit plus 3% Cost of Living
adjustment during FY2011/12 as of pay period ending April 22, 2012
and due to decrease in available grant funding $ 181,228
Health Insurance - increase due to projected 10% increase offset by
an adjustment due to decrease in salary grant funding. 11,777
Other Personnel Costs - Medicare and OPEB contribution increases
increase in allowances due to decrease in grant funding for salaries. 93
Other Contractual Services , Salvation Army Contracted Emergency
Shelter cost increase. 20,436
Operating Expenditures (11,303)
Net $ 202,231
Explanation for any increases in FY 2012/13 General Fund Individual Department
Budgets in Excess of 2 Percent more the FY 2011/12 Adopted Budget
Page 6
f
5.: Planning
CSL Budget Prior to
Pension and Internal
Service Fund Increase
Adopted Budget Allocations Variance
FY 2011/12 FY 2012/13 Over /(Under)
Expenditures $ 3,187,333 $ 3,366,000 $ 178,667
5.6%
Components
Salaries - increase due to 2% merit plus 3% Cost of Living
adjustment during FY2011/12 as of pay period ending April 22, 2012,
and includes salary for Planning Director frozen in FY 2011/12 $ 187,546
Health Insurance - increase due to projected 10% increase $ 25,153
Other Personnel Costs $ (8,567)
Temporary Labor - decrease as result of completed digital archiving
of records until project is complete (18,000)
Other Operating Expenditures (7,465)
Net $ 178,667
E
Explanation for any increases in FY 2012/13 General Fund Individual Department .
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 7 J
6. Tourism and Cultural Development
CSL Budget Prior to
Pension and Internal
Service Fund Increase
Adopted Budget* Allocations Variance
FY 2011/12 FY 2012/13 Over /(Under)
Expenditures $ 2 $ 2,511,000 $ 84,075
3.5%
Components
Salaries - increase due to 2% merit plus 3% Cost of Living
adjustment during FY2011/12 as of pay period ending April 22, 2012,
and includes salary for Planning Director frozen in FY 2011/12 51,249
Health Insurance - increase due to projected 10% increase 2,837
Other Personnel cost - increases allowances, social security
Medicare, consistent with increases in salaries 13,888
Other Operating - includes decrease for copier contract and
increases in travel and Colony Theater operating expenses 18,840
Professional Services - increase results from moving Bass Museum
expenses, previously budgeted in salaries and operating to
Professional Services consistent with Management Contract 490,658
All Other - Decreases due to moving Bass Museum expenses to
Professional Services resulting in a net decrease of $2,739 in the
Bass Museum (493,397)
Net $ 84,075
Explanation for any increases in FY 2012/13 General Fund Individual Department
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 8
7. Code Compliance
CSL Budget Prior to
Pension and Internal
Service Fund Increase
Adopted Budget Allocations Variance
FY 2011/12 FY 2012/13 Over /(Under)
Expenditures $ 4,355,491 $ 4,454,000 $ 98,509
2.3%
Components
Salaries - increase of 2% merits plus 3% Cost of Living adjustment
during FY 2011/12 as of pay period ending April 22, 2012 including
increased use of part- timers to reduce overtime. $ 53,639
Overtime - increase of overtime to offset vacancies in department 50,193
Health Insurance- decrease as result of change of plan by employees
offset by increase due to projected 10% increase (12,408)
Other Personnel Costs - allowances, work above class, social
security, FICA 8,586
Uniforms 2,712
Other Operating Expenditures (4,213)
Net $ 98,509
Explanation for any increases in FY 2012/13 General Fund Individual Department
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 9
.8. Police
CSL Budget Prior to
Pension and Internal
Service Fund Increase
Adopted Budget Allocations Variance
FY 2011/12 FY 2012/13 Over /(Under)
Expenditures $ 91,992,541 $ 93,088,000 $ 1,095,459
1.2%
Components
Salaries - increase due to 2% merit or 5% step on anniversary
(except for CWA employees), plus 3% Cost of Living adjustment
during FY2011/12 as of pay period ending April 22, 2012 229,947.00
Health Insurance- increase due to projected 10% increase - 253,867.00
Health Insurance - increase due the expiration in February, 2012 of the
5% contribution to offset City costs 712,298.00
Other Personnel Costs - shift differential, uniforms, holiday pay (128,481.00)
Other Operating Expenses (28,452.00)
Capital Expenses - .Mainly replacement firearms, veripic photo storage
& retrieval system due to expanding database & citation mag strip_
readers to replace hand held units at end of life 56,280.00
Net $ 1,095,459
Explanation for any increases in FY 2012/13 General Fund Individual Department
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 10
9. Fire
CSL Budget Prior to
Pension and Internal
Service Fund Increase
Adopted Budget Allocations Variance
FY 2011 /12 FY 2012/13 Over /(Under)
Expenditures $ 58,942,391 $ 59,866,000 $ 923,609
1.6%
Components
Salaries - increase due to 2% merit or 5% step on anniversary (except for
CWA employees) , plus 3% Cost of Living adjustment during FY2011/12
as of pay period ending April 22, 2012 $ 548,223
Overtime - Increase based on a trend analysis using actual data from
FY11 and the first 6 months of FY12, but less than prior years. 267,466
Uniforms - Purchase of radio holsters, new uniforms and uniform brass
due to staff turnover.. 45,564
Allowances - Increase principally due to recertification pay for Fire
Suppression division, which is paid every other year. 53,242
Health Insurance - less than projected 10% increase due to FY 2011/12
actuals lower than budget. 1,845
Health Insurance - increase due to the expiration in January, 2012 of 5%
contribution to offset City costs 323,161
Holiday Pay - Reduction from prior years due to contract change' - (114,124)
Professional Services - Promotional testing for Captains and Lieutenants
eliminated given promotions that occurred due to reorganization and
decreased new equipment needs at EOC. (97,423)
Rent Building & Equipment - Decrease due to move to completed fire
station. (76,212)
Other Operating Expenses 2,154
Capital - purchase of one, additional LP -15 monitor defibrillator for use as
a Fire Rescue reserve unit and for the frequent large scale events
requiring additional EMS units to be placed in service moved from 12/13
to 2011/12 FY. 30,287
Net $ 923,609
Explanation for any increases in FY 2012/13 General Fund Individual Department.
Budgets in Excess of 2 Percent more than the FY 2011/12 Adopted Budget
Page 11
CONCLUSION
As can be seen from the department variance details presented here, and as explained in
the proposed operating millage agenda item presented to the Commission on July 18
the most significant increases in the FY 2012/13 CSL budget, other than pension and
internal service charges, are due to the following:
Previously bargained salary adjustments for employees, including the impact of step
increases for employees in the Fraternal Order of Police (FOP) and International
Association of Fire. Fighters (IAFF) bargaining units; a maximum of 2 percent
performance -based merit increase for employees in the Government Supervisor's
Association (GSA) bargaining unit; and a maximum of 2 percent performance -based
merit increase for employees in the American Federation of State, County and Municipal
Employees bargaining unit (AFSCME) as of May, 2012. The CSL budget also assumes
a 2 percent performance -based merit increase for unclassified and other employees
consistent with past practice of treating all employees equally. However, the CSL budget
assumes no merit increases for the Communications Workers of America (CWA)
bargaining unit based on the status quo for the existing contract. Further, the salary
projections also include the full year's impact of the cost of living adjustment (COLA),
implemented in April 2012 for all salary groups.
Health insurance costs based on an estimated 10 percent increase over the current
Fiscal Year, as well as the expiration of the FOP and IAFF additional 5 percent
contribution to.City health insurance costs which was for an 18 month period, which
expired in February, 2012 and January, 2012, respectively. The 2 percent contribution
from command staff remains in effect.
It should be noted that in some departments, operating expenses are going down as a result
of continued efforts by administration to reduce cost.
Attachment
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