2013-28294 Reso RESOLUTION NO. 2013-28294
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, SETTING THE
PROPOSED MILLAGE RATES FOR FISCAL YEAR (FY)
2013/149 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 MIAMI-DADE
COUNTY PROPERTY APPRAISER IN THE FORM
REQUIRED BY SECTION 200.065, FLORIDA STATUTES
WHEREAS, Section 200.065, Florida Statutes, has specified the method by which
municipalities may fix the millage rate and adopt an annual budget; and
WHEREAS,development of the FY 2013/14 budget began early in the year and has
included discussions with the Commission that included a review of priorities, economic
u p ,
projections and their impacts on the budget, preliminary projected revenues and
expenditures; and
WHEREAS, 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 and providing structural
changes that enhanced capital funding and reserve; and
WHEREAS, maintaining and enhancing the City's priorities have become
increasingly more challenging in the last six years: first through property tax reform where
tax rates were dramatically reduced; and subsequently with the decline in property as well
as increasing pension costs; and
WHEREAS, the July 1, 2013 Certification of Taxable Value from the Miami-Dade
County Property Appraiser reflects a 6.9 percent increase in Citywide property tax values
from the July 1, 2012 tax roll certification, a 7.3 percent increase in the City Center
Redevelopment area (RDA), and a 6.8 percent increase in values outside the City Center
RDA, which impacts the City's General Fund revenues; and
WHEREAS, in the last six years, the General Fund has absorbed $43 million in
reductions (and more than $50 million citywide and 271 positions across all funds) in a
General Fund budget that is$256.3 million in FY 2012/13,which is only 8% more than the
FY 2006/07 budget, despite pension contribution increases of$29 million over the same
period; and
WHEREAS, a total of approximately $20 million in employee "give-backs" were
achieved between FY 2009/10 and FY 2011/12, and an estimated$3.8 million in employee
"givebacks" where budgeted in the FY 2012/13 budget, which, along with more than $50
million in efficiencies and reductions, represents more than $73.9 million in combined
"givebacks" and reductions over 6 years; and
WHEREAS, between FY 1999/00 and FY 2011/12,the total combined City of Miami
Beach property tax rates declined approximately 2.24 mills and in FY 2007/08 alone, the
property tax rate declined by approximately 1.8 mills, with annual savings to the average
homesteaded property of over$400, in addition to City funded $200 and $300 homeowner
dividends paid to homesteaded property owners in the City in FY 2005/06 and FY 2006/07;
and
WHEREAS, at the July 8th 2013 Finance and Citywide Projects(FCWPC)meeting
the consensus was to set the proposed operating millage in July at the rate of the millage
rate of 6.0909 which is the same as the FY 2012/13 rate; and
WHEREAS, the City of Miami Beach is required to advise the Miami-Dade County
Property Appraiser of the Proposed Millage Rates, the "Rolled-Back" Rate, and the date,
time, and place of the first public hearing; and
WHEREAS,the January 1, 2012 tax roll declined by $1.1 billion between the July 1,
2012 valuation and the July 1, 2013 valuation due to appeals, adjustments, etc. , which is
part of the reason the FY 2013/14 "roll-back rate" is 0.58 mills lower than the FY 2012/13
current millage rate; and
NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the following
recommendations of the Administration be and are hereby ratified for transmittal to the
Miami- Dade County Property Appraiser, as specified in Section 200.065, Florida Statutes:
1) Proposed Millage Rates for FY 2013/14
General Operating 5.7826 mills
Capital Renewal & Replacement 0.1083 mills
Total Operating Millage 5.8909 mills
Debt Service 0.2529 mills
Total Combined Millage 6.1438 mills
2) "Rolled-Back" Rate 5.5158 mills
3) The first public hearing on the proposed millage rate and the tentative budget for FY
2013/14 shall be held on Wednesday, September 11, 2013 at 5:01 P.M., in the City
Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach,
Florida.
PASSED and ADOPTED, this 194h day of Jam, 2013.
,�y '. i Edward L. Tobin
Vice -Mayor
g ,z r INCOr ?p.
OVA 1 -ED:
CITY CLERK *=�'• f �,� a
' '�� • e .......N '��}, if �',
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
4 fty qAttor(', Date
COMMISSION ITEM SUMMARY
Condensed Title:
RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA SETTING
THE PROPOSED OPERATING MILLAGE RATE; 2)THE REQUIRED DEBT SERVICE MILLAGE RATE; 3)THE
CALCULATED"ROLLED-BACK" RATE;AND,4)THE DATE,TIME,AND PLACE OF THE FIRST PUBLIC HEARING
O CONSIDER THE MILLAGE RATES AND BUDGETS FOR FISCAL YEAR (FY) 2013/14; FURTHER
UTHORIZING THE CITY MANAGER TO TRANSMIT THIS INFORMATION TO THE MIAMI-DADE COUNTY
ROPERTY APPRAISER IN THE FORM REQUIRED BY SECTION 200.065, FLORIDA STATUTES
Key Intended Outcome Supported:
Ensure expenditure trends are sustainable over the long term; Control costs of payroll including salary and fringes;
Minimize taxes; Improve the City's overall financial health and maintain overall bond rating
Supporting Data(Surveys, Environmental Scan, etc.):
Over the last several years,the City of Miami Beach has adopted budgets that provided tax and fee relief while the
providing improved services that address needs and priorities identified by the community and enhancing capital
funding and reserves. However,these objectives became increasingly challenging in the last six years:first through
property tax reform where tax rates were dramatically reduced; and subsequently with the decline in property values
as well as increasing pension costs. In the last six years, the General Fund has absorbed more than $43 million in
reductions(and more than$50 million city-wide and 271 positions across all funds)in a General Fund budget that is
$256.3 million in FY 2012/13, which is only 8% more than the FY 2006/07 budget, despite pension contribution
increases of $29 million over the same period. Further, a total of approximately $20 million in employee "give-
backs"were achieved between FY 2009/10 and FY 2011/12. The FY 2012/13 budget included an estimated $3.8
million in employee "give-backs." Along with more than $50 million in reductions, this represents almost $73.9
million in combined "_givebacks"and reductions over 6 years. Some of the savings budgeted in FY 2012/13
have not yet been achieved, as administration is still in the process of negotiations with the bargaining units.
In FY 2010/11 the city's approach to addressing the then deficit of$32 million included a distribution of the shortfall
between taxpayers and employees. Taxpayers had their tax rate increased from 5.6555 to 6.2155, an increase of
0.56 mills. The goal of the Commission has been to bring them back to that level as property values increase over
time. It should be remembered that between FY 2009/10 and FY 2010/11 values declined by$2.6 billion driving the
need for an increase in the millage. FY 2013/14 values are still short of FY2009/10 values by$2.2 million.As values
increase in the future, this will provide the opportunity for further reductions in the millage. In FY2011/12 the City
took its first step in that direction with a reduction in the millage rate of 0.05 mills. The millage rate for FY2012/13
reduced the operating millage by an additional 0.0746 mills and a total reduction of 0.1062 mills including the
reduction in debt service millage. A total of 0.1246 mills in operating millage was reduced between FY 2010/11 and
the adopted FY 2012/13 millage. Over two years,this reduction represents 22% of the goal to get back to a millage
rate of 5.6555. The remaining goal for millage reduction is 0.4354.
Item Summa /Recommendation:
The total proposed operating millage is 6.0909 mills, including a general operating millage rate of 5.9826 and a
apital Renewal and Replacement millage of 0.1083. The proposed voted debt service millage rate is reduced from
2568 to 0.2529. The budget development process is still underway, and the City's Proposed Work Plan and
Budget will be released later this summer. However, at this point in time, the gap between current service level
evenues and expenditures is estimated at $4.9 million primarily due to previously bargained salary increases for
nion positions and continued increases in health and pension costs, offset by increased revenues. The Current
ervice Level(CSL)budget represents the cost of providing the same level of service as in the prior fiscal year.
Advisory Board Recommendation:
CWPC July 8th, 2013
Financial Information:
Source of Funds: Amount Account
1
OBPI Total
Financial Impact Summary The July 1, 2013 Certification of Taxable Value from the Miami-Dade County
Property Appraiser reflects a 6.9 percent increase in Citywide property tax values from the July 1, 2012 tax roll
certification. Given that the City Center RDA had a 7.3 percent increase,the increase outside the City Center RDA,
which impacts the City's General Fund revenues, was 6.8 percent. The proposed millage for the FY 2013/14
budget, which is the same as last year, results in increased property tax revenues in the General Fund of $7.6
million.
City Clerk's Office Legislative Tracking:
Sign-Offs:
Rep m nt irector Assistant it anager gly,Manager
A -t! DA ITEM R7A
MIAMIBEACH
DATE I-11-
13
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeachfi.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and embers the City Commission
FROM: Jimmy Morales, City Manage
DATE: July 17, 2013
SUBJECT: A RESOLUTION OF THEM YOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA S TTING 1) THE PROPOSED OPERATING MILLAGE
RATE; 2)THE REQUIRED DEBT SERVICE MILLAGE RATE; 3)THE CALCULATED
"ROLLED-BACK" RATE; AND, 4) THE DATE, TIME, AND PLACE OF THE FIRST
PUBLIC HEARING TO CONSIDER THE MILLAGE RATES AND BUDGETS FOR
FISCAL YEAR (FY) 2013/14; FURTHER AUTHORIZING THE CITY MANAGER TO
TRANSMIT THIS INFORMATION TO THE MIAMI-DADE COUNTY PROPERTY
APPRAISER IN THE FORM REQUIRED BY SECTION 200.065, FLORIDA
STATUTES.
ADMINISTRATION RECOMMENDATION
The Administration recommends that the Mayor and City Commission adopt the attached
resolution which authorizes the City Manager to transmit the following information to the Miami-
Dade County Property Appraiser:
1) Proposed Millage Rates for FY 2013/14:
General Operating 5.9826 mills
Capital Renewal & Replacement 0.1083 mills
Sub-Total Operating Millage 6.0909 mills (same as last year)
Voted Debt Service 0.2529 mills (0.0039 decrease from last year)
Total 6.3438 mills (0.0039 decrease from last year)
2) "Rolled-Back" Rate (Truth in Millage) 5.5158 mills
3) The first public hearing to consider the proposed millage rates and tentative budgets for FY
2013/14 shall be Wednesday, September 11, 2013 at 5:01 p.m., in the City Commission
Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida.
The"Rolled-Back" millage rate for FY 2013/14 is the millage rate required to produce the same
level of property tax revenues in the General Fund in FY 2013/14 as anticipated to be received
in FY 2012/13. It is important to note, that the January 1, 2012 tax roll Citywide declined by
almost$1.1 billion(4.6%)between the July 1, 2012 valuation and the July 1, 2013 valuation due
to appeals, adjustments, etc,which is part of the reason the FY 2013/14"roll-back rate" is 0.58
mills lower than the FY 2012/13 current millage rate and lower than it would be if the rollback
rate was only adjusted for the increase in revenues generated by higher property values. The
area outside of City Center RDA, which impacts General Fund revenues, declined in value by
approximately $0.8 billion during the same period of time.
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 2
The proposed millage provides funding to partially offset increases to the Current Service Level
Budget in employee costs such as 5%step increases for members not at the maximum of their
range in the FOP and IAFF bargaining units;a maximum of 2 percent performance-based merit
increase for other employees, higher overtime costs,a $5.5 million increase in pension costs,
and higher health care costs. Other increases include increases in operating costs and internal
service fund charge-backs. These increases are detailed in the "Initial General Fund Budget
Gap" section.
SUMMARY
In FY 2010/11 the city's approach to addressing the then deficit of $32 million included a
distribution of the shortfall between taxpayers and employees. Taxpayers had their tax rate
increased from 5.6555 to 6.2155, an increase of 0.56 mills. The goal of the Commission has
been to bring them back to that level as property values increase over time. It should be
remembered that between FY 2009/10 and FY 2010/11 values declined by$2.6 billion driving
the need for an increase in the millage. FY 2013/14 values are still short of FY 2009/10 values
by$2.2 million. As values approach FY 2009/10 values,through further increases in the future,
this will provide the opportunity for further reductions in the millage.
In FY 2011/12 the City took its first step in that direction with a reduction in the millage rate of
0.05 mills. The millage rate for FY 2012/13 reduced the operating millage by an additional
0.0746 mills and a total reduction of 0.1062 mills including the reduction in debt service millage
for a total of 0.1246 mills between FY 2010/11 and the adopted FY 2012/13 millage. Over two
years, this reduction represents 22 percent of the goal to get back to a millage rate of 5.6555.
The remaining goal for millage reduction is 0.4354.
The Administration is recommending a total combined millage rate for the City of Miami Beach of
6.0909. The total proposed operating millage has been kept flat and includes a general
operating millage rate of 5.9826 and a General Fund Capital Renewal and Replacement millage
of 0.1083. The proposed voted debt service millage rate is adjusted from 0.2568 to 0.2529, a
decrease of 0.0039 mills.
It is important to remember that in prior years,the City of Miami Beach significantly reduced tax
rates as property values increased. Between FY 1999/00 and FY 2009/10,total combined City
of Miami Beach property tax rates declined approximately 2.8 milt. In FY 2007/08 alone, the
millage rate declined by approximately 1.8 mills, with annual savings to the average
homesteaded property of over $400. Further, despite an adjustment of 0.56 mills in the
operating tax rate in FY 2010/11, City of Miami Beach proposed combined millage rates today
remain more than 2.3 mills lower than in FY 1999/00(25 percent), and approximately 1.3 mills
lower than 2006/07 when property values were similar to today's values.
The budget development process is still underway, and the City's Proposed Work Plan and
Budget will be released later this summer. However, at this point in time, the gap between
current service level revenues and expenditures is estimated at $4.9 million primarily due to
previously bargained salary increases for union positions and continued increases in health and
pension costs, offset by increased revenues. The Current Service Level (CSL) budget
represents the cost of providing the same level of service as in the prior fiscalyear.
Through refinements to revenue projections that typically occur over the summer, and use of
increased Resort Tax revenues which have been experienced during the current FY 2012/13
fiscal year,this gap is anticipated to be reduced by at least$2 million. Every million is equivalent
to approximately 0.05 mills.
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 3
BALANCING STRATEGIES
At the July 8th Finance and Citywide Projects Committee (FCWPC) meeting, the committee
gave direction to maintain the current tax rate for the preliminary millage, but directed the
administration over the summer to identify opportunities to potentially reduce the millage,as well
as offset increased funding for enhancements, as part of the process of balancing the budget.
As a result,efficiencies, employee givebacks and potential service reductions will be considered
in August prior to final budget adoption in September.
As with the preparation of budgets for the last four years,departments are continuing to analyze
and present their budgets from two perspectives: 1) a review for potential efficiencies,
reorganizations to reduce cost, etc. without impacting services; and 2) performing a modified
zero-based analysis of each department budget, identifying potential service reduction
alternatives versus core functions. For each of the potential service reductions, departments
provided the type of impact and the magnitude ofthe impact. Core functions were defined as
those functions which, if cut, render it impossible for the department to provide basic service at a
reasonable level. However, based on my review of department budgets to date, and given the
extensive reductions in recent years, I am not expecting to generate significant cost reductions
through efficiencies and service reductions.
One of the priorities for cost reduction categories under consideration is reform of the Fire and
Police pension plan.This has been a priority during ongoing labor negotiations and I am hopeful
that we will be able to incorporate significant reductions in the City's annual required contribution
for the FY 2013/14 budget.
In August, the FCWPC will meet on the 21 st and 22nd to review potential efficiencies, potential
service reductions and revenue enhancements, as well as finalize approaches to balance the
budget. The FY 2013/14 budget will be adopted in September,2013 after two budget hearings.
The budget development process is still underway and the City's Proposed Work Plan and
Budget will be released later this summer. However, at this point in time, the gap between
current service level revenues and expenditures is estimated at $4.9 million. Through
refinements to revenue projections that typically occur over the summer, and use of increased
Resort Tax revenues which have been experienced during the current FY 2012/13 fiscal year,
this gap is anticipated to be reduced by at least $2 million. Every million is equivalent to
approximately 0.05 mills.
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
enhance capital funding and reserves.
However, these objectives became increasingly more challenging in the last six 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 rats as well as increasing pension costs. In the lastsix years, the General Fund
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 4
has absorbed almost$43 million in reductions and reductions of approximately$50 million city-
wide and 271 positions across all funds.
Further, a total of approximately$20 million in employee"give-backs"were achieved between
FY 2009/10 and FY 2011/12,through a combination of freezing cost of living adjustments for all
employees for two and one-half years, elimination of merit increases for all employee except
members of the Fraternal Order of Police (FOP) and International Association of Firefighters)
IAFF, increased contribution to pension for all employees except members of FOP and IAFF,
pension plan changes for the Miami Beach Employees Retirement Plan, increased contributions
for take-home vehicles by FOP members for 18 months, reduced holiday pay for IAFF members,
and increased contributions to health insurance by members of the FOP and IAFF for 18
months. In addition, the FY 2012/13 budget included an estimated $3.8 million in employee
"give-backs." Along with more than $50 million in reductions, this represents almost$73.9
million in combined "givebacks"and reductions over 6 vears.
Some of the savings budgeted in FY 2012/13 have not yet been achieved, as administration is
still in the process of negotiations with the bargaining units.
FY 2012/13 Adopted 6-Year Total
General Fund $Impacts FT PT $Impacts FT PT
Public Safety ($136,000) 1.0 1.0 ($7,771,095) (68.0) 2.0
Operations (135,000) (3.0) (4.0) (5,940,867) (64.0) (27.0)
Administrative Support (189,000) (1.0) - (3,047,694) (33.9) 1.0
Econ&Cultural Dev - - - (1,193,426) (17.0) -
Citywide (152,000) - - (1,619,642) - -
Subtotal $ (612,000) (3.0) (3.0) $(19,572,724) (182.9) (24.0)
Transfers (320,000) - - (23,168,966) - -
Total General Fund Reductions $ (932,000) (3.0) (3.0) $(42,741,690) (182.9) (24.0)
Internal Service Funds - - - (3,498,225) (37.1) -
Enterprise Funds (196,000) (12.0) 8.0 (3,529,021) (51.0) 16.0
GRAND TOTAL REDUCTIONS $ (1,128,000) (15.0) 5.0 $(49,768,936) (271.0) (8.0)
Estimated Employee Givebacks ($3,781,000) (24,130,360) - -
GRAND TOTAL REDUCTIONS AND GIVERACKS*** $ (4,909,000) (15.0)1 5.0 1 $(73,899,296) (271.0) (8.0)
*Employee givebacks include $250,000 of no merit increases for the CWA bargaining unit
Although the economy has stabilized, the impact of the recent recession has impacted both
property tax revenues as well as pension costs for FY 2010/11, FY 2011/12, FY2012/13 and
likely further into the future. Therefore, the City's strategy continues to consider the long term
financial sustainability of the City. Beginning with the development of the FY 2009/10 budget, a
strategy was developed to address shorRerm, mid-term and long-term financial needs.
• Strategies to address short-term financial needs included ongoing efficiencies and wage
concessions by employees.
• Mid-term financial sustainability was addressed by pension concessions from current
employees in the Miami Beach Employees Retirement Plan
• Longer term financial sustainability is enhanced by the pension plan restructures that
have been put in place for new employees in the Miami Beach Employee Retirement
Plan. For example, for General Employees, the plan restructure proposed for new
employees is projected by the City's actuary to reduce the City's annual required
contribution by almost$1 million in FY 2012/13,with additional reductions annually as
the number of employees in the Miami Beach Employees Retirement Plan hired after
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 5
October 1, 2010 continues to increase. Further, as noted above, the City is in the
process of negotiating for pension reform in the Fire and Police Pension Plan.
All of the givebacks achieved to date, except the 18 month increased contribution to health by
FOP and IAFF and the increased contributions for take-home vehicles by FOP members for 18
months, represent ongoing, recurring savings to the City and the employee give-backs
contribute significantly towards the City's strategic goal(key intended outcome)to control payroll
costs.
INITIAL GENERAL FUND BUDGET GAP
On the revenue side for FY 2013/14, based on the July 1, 2013 Certification of Taxable Value
from the Miami-Dade County Property Appraiser,values of existing properties increased by 6.9
percent from the July 1, 2012 tax roll certification.
In total, revenues are expected to increase by $6.1 million for FY 2013/14 principally due to
increased property tax as a result of higher property values as wellas increased licenses and
permits revenue offset by decreases across a number of categories.
• Property taxes are projected to increase $7.6 million due to a 6.7 percent increase in
taxable values, once City Center Redevelopment Area (RDA) tax increment revenues
are excluded.
• Other taxes are anticipated to decrease due to declining trends in telephone utility tax
revenue (approximately $600,000) and lower than budgeted electric franchise fee
revenues in FY 2012/13. Declines in telephone tax revenues reflect a continuing trend
over the last few years; however, the decline in electrical revenues reflects a dip in
recent months of FY 2012/13 which will be examined further over the summer.
• Licenses and permits increased $2.4 million with the majority coming from increases in
Building Department revenues. Building revenues can only be used to offset Building
Department expenditures. Over the summer we will reconcile Building Department
related revenues versus expenditures which may or not be available to offset the
projected gap in the General Fund.
Budgeted fines & forfeits are decreasing 8.2 percent due to decreased County court
fines for traffic and parking based on prior year and year-to-date trends.
• Interest income is anticipated to decrease $0.5 million to reflect lower than budgeted
revenue in FY 2012/13.
• Rents and Leases are projected to be$0.55 million higher than the FY 2012/13 budget
due to increased market activity.
Resort tax revenues are shown as flat for the purposes of the Current Service Level budget
estimates. These revenues will be adjusted later in the summer to reflect increases in tourism
activity experienced during FY 2012/13. Resort tax revenue can be used to offset allowable
reimbursable expenses directly related to activities supporting tourism in the General Fund
Further, CSL revenues reflect the use of$2.7 million in prior year surplus specifically set aside
for this purpose and $0.8 million set aside to offset pension increases (a decline from the$3.4
million and $2.2 million, respectively,set aside for FY 2012/13), along with $7.2 million in prior
year Parking Fund operating surplus. Building Department reserves of $1.5 million are also
included.
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 6
On the expenditure side, CSL expenditures typically have increased between 6 percent and 8
percent annually due to salary and benefit increases and other normal cost of living adjustments.
However, FY 2013/14,expenditure increases are estimated to total approximately$11.0 million
(4.3 percent) increase in expenditures, similar to the FY 2012/13 CSL increase of 4.6 percent,
the majority of which is due to the following:
• A$2.6 million increase to reflect the impact of a 5 percent step increases for members
not at the maximum of their range in the FOP and IAFF bargaining units; and a
maximum of 2 percent performance-based merit increase for members of the
Government Supervisor's Association(GSA)bargaining unit,the American Federation of
State, County and Municipal Employees bargaining unit (AFSCME), Communications
Workers of America (CWA) bargaining unit, and unclassified employees. These
increases are status quo contract increases,except for CWA members and unclassified
employees whose merits have been frozen for the last 3 and 4 years, respectively.There
is no Cost of Living Adjustment (COLA) included for any employees.
• A $0.8 million increase primarily due to Police Department overtime costs increasing
$660,000 over the FY 2012/13 budget amount that anticipated aggressive savings in
overtime, to actual needs.
• A $5.5 million increase in pension costs, which includes an increase of$2.2 million in
Fire and Police and $3.3 million in the General Fund share of the $5 million increase
Miami Beach Employee Retirement Plan (MBERP)annual required contributions.
• A $0.2 million increase in health care costs, which reflects a 10 percent increase over
projected FY 2012/13 health care costs, which are lower than theFY 2012/13 budget.
The FY 2012/13 experience is determined by actuarial assumptions based on the claims
expenses.
• A $0.9 million increase in operating costs, a 3.5 percent increase from FY 2012/13
budget. The increases were driven primarily by increases in contract maintenance due
to contractual cost escalations, other operating expenses in the Fire Department for
higher costs related to changes in industry standards regarding packaging of
medications, and increases of$125,000 in legal fees for outside counsel for collective
potential ongoing increased level of collective bargaining/union negotiations.
• A$1.8 million increase in Internal Service Fund charge-backs to Departments primarily
due to similar increases in salary and pension costs as described above that are then
charged back to the General Fund, as well as equivalent increases in health insurance
costs for retirees, and increases in debt service for fleet vehicles. It is important to note
that fuel prices in FY 2013/14 are budgeted at current prices. Should prices increase
further, the General Fund will need to fund these increases.
• A$0.8 million decrease due to the elimination of setting funds aside for future pension
increases.
The resulting gap between General Fund CSL expenditures and CSL revenues as of the July 1,
2013 Certified values is approximately$4.9 million. Attachment 1 summarizes the revenues
and expenditures.
I
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 7
DECISION-MAKING PROCESS
Development of the FY 2013/14 budget began early in the calendar year with budget staff and
departments working together to prepare their current service level budgets. In July with two
budget briefings held with the Finance &City-wide Projects Committee(FCWPC). On July 8th
the FCWPC reviewed the Current Service Level budget, which reflects budget increases or
decreases necessary to provide the same level of services in the coming year. On July 10th,the
FCWPC reviewed the proposed Capital Improvement Program, which details all of the City's
capital projects over the next five years. In August,the FCWPC will meet on the 21 st and 22nd
to review potential efficiencies, potential service reductions and revenue enhancements,as well
as finalize approaches to balance the budget. The FY 2013/14 Proposed Work Plan and
Budget will continue our focus on providing "value of services for tax dollars paid" and will be
adopted in September, 2013 after two budget hearings
STATUTORY REQUIREMENTS
FS 200.065,entitled"Method of Fixing Millage"establishes specific guidelines that must be used
by all local government entities insetting 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,
2011),to advise the Miami-Dade County Property Appraiser of the proposed general operating
millage rate, the calculated "rolled-back" rate and the date, time, and place of the first public
hearing to consider the proposed millage rates and tentative budgets for FY 2013/14. The
required Debt Service millage rate must also be set at the same time as the general operating
millage.
After setting the proposed operating millage rate,the Commission may,at any time prior to the
final adoption, lower the rates by adjusting priorities. However, increasing the millage rate may
only be accomplished by an expensive mailing and advertising process to every property owner
on Miami Beach.
ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH
On July 1, 2013, the City received the "2013 Certification of TaxableValue"from the Property
Appraiser's Office stating that the taxable value for the City of Miami Beach is $24.7 billion
including$78.1 million in new construction. The preliminary 2013 value represents an increase
of$1.6 billion or 6.9 percent more than the July 1, 2012 Certification of Taxable Value of$23.1
billion and an increase of 6.5 percent excluding new construction.
The comparative assessed values for the Miami Beach Redevelopment Agency City Center
redevelopment district increased from$3.6 billion to$3.9 billion an increase of$263 million or a
7.3 percent increase over 2012 certified values. In addition, assessed values within the
geographic area formerly known as the South Pointe redevelopment district increased from$3.6
billion to$3.9 billion an increase of$297 million, or an 8.2 percent increase in values over 2012
certified values. As a result, taxable values in the areas outside the City Center RDA/South
Pointe area increased by 6.3 percent, from $15.4 billion to $16.4 billion, an increase of$974
million.
Citywide values excluding City Center increased from$19.5 billion to$20.8 billion, an increase
of $1.3 billion or 6.8 percent. Values outside the City Center area determine General Fund
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 8
revenues.Adjusting for the base value Center City RDA which remains in the General Fund,the
increase is actually 6.7 percent for the General Fund.
COMPARATIVE ASSESSED VALUES
Jan. 1 2013
Value (in Change from 2012
Jan. 1 2012 Value (in billions) billions) Value (Budget)
As of July 1 Revised
2012 Value (For As of July 1
(For FY FY Change in 2013
2012/13 2012/13 2012 (For 2012/13 $
Budget) Projection) Values %Chg. Budget) (in billions) %Chg
RDA- City $ 3.6087 $ 3.4072 $(0.2015) -5.6% $ 3.8714 $ 0.2627
Ctr 7.3%
South Pointe 3.6181 3.4734 (0.1447) -4.0% 3.9148 $ 0.2967 8.2%
General 15.8455 15.1414 (0.7041) -4.4% 16.8704 $ 1.0249
Fund excl
S.Pte 6.5%
Total $23.0723 $22.0220 (1.0503) -4.6% $ 24.6566 $ 1.5843
Citywide 6.9%
Citywide
Net of City
Ctr 1 $ 19.4641 $ 18.615 $ (0.849) -4.4% $ 20.7851 $ 1.32161 6.8%
VALUE OF ONE MILL OF TAXABLE VALUE
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, the value for each mill is determined by the 2013
Certification of Taxable Value and has been set at $24.6 million. 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$23.4 million. Net of Center City RDA tax increment available to the
General Fund, the value of one mill at 95 percent is $20.0 pillion.
MAXIMUM MILLAGE DETERMINATION
For FY 2013/14 the proposed operating mills a rate for general Ci ty operations is 6.
0909,same
as in FY 2012/13. Based on the July 1, 2013 Certification of Taxable Value, 6.0909 mills would
generate approximately$142,671,710 in general tax revenues,an increase of$9,167,060 over
FY 2012/13 budgeted property tax revenues Citywide(General Fund, City Center RDA and the
South Pointe area).
Further, the January, 12012 tax roll Citywide declined by $1.1 billion between the July 1, 2012
valuation and the July 1, 2013 valuation due to appeals, adjustments, etc., which is part of the
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 9
reason that the FY 2013/14 "roll-back rate" is significantly less than the FY 2012/13 current
millage rate. The area outside of City Center RDA declined by almost$0.8 billion.
Further, pursuant to 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 the following
votes by the Commission or referendum:
• Option I: A majority of the approval of the Commission Millage is required to approve a
millage up to 7.7169 (equivalent to 1.69 percent increase in property tax revenues). The
1.69 percent increase is the state per capita personal income gain for the prior calendar
year.
• Option 11: A two-thirds approval (5 of 7 votes) of the Commission is required to approve a
millage up to 8.4886 (equivalent to a 10% increase in the ad valorem revenues above
Option 1).
• Option 111:A unanimous approval of the Commission or referendum is required to approve a
millage above 8.4886 up to the 10 mill cap
The proposed operating millage rate of 6.0909 therefore requires a majority approval (4 of 7
votes) of the Commission.
DETERMINING THE VOTED DEBT SERVICE MILLAGE LEVY
The general obligation debt service payment for FY 2012/13 is approximately $5.9 million.
Based on the July 1, 2013 Certified Taxable Value from the Property Appraiser, these bonds
would require the levy of a voted debt service millage of 0.2282 mills. This represents a
decrease of 0.0286 mills.
COMBINING THE OPERATING ANDVOTED DEBT SERVICE MILLAGE LEVIES
Illustrated below is a comparison of the combined millage rates and ad valorem revenues to the
City of Miami Beach for FY 2012/13 and FY 2013/14 (preliminary) including RDA. It is
recommended that in the General Fund, 0.1083 mills of the total operating millage continue to
be dedicated to renewal and replacement, resulting in approximately$1.98 million in renewal
and replacement funding.
nc/(Dec)
From From
FY 06/07 FY 12/13 E 1=Y-13/14 I nc/(Dec) FY13/14 FY 06/07
City of Miami Beach Millage Rates r
Operating
. 0.0000
7.1920 59826
Capital Renewal & Replacement 0.1820 0.1083 0 10833 0.0000
Sub-total Operating Millage 7.3740 6.0909; 6 0909 0.0000 0.0% -17.4%
Debt Service 0.2990 0.256841 r-_"0:2529 -0.0039
Tota 1 7.6730 6.3477 r-^__C343$ -0.0039 -0.1% -17.3%
If these recommended millage rates are tentatively adopted,then the City of Miami Beach's total
operating millage will remain the same as the current year, and the voted debt service millage
will decrease by 0.0039 mills.
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 10
IMPACT OF JULY 17 PROPOSED MILLAGE LEVY IMPACT ONPROPERTY 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 2012,the CPI has been determined to
be 1.7 percent and therefore,the increase is capped at 1.7%for increased values as of January
1, 2013.
Overall, based on the homesteaded properties in the January 1, 2012 homestead values as of
July 1, 2012 valuation, (the latest available from the Miami-Dade County Property Appraiser at
this time), the median value of homesteaded property in Miami Beach for 2012 was$122,582,
and the average $295,315. Applying the increase to the market value of all existing
homesteaded properties from the 2012 tax roll, and the 1.7 percent CPI adjustment,the impact
of the millage rate adjustment to homesteaded properties would be as shown in the following
table.
Homesteaded Properties
FY 2013/14
FY 2012/13* with 1.7%CPI
Median Average
2013 Preliminary Taxable Value $122,582 $295,315 $124,666 $300,335
City of Miami Beach
Operating $ 747 $ 1,799 $ 759 $ 1,829
Voted Debt 31 75 32 76
Total Miami Beach $ 778 $ 1,874 $ 791 $ 1,905
$Change in Taxes
Operating $ 12 $ 30
Voted Debt 1 1
Total Miami Beach $ 13 $ 31
*Source:Miami-Dade County Property Appraiser's-2012-average-median-
homestead-residential-values file
Historical Perspective
It is important to remember that in prior years,the City of Miami Beach significantly reduced tax
rates as property values increased. Between FY 1999/00 and FY 2009/10, property tax rates
declined approximately 2.8 mills. In FY 2007/08 alone, the property tax rate declined by
approximately 1.8 mills,with annual savings to the average homesteaded property of over$400.
In addition, in FY 2005/06 and FY 2006/07, the City funded $200 and $300 homeowner
dividends paid to homesteaded property owners in the City.
I
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 11
Total Combined Millage
Cn
0
P
98 99 900'01'02'03 '04'05'06'07'08'09'10'11'12'13'14
Fiscal Years
The combined millage rate overall remains approximately 2.5 mills lower or 27%,than it was in
FY 1999/00.
FIRST PUBLIC HEARING
The first public hearing on the proposed millage rates and tentative budgets for FY 2013/14
must be held no later than 80 days or earlier than 65 days from the start of the TRIM ("Truth In
Millage")calendar(July 1 st). Other guidelines are: 1)the public hearing cannot be scheduled on
a Sunday or on those days utilized by Miami-Dade County or the Miami-Dade County School
Board for their public hearings; and 2) if on a day other than Saturday,the public hearing must
be after 5:00 P.M.
Based on these guidelines, the first hearing must be held between September 3rd and
September 18th. These dates are unavailable for the following reasons:
September 8 and 15 Sundays
September 10 and 19 Proposed dates for Miami=Dade County Public Hearings
September 3 Miami-Dade County School Board Public Hearing
Of the remaining days, it is recommended that the first public hearing be set for Wednesday,
September 11, 2013, at 5:01 P.M., in the City Commission Chambers, City Hall, and 1700
Convention Center Drive, Miami Beach, Florida.
JM: :J
Attachment
FY 2013/14 Proposed Millage Rate
July 17, 2013
Page 12
ATTACHMENT1
FY 2013/14 GENERAL FUND CURRENT SERVICE LEVEL BUDGET
PRELIMINARY ESTIMATE WITH JULY 1 VALUES
GENERAL FUND REVENUES
CARRYFORWARD TO OFFSET PENSION COSTS LOSS of$2.2M CARRYFORWARD IN FY 2012J13-FY 2013/14$831,000
OTHER CARRYOVER FROM PRIOR YEAR DECREASED FROM$3.4 MILLION to$2.7 MILLION
FY 2013/14 Prelim. %Change
FY 2012/13 Est.as of July 1- $Change from from
GENERAL FUND REVENUES Adopted Budget Current Millage Budget Budget
Property Taxes $114,317,000 $ 121,965,000 $7,648,000 6.7%
Property Taxes-Normandy Shores 129,000 147,000 18,000 14.0%
Other Taxes 24,023,000 22,207,000 (1,816,000) -7.6%
Licenses&Permits 20,033,000 22,421,000 2,388,000 11.9%
Intergovernmental 9,827,000 9,907,000 80,000 0.8%
Charges For Services 10,668,000 10,629,000 (39,000) -0.4%
Fines and Forefeits 2,199,000 2,019,000 (180,000) -8.2%
Interest 2,983,000 2,477,000 (506,000) -17.0%
Rents and Leases 6,464,000 7,014,000 550,000 8.5%
Miscellaneous 11,830,000 11,903,000 73,000 0.6%
Resort Taxes 30,965,000 30,965,000 - 0.00/0
Other Non-Operating Revenues 8,532,000 8,532,000 - 0.0%
Reserves-Bldg Dept 1,500,000 1,500,000 - 0.0.0
Parking Surplus Transfer 7,200,000 7,200,000 - 0.09/0
Prior year set aside 3,400,000 2,700,000 (700,000) -20.6%
Prior year set aside for Pension 2,210,000 831,000 (1,379,000) -62.4%
Total $ 256,280,000 $ 262,417,000 1 $ 6,137,0001 2.4%
GENERAL FUND EXPENDITURES
COLA 0%
MERIT(ASFCME,GSA,CWA,UNCLASSIFEDS,OTHERS) 2% Max
STEP(IAFF&FOP) 5% To Max of Ranges
PENSION COSTS-GF INCREASE IMPACT
FY 2012/13 ARC Estimate
F&P Pension(98%of$2.2M increase) $ 2,156,000
MBERP(67%of$5M increase) $ 3,350,000
Total Net Pension Cost for F&P and MBERP $ 5,506,000
HEALTH&LIFE INS 1090 Increase from FY 2012/13 projected
%Change
FY 2013/14 Prelim. $Change from from
FY 2012/13 Budget Est.as of July 1 Budget Budget
Salaries $ 100,083,000 $ 102,685,000 $ 2,602,000 2.6%
Overtime/Other Wages $ 10,392,000 $ 11,218,000 $ 826,000 7.9%
Benefits
Pension-F&P 38,532,000 40,688,000 2,156,000 5.6%
Pension-MBERP 13,756,000 17,106,000 3,350,000 24.4%
Other Pension Costs 5,913,000 5,917,000 4,000 0.1%
Health and Life 10,875,000 11,067,000 192,000 1.8%
Other Benefits 4,343,000 4,368,000 25,000 0.6%
Total Benefits 73,419,000 S 79,146,000 5 5,727,000 7.8%
Total Salary and Benefits 5 183,894,000 5 193,049,000 S 9,155,000 5.0%
Operating 26,343,000 27,269,000 926,000 3.5%
Internal Service Funds 39,446,000 41,220,000 1,774,000 4.5%
Capital&Debt 5,766,000 5,799,000 33,000 0.6%
Set Aside for Future Year 831,000 (831,000) -100.0%
Total 256,280,000 267,337,000 S 11,057,000 4.3%
Net Revenues Less Expenditures - (4,920,000)1 (4,920,000