2017-29944 ResolutionRESOLUTION NO. 2017-29944
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA SETTING 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) 2017118; AND, 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 set the millage rate and adopt an annual budget; and
WHEREAS, development of the FY 2017 /18 budget began early in the year and has
included several discussions with the Commission that included a review of priorities,
economic 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 have provided tax and fee relief while at the same time providing improved
levels of services that address needs and priorities identified by the community; and
WHEREAS, maintaining and enhancing the City's priorities have become
increasingly more challenging due to a slowdown in the increase of property values,
declining property tax rates, and increasing personnel costs which include pension-related
costs; and
WHEREAS, the July 1, 2017 Certification of Taxable Value from the Miami-Dade
County Property Appraiser reflects a 7.78 percent increase in Citywide property tax values
from the July 1, 2016 tax roll certification, a 1.60 percent increase in property tax values in
the City Center Redevelopment Area (RDA), and a 8.97 percent increase in property tax
values outside the City Center RDA, which impacts the City's General Fund property tax
revenues; and
WHEREAS, at the June 16, 2017 and July 10, 2017 Finance and Citywide Projects
meetings, the consensus was to set the operating millage rate at 5. 7224 and the voted
debt service millage rate of 0.1664 mills for a total combined millage rate of 5.8888 mills,
which is the same as the FY 2016/17 total combined millage rate; and
WHEREAS, the City of Miami Beach is required to notify 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, 2016 tax roll declined by $701.4 million between the July
1, 2016 valuation and the July 1, 2017 valuation due to appeals and adjustments, which is
part of the reason why the FY 2017/18 "rolled-back rate" is 5.3174, which is 0.3918 mills
lower than the FY 2016/17 current operating millage rate.
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 2017/18
2)
Operating Millage
Voted Debt Service
Total Combined Millage
"Rolled-Back" Rate
5.7224 mills
0.1664 mills
5.8888 mills
5.3174 mills
3) The first public hearing on the proposed millage rates and budgets for FY 2017/18
shall be held on Wednesday, September 13, 2017 at 5:01 P.M., in the City
Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach,
Florida.
PASSED and ADOPTED, this 26th day of July, 2017.
ATTEST:
Resolutions • R7 J
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: July 26, 2017
SUBJECT A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA SETTING 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) 2017/18; AND, 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.
-----------------
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 2017/18:
I
Operating Millage
Voted Debt Service
Total Combined Millage
5. 7224 mills (0.0132 increase from last fiscal year)
0.1664 mills (0.0132 decrease from last fiscal year)
5.8888 mills (same as last fiscal year)
2) "Rolled-Back" Rate (Truth in Millage) 5.3174 mills
3) The first public hearing to consider the proposed millage rates and tentative budgets for FY
2017/18 shall be Wednesday, September 13, 2017 at 5:01 p.m., in the City Commission
Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida.
ANALYSIS
The "Rolled-Back" millage rate for FY 2017/18 is the millage rate required to produce the same level
of property tax revenues in the General Fund in FY 2017/18 as anticipated to be received in FY
2016/17. It is important to note that the January 1, 2016, tax roll Citywide declined by almost $701.4
million between the July 1, 2016 certified valuation and the July 1, 2017 final valuation due to
appeals, adjustments, etc., which is part of the reason the FY 2017/18 "rolled-back rate" is 0.3918
mills lower than the FY 2016/17 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 $318.1
Page 1793 of 2495
million during the same period of time.
The proposed millage provides funding to offset increases to the FY 2016/17 Current Service Level
(CSL) Budget for personnel costs such as a 3 percent cost of living increase; a 5% step increase for
all Fraternal Order of Police and International Association of Fire Fighters personnel; an average 2
percent performance-based merit increase for all non-Fraternal Order of Police and International
Association of Fire Fighters personnel; additional premiums for members of the Fraternal Order of
Police and International Association of Fire Fighters; the impact of annualized costs for expenditures
added pursuant to Commission direction during the current FY 2016/17; and higher operating and
internal services funds expenditures.
-
In FY 2016/17, the Administration adopted a total combined millage rate for the City of Miami Beach
of 5.8888, which is the lowest rate in at least 19 years.
The proposed operating millage for FY 2017/18 of 5. 7224 is 0.0132 mills higher than the FY 2016/17
operating millage of 5. 7092. The proposed voted debt service millage rate of 0.1664, which is based
on projected debt service costs for FY 2017/18, is 0.0132 mills lower than the FY 2016/17 voted debt
service millage of 0.1796. The proposed total combined millage of 5.8888 for FY 2017/18 is
equivalent to that of the total combined millage for FY 2016/17.
I
I
ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH
On July 1, 2017, the City received the 2017 Certification of Taxable Value from the Miami-Dade
County Property Appraiser's Office stating that the taxable value for the City of Miami Beach is $37.4
billion, which includes $859 million in new construction. Property taxes comprise approximately half of
the total General Fund revenues.
The following table shows the difference between the preliminary and certified values, and the impact
on FY 2017/18 property tax revenue projections.
June 1st July 1st
Preliminary Certified
ProperfYA$$~ssrnent : •.
:·
Existing Values 36,482, 000, 000 36,538,197,107
New Construction 812,000,000 858,865,383
Total 37,294,000,000 37,397,062,490
CltyCent$t,.RDA
e,11~1oocr,000 . 5;102;s56A59
Citywide Total 31, 119,000,000 31,694,506,031
Property Tax _Revenue Projection 172,347,000 175,363,000
Property Tax Revenue Projection Variance 3,016,000
The June 1st preliminary property tax revenue projections assumed the City Center RDA would
increase by 10 percent over 2016 based on historical trends. However, based on the July 1st certified
values, the City Center RDA only increased by 1.6% compared to 2016, thereby increasing the
citywide total by a greater percentage than originally projected. The result was an additional
$3,016,000 in projected property tax revenues for the General Fund.
The comparative assessed values for the City Center RDA district increased from $5.6 billion to $5.7
billion, which is an increase of $89.8 million or 1.6 percent over the 2016 certified values. Citywide
values, excluding the City Center RDA district, increased from $29.1 billion to $31. 7 billion, which is
an increase of $2.6 billion or 8.97 percent over the 2016 certified values.
Page 1794 of 2495
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 2017 Certification of
Taxable Value and has been set at $37.4 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
$35.5 million. Net of Center City RDA tax increment available to the General Fund, the value of one
mill at 95 percent is $30.6 million.
GENERAL FUND CURRENT SERVICE LEVEL BUDGET DEVELOPMENT
I
At the Commission Retreat on June 22, 2017, the Commission was briefed regarding the preliminary
General Fund Current Service Level (CSL) budget. The CSL represents the cost of providing the
same level of services as in the prior year and serves as the baseline of funding for the budget
process. The Commission was also briefed on the updated CSL budget at the July 10th and July
21st Finance & Citywide Projects Committee budget meetings.
Overall, CSL expenditures for FY 2017/18 have increased by $11.9 million, primarily due to the
following personnel expenditures, the majority of which are contractually required:
• 2 percent merit pay for all groups except Police and Fire : $2.2 million
• 5 percent Step for Police and Fire: $2.9 million
• 3 percent Cost of Living Adjustment effective, July 2018: $1 million
• Increase in Citywide Health and Life Insurance: $2.56 million
• Increase in Annual Required Contribution for Fire & Police Pension: $1.9 million
• Increase in Annual Required Contribution for Non-Police & Fire Pension: $2.2 million
In addition, the CSL budget includes:
• Increase in Debt Service payments: $700,000
• $3 million decrease in funds set aside for future year expenditures
• Increase in Operating expenditures: $875,000, which includes $343,000 in expenditures related
to the insourclng of the North Shore Tennis Center; $133,000 related to the increased cost of
shelter beds for the homeless; and $110,000 for the maintenance and repair of City sidewalks
and light poles.
These expenditures do not reflect additional savings from potential efficiencies or reductions. The
proposed CSL is based on the certified July 1st property values and reflects a revenue increase of
$15.5 million and an expenditure increase of $11.9 million for a net surplus of approximately $3.6
million.
The remaining steps in the decision-making process include the first public hearing on the FY
2017/18 Proposed Budget, which is scheduled on September 13, 2017 at 5:01 pm and a second
public hearing scheduled on September 25, 2017 at 5:01 pm.
-
DETERMINING THE VOTED DEBT SERVICE MILLAGE LEVY
Page 1795 of 2495
The general obligation debt service payment for FY 2017/18 is projected to be $5.914 million. Based
on the July 1, 2017 Certified Taxable Value from the Property Appraiser, this debt service payment
would require the levy of a voted debt service millage of 0.1664 mills, which represents a decrease of
0.0132 mills over the prior year voted debt service millage of 0.1796.
IMPACT OF PROPOSED MILLAGE LEVY IMPACT ON PROPERTY OWNERS
Homesteaded Properties
Amendment 1 O 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.
Based on the January 1, 2017 homesteaded property values as of July 1, 2017, the median value of
homesteaded property in Miami Beach was $182,343 and the average was $463,617. The impact of
the millage rate adjustment to homesteaded properties would be $88 for the median and $210 for the
average value homesteaded property as reflected in the table below.
Historical Perspective
It is important to note 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. Further, the proposed City of Miami Beach combined millage rate is the
lowest it has been in at least 19 years and is equivalent to the FY 2016/17 millage rate.
STATUTORY REQUIREMENTS
Page 1796 of 2495
FS 200.065, entitled "Method of Fixing Millage" establishes specific guidelines that must be used by
all local government entities in setting 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, 2017), 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 2017/18. 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. The City's proposed operating millage rate as well as that of other taxing authorities will be
included in the Truth-in-Millage (TRIM) statement sent to each property owner in the City.
-
MAXIMUM MILLAGE DETERMINATION
-
Per Commission direction at the July 10, 2017 Finance and Citywide Projects Committee meeting,
the proposed operating millage rate for general City operations for FY 2017/18 is 5.7224, which
includes the portion of the voted debt service reduction of 0.0132 mills. Based on the July 1, 2017
Certification of Taxable Value, 5.7224 mills would generate approximately $175,363,000 in General
Fund property tax revenues, which is an increase of $14,751,000 over FY 2016/17 budgeted
property tax revenues Citywide (net of City Center RDA).
July 2016 July 2017
Certified Certified
Property Ai:isessment
Existing Values 33,532,510,312 36,538, 197, 107
New Construction 1,165,246,796 858,865,383
Total 34,697, 757, 108 37,397,062,490
CityCehterCf:{A .. . 5,612,/7'44,843. I 0 to2'.:55(f459 ' ' ) ' '< ,, '
Citywide Total 29,085,012,265 31,694,506,031
Property Tax Revenue Projection 160,612,000 175i363,000
Property Tax Revenue Projection Variance 14,751,000
Further, pursuant to State Statute, the City may elect to approve millage rates above the rolled-back
rate up to the constitutional cap of 10 mills subject to the following votes by the Commission or
referendum:
• Option I: A majority approval of the Commission is required to approve a millage up to 6.2141
(equivalent to a 3. 11 percent increase in property tax revenues). The 1.0311 percent increase
is the state per capita personal income gain for the prior calendar year.
• Option II: A two-thirds approval (5 of 7 votes) of the Commission is required to approve a
millage up to 6.8355 (equivalent to a 10% increase in the ad valorem revenues above Option I).
• Option Ill: A unanimous approval of the Commission or referendum is required to approve a
millage above 6.8355 up to the cap of 10 mills.
Page 1797 of 2495
The proposed FY2017/18 operating millage rate of 5.7224, therefore, requires a majority
approval (4 of 7 votes) of the Commission.
FIRST PUBLIC HEARING
The first public hearing on the proposed operating millage rate and tentative budget for FY 2017/18
must be held no later than 80 days or earlier than 65 days from the start of the TRIM calendar (July
1st). 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 hearing; 2) If
on a day other than Saturday, it must be held after 5:00 P.M.; and 3) must be held immediately
following discussion of the tentative millage and budget of its principal taxing authority (City of Miami
Beach).
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 3, 10, and 17
September4
Sundays
Labor Day
September 5
Dade County Public Hearing
September 6
School Board Public Hearing
Proposed dates for Miami-
Miami-Dade County
Of the remaining days available, it is recommended that the first public hearing be set for
Wednesday, September 13, 2017 at 5:01 P.M., in the City Commission Chambers, City Hall, 1700
Convention Center Drive, immediately following the City of Miami Beach's public hearing.
Legislative Tracking
Budget and Performance Improvement
ATTACHMENTS:
Description
[) Memo -City of Miami Beach FY 2017/18 Millage
[) Resolution
Page 1798 of 2495
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: July 26, 2017
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA SETTING 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) 2017/18; 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 2017 /18:
Operating Millage
Voted Debt Service
Total Combined Millage
5. 7224 mills (0.0132 increase from last fiscal year)
0.1664 mills (0.0132 decrease from last fiscal year)
5.8888 mills (same as last fiscal year)
2) "Rolled-Back" Rate (Truth in Millage) 5.3174 mills
3) The first public hearing to consider the proposed millage rates and tentative budgets for
FY 2017/18 shall be Wednesday, September 13, 2017 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 2017/18 is the millage rate required to produce the
same level of property tax revenues in the General Fund in FY 2017/18 as anticipated to be
received in FY 2016/17. It is important to note that the January 1, 2016, tax roll Citywide
declined by almost $701.4 million between the July 1, 2016 certified valuation and the July
1, 2017 final valuation due to appeals, adjustments, etc., which is part of the reason the FY
2017/18 "rolled-back rate" is 0.3918 mills lower than the FY 2016/17 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 $318. 1 million during the same period of
time.
The proposed millage provides funding to offset increases to the FY 2016/17 Current
Service Level (CSL) Budget for personnel costs such as a 3 percent cost of living increase;
Page 1799 of 2495
FY 2017118 Proposed Millage Rate
July 26, 2017
Page 2
a 5% step increase for all Fraternal Order of Police and International Association of Fire
Fighters personnel; an average 2 percent performance-based merit increase for all non-
Fraternal Order of Police and International Association of Fire Fighters personnel; additional
premiums for members of the Fraternal Order of Police and International Association of Fire
Fighters; the impact of annualized costs for expenditures added pursuant to Commission
direction during the current FY 2016/17; and higher operating and internal services funds
expenditures.
In FY 2016/17, the Administration adopted a total combined millage rate for the City of
Miami Beach of 5.8888, which is the lowest rate in at least 19 years.
The proposed operating millage for FY 2017/18 of 5.7224 is 0.0132 mills higher than the FY
2016/17 operating millage of 5. 7092. The proposed voted debt service millage rate of
0.1664, which is based on projected debt service costs for FY 2017/18, is 0.0132 mills lower
than the FY 2016/17 voted debt service millage of 0.1796. The proposed total combined
millage of 5.8888 for FY 2017/18 is equivalent to that of the total combined millage for FY
2016/17.
City of Miami Beach Millage Rates
Operating Millage
FY 2016/17 FY 2017/18 Inc I (Dec) % Inc I (Dec)
Voted Debt Service Millage
Total Combined Millage
5. 7092 5. 7224
0.1796 0.1664
5.8888 5.8888
ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH
0.0132 0.23%
(0.0132) -7.35%
0.0000 0.00%
On July 1, 2017, the City received the 2017 Certification of Taxable Value from the Miami-
Dade County Property Appraiser's Office stating that the taxable value for the City of Miami
Beach is $37.4 billion, which includes $859 million in new construction. Property taxes
comprise approximately half of the total General Fund revenues.
The following table shows the difference between the preliminary and certified values, and
the impact on FY 2017/18 property tax revenue projections.
June 1st July 1st
Preliminary Certified
Property Assessment
Existing Values 36,482,000,000 36,538, 197, 107
New Construction 812,000,000 858,865,383
Total 37 ,294,000,000 37,397,062,490
City Center RDA 6,175,0001000 5, 702,556,459
Citywide Total 31J119,000,000 31 ,694,506,031
Property Tax Revenue Projection 172,347,000 175;363,000
Property Tax Revenue Projection Variance 3,016,000
The June 1st preliminary property tax revenue projections assumed the City Center RDA
would increase by 10 percent over 2016 based on historical trends. However, based on the
July 1st certified values, the City Center RDA only increased by 1.6% compared to 2016,
thereby increasing the citywide total by a greater percentage than originally projected. The
result was an additional $3,016,000 in projected property tax revenues for the General
Fund.
Page 1800 of 2495
FY 2017118 Proposed Millage Rate
July 26, 2017
Page 3
The comparative assessed values for the City Center RDA district increased from $5.6
billion to $5. 7 billion, which is an increase of $89.8 million or 1.6 percent over the 2016
certified values. Citywide values, excluding the City Center RDA district, increased from
$29.1 billion to $31. 7 billion, which is an increase of $2.6 billion or 8.97 percent over the
2016 certified values.
Corrparative Assessed Values Citywide vs. City Center RDA
January 1, 2016 Value (in billions) January 1, 2017 Value (in billions)
July 1, 2016 Revised Value Change in July1, 2017 $Change (FY2016/17 (FY2016/17 2016 Values %Chg. (FY2017/18 (in billions) %Chg.
Budget) Projection) Budget)
Total Citywide
$ 34.698
$ 33.996
$ (0.702) -2.02%
$ 37.397
$ 2.699 7.78%
RDA· Cit~ $ 5.613
$ 5.295
$ (0.318) -5.67%
$ 5.703
$ 0.090 1.60% Center -Citywide • Net
of Citv Center $ 29.085 $ 28.701
$ (0.384) -1.32%
$ 31.694
$ 2.609 8.97%
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
2017 Certification of Taxable Value and has been set at $37.4 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 $35.5 million. Net of Center City RDA tax
increment available to the General Fund, the value of one mill at 95 percent is $30.6 million.
GENERAL FUND CURRENT SERVICE LEVEL BUDGET DEVELOPMENT
At the Commission Retreat on June 22, 2017, the Commission was briefed regarding the
preliminary General Fund Current Service Level (CSL) budget. The CSL represents the
cost of providing the same level of services as in the prior year and serves as the baseline
of funding for the budget process. The Commission was also briefed on the updated CSL
budget at the July 10th and July 21st Finance & Citywide Projects Committee budget
meetings.
Overall, CSL expenditures for FY 2017/18 have increased by $11.9 million, primarily due to
the following personnel expenditures, the majority of which are contractually required:
• 2 percent merit pay for all groups except Police and Fire : $2.2 million
• 5 percent Step for Police and Fire: $2.9 million
• 3 percent Cost of Living Adjustment effective, July 2018: $1 million
• Increase in Citywide Health and Life Insurance: $2.56 million
• Increase in Annual Required Contribution for Fire & Police Pension: $1.9 million
• Increase in Annual Required Contribution for Non-Police & Fire Pension: $2.2 million
Page 1801 of 2495
FY 2017118 Proposed Millage Rate
July 26, 2017
Page 4
In addition, the CSL budget includes:
• Increase in Debt Service payments: $700,000
• $3 million decrease in funds set aside for future year expenditures
• Increase in Operating expenditures: $875,000, which includes $343,000 in
expenditures related to the insourcing of the North Shore Tennis Center; $133,000
related to the increased cost of shelter beds for the homeless; and $110,000 for the
maintenance and repair of City sidewalks and light poles.
These expenditures do not reflect additional savings from potential efficiencies or
reductions. The proposed CSL is based on the certified July 1st property values and reflects
a revenue increase of $15.5 million and an expenditure increase of $11.9 million for a net
surplus of approximately $3.6 million.
The remaining steps in the decision-making process include the first public hearing on the
FY 2017/18 Proposed Budget, which is scheduled on September 13, 2017 at 5:01 pm and a
second public hearing scheduled on September 25, 2017 at 5:01 pm.
DETERMINING THE VOTED DEBT SERVICE MILLAGE LEVY
The general obligation debt service payment for FY 2017/18 is projected to be $5.914
million. Based on the July 1, 2017 Certified Taxable Value from the Property Appraiser, this
debt service payment would require the levy of a voted debt service millage of 0.1664 mills,
which represents a decrease of 0.0132 mills over the prior year voted debt service millage of
0.1796.
IMPACT OF PROPOSED MILLAGE LEVY IMPACT ON PROPERTY OWNERS
Homesteaded Properties
Amendment 10 to the State Constitution took effect on January 1, 1995 and limited the
increase in assessed value of homesteaded property to the percentage increase in the
Consumer Price Index (CPI) or three percent (3%), whichever is less.
Based on the January 1, 2017 homesteaded property values as of July 1, 2017, the median
value of homesteaded property in Miami Beach was $182,343 and the average was
$463,617. The impact of the millage rate adjustment to homesteaded properties would be
$88 for the median and $210 for the average value homesteaded property as reflected in
the table below.
Page 1802 of 2495
FY 2017118 Proposed Millage Rate
July 26, 2017
Page 5
"
Preliminary Taxable Value*
City of Miami Beach
Operating
Voted Debt
Total Miami Beach
$Change in Taxes
Operating
Voted Debt
Total Miami Beach
$
$
$
$
Homesteaded Properties
FY 2016/17
Median
I Average
167,342 I $ 427,845
955
$ 2,443
30
$ 77
985 $ 2,519
FY 2017/18
Median
I Average
$ 182,343 I $ 463,617
$ 1,043
$ 2,653
$ 30
$ 77
$ 1,073 $ 2,730
$ 88 $ 210
$ 0
$ 0
$ 88 $ 210
*Source: Miami-Dade County Property Appraiser's Office: 2016 and 2017 Preliminary Average Median
Homestead Residential Values Report
Historical Perspective
It is important to note 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. Further, the
proposed City of Miami Beach combined millage rate is the lowest it has been in at least 19
years and is equivalent to the FY 2016/17 millage rate.
STATUTORY REQUIREMENTS
FS 200.065, entitled "Method of Fixing Millage" establishes specific guidelines that must be
used by all local government entities in setting 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, 2017), 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 2017/18. 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. The City's proposed operating millage rate as well as that
of other taxing authorities will be included in the Truth-in-Millage (TRIM) statement sent to
each property owner in the City.
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FY 2017118 Proposed Millage Rate
July 26, 2017
Page 6
MAXIMUM MILLAGE DETERMINATION
Per Commission direction at the July 10, 2017 Finance and Citywide Projects Committee
meeting, the proposed operating millage rate for general City operations for FY 2017/18 is
5.7224, which includes the portion of the voted debt service reduction of 0.0132 mills. Based
on the July 1, 2017 Certification of Taxable Value, 5.7224 mills would generate
approximately $175,363,000 in General Fund property tax revenues, which is an increase of
$14,751,000 over FY 2016/17 budgeted property tax revenues Citywide (net of City Center
RDA).
July 2016 July 2017
Certified Certified
Property j\ssessment
Existing Values 33,532,510,312 36,538, 197' 107
New Construction 1, 165,246, 796 858,865,383
Total 34,697,757,108 37,397,062,490
City Center
CR~ 5,612,744,84~ 5,702,551:),4!)9
Citywide Total 29,085,012,265 31,694,506,031
Property Jax R!:lvenue ProJectioh 160,612,000 175,363,000
Property Tax Revenue Projection Variance 14,751,000
Further, pursuant to State Statute, the City may elect to approve millage rates above the
rolled-back rate up to the constitutional cap of 10 mills subject to the following votes by the
Commission or referendum:
• Option I: A majority approval of the Commission is required to approve a millage up to
6.2141 (equivalent to a 3.11 percent increase in property tax revenues). The 1.0311
percent increase is the state per capita personal income gain for the prior calendar year.
• Option II: A two-thirds approval (5 of 7 votes) of the Commission is required to approve a
millage up to 6.8355 (equivalent to a 10% increase in the ad valorem revenues above
Option I).
• Option Ill: A unanimous approval of the Commission or referendum is required to
approve a millage above 6.8355 up to the cap of 10 mills.
The proposed FY2017/18 operating millage rate of 5.7224, therefore, requires a majority
approval (4 of 7 votes) of the Commission.
FIRST PUBLIC HEARING
The first public hearing on the proposed operating millage rate and tentative budget for FY
2017 /18 must be held no later than 80 days or earlier than 65 days from the start of the
TRIM calendar (July 1st). 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 hearing; 2) If on a day other than Saturday, it must be held
after 5:00 P.M.; and 3) must be held immediately following discussion of the tentative
millage and budget of its principal taxing authority (City of Miami Beach).
Based on these guidelines, the first hearing must be held between September 3rd and
September 18th. These dates are unavailable for the following reasons:
Page 1804 of 2495
FY 2017118 Proposed Millage Rate
July 26, 2017
Page 7
September 3, 10, and 17
September 4
September 5
September 6
Sundays
Labor Day
Proposed dates for Miami-Dade County Public Hearing
Miami-Dade County School Board Public Hearing
Of the remaining days available, it is recommended that the first public hearing be set for
Wednesday, September 13, 2017 at 5:01 P.M., in the City Commission Chambers, City Hall,
1700 Convention Center Drive, immediately following the City of Miami Beach's public
hearing.
JLM/CGR
Page 1805 of 2495