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Proposed Fiscal Year 2019 Operating Millage and Budget PresentationFY 2019 Proposed Budget FY 2019 Budget Briefings Commission Budget Workshop May 24, 2018 Capital Budget & Operating Budget Update June 8, 2018 Operating Budget & Capital Budget Update July 13, 2018 Operating Budget & Capital Budget Update July 20, 2018 Enterprise Funds Operating Budgets July 27, 2018 2 Proposed Millage Rates Convert PAYGO into a millage rate similar to Capital Renewal & Replacement to grow with property values FY 2018 Adopted FY 2019 Proposed Variance $ Variance General 5.6989 5.6298 (0.0691) (2,196,490) Renewal & Replacement 0.0235 0.0235 - - Pay -Go - 0.0755 0.0755 2,400,000 General Operating Millage 5.7224 5.7288 0.0064 203,510 Debt Service 0.1664 0.1600 (0.0064) (203,510) Total Combined Millage 5.8888 5.8888 - - 3 4 Overlapping Jurisdictional Millage Rates City of Miami Beach Operating 7.1920 5.6989 5.6298 -0.0691 -1.5622 Capital Renewal & Replacement 0.1820 0.0235 0.0235 0.0000 -0.1585 Pay-As-You-Go Capital 0.0000 0.0000 0.0755 0.0755 0.0755 Subtotal Operating Millage 7.3740 5.7224 5.7288 0.0064 -1.6452 Voted Debt Service 0.2990 0.1664 0.1600 -0.0064 -0.1390 Total 7.6730 5.8888 5.8888 0.0000 -1.7842 31% Miami Dade County Countywide 5.6150 4.6669 4.6669 0.0000 -0.9481 Library 0.4860 0.2840 0.2840 0.0000 -0.2020 Debt Service 0.2850 0.4000 0.4644 0.0644 0.1794 Subtotal 6.3860 5.3509 5.4153 0.0644 -0.9707 29% School Board 8.1050 6.9940 6.7330 -0.2610 -1.3720 36% Children's Trust 0.4220 0.4673 0.4415 -0.0258 0.0195 2% Other 0.7360 0.3420 0.3256 -0.0164 -0.4104 2% Total 23.3220 19.0430 18.8042 -0.2388 -4.5178 100% Variance from FY 2006/07 % of FY 2018/19 Total FY 2017/18 FY 2018/19 Variance from FY 2017/18 OVERLAPPING TAX MILLAGE FY 2006/07 Overall 0.2388 mills less than FY 2018 5 Overall Impact on Homesteaded Property Owners Median**Average**Median Average Preliminary Taxable Value*182,343$ 463,617$ 186,172$ 473,353$ City of Miami Beach Operating 1,043$ 2,653$ 1,067$ 2,712$ Voted Debt 30 77 30 76 Total Miami Beach 1,073$ 2,730$ 1,097$ 2,788$ Miami Dade County 976 2,481 1,008 2,563 Schools 1,275 3,243 1,253 3,187 Other 148 375 143 363 Total 3,472$ 8,829$ 3,501$ 8,901$ Change in Taxes City of Miami Beach Operating 24$ 59$ Voted Debt 0 (1) Total Miami Beach 24$ 58$ Miami Dade County 32 82 Schools (22) (56) Other (5) (12) Total 29$ 72$ **Source: Miami-Dade County Property Appraiser's Office: 2017 Preliminary Average and Median Homestead Residential Values Report Impact on Homesteaded Properties FY 2017/18 FY 2018/19 6 FY 2019 Operating Budget 7 General Fund Budget Trend 8 Average 4% Growth/Year Since 2008 Position Count FY 2007 to FY 2019 9 Overall position count is 5 positions more than FY 2018 & 34 (1.6%) more than in FY 2007. General Fund & G.O. Debt by Average Daily Population 10 Average Daily Population has grown faster than the General Fund and G.O. Debt budget since FY 2007 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 GF Exp per ADP GO Debt per ADP 1,498 1,465 1,381 1,276 1,327 1,242 1,287 1,305 1,400 1,477 FY 2019 Property Values Normandy Shores: 7.0% Miami-Dade County: 6.5% Miami-Dade School Board: 5.6% The Property Appraiser provides preliminary 2019 property values on June 1st and certified values on July 1st Certified property values: 4.0% increase 11 Property Value Historical Trend FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 (0.2%) (8.2%) (10.5%) (0.5%) 4.9% 6.9% 9.9% 13.3% 13.0% 7.7% 4.0% 12 New Construction Historical Trend FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Existing Property $22.91 $21.55 $21.88 $22.98 $24.58 $26.95 $30.43 $33.53 $36.54 $38.70 New Construction $1.78 $0.56 $0.10 $0.10 $0.08 $0.15 $0.27 $1.17 $0.86 $0.19 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $- $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 Bi l l i o n 13 FY 2019 Proposed Budget Based on July 1st Property Values FY 2019 REVENUES 339,637,000 2.7% EXPENDITURES 344,190,000 4.0% SURPLUS / (GAP) (4,553,000) Preliminary Property Value Increase 4.0% 1% Change in Property Value $1.7M 14 Approaches to Balance Budget •Revenue Refinements •Proposed Revenue Enhancements •Proposed Reductions/ Efficiencies/ Enhancements 15 July 20, 2018 Budget Briefing Balancing Strategies $ July 1 Preliminary Gap (4,553,000) Recommended Reductions 1,716,000 Recommended Revenue Enhancements 1,094,000 Recommended Enhancements (1,981,000) Revenue Refinements 1,485,000 Transfer in from Parking 1,166,000 Other Expenditure Refinements - Less One-time Expenditures 1,073,000 Surplus/ (Gap)- 16 Additional Expenditures Recommended at July 20, 2018 Budget Briefing Additional FY 2019 Requests $ Additional Park Rangers •Beachwalk (South Pointe Park to 46th Street) •Collins Park •Barry Kutun boat ramp 422,000 Increase in the City’s funding for Cultural Organizations (Resort Tax) •Bass Museum $234K •Colony Theater $330K •Byron Carlyle $162K 726,000 Total 1,148,000 17 Recommended Expenditure Reductions PROPOSED EXPENDITURE REDUCTIONS $ Year 1 $ Year 2 Eliminate 5 FT and 4 PT vacant General Fund positions 469,000 476,000 Eliminate Rapid Response Team (2 filled positions) 147,000 149,000 Reduce General Fund Contingency 332,000 332,000 Eliminate 1 Asst. City Manager position (when vacated) 75,000 300,000 Eliminate annual grant to MDPL per FCWPC recommendation 23,000 23,000 Other departmental operating reductions/efficiencies 660,000 611,000 Transfer MB Gay Parade to Resort Tax Fund 10,000 10,000 Elimination of security posts at City Hall 159,000 159,000 Total 1,875,000 2,060,000 ATTACHMENT A 18 PROPOSED REVENUE ENHANCEMENTS $ Golf Fees 265,000 Police Off-Duty Administrative Fees 164,000 Elevator Permit/Inspection Fees 236,000 Public Works Elevator Lockbox Fees 11,000 Sidewalk Café Permit Fees 358,000 Food Truck Pilot Program 60,000 Non-Resident Parks and Recreation Fees 41,000 Total 1,135,000 Proposed Revenue Enhancements ATTACHMENT B 19 Recommended Expenditure Enhancement ATTACHMENT C RECOMMENDED RECURRING ENHANCEMENTS $ Year 1 $ Year 2 Police Officers in Schools 871,000 675,000 Convert Part-time School Liaison Supervisor to Full- time 34,000 50,000 Part -time Education Compact Initiatives Coordinator 45,000 45,000 Living Wage Increase (General Fund) 89,000 89,000 Internal Service Impact of Enhancements 61,000 61,000 Homeless Relocation Services 10,000 10,000 Cat Network Program 10,000 10,000 Park Rangers - Beachwalk (South Pointe Park to 46th Street), Collins Park & Barry Kutun Boat Ramp 250,000 243,000 Bass Museum ($234K), Colony Theater ($330K), Byron Carlyle ($162,000) Management Agreements 726,000 726,000 Total 2,096,000 1,909,000 20 EXPENDITURE REFINEMENTS $ Decrease in Risk Management Charge to General Fund 392,000 Increase in Internal Service Expense Charge to General Fund -102,000 Total 290,000 Expenditure Refinements 21 Recommended One-Time Expenditures RECOMMENDED ONE-TIME EXPENDITURES $ Year 1 $ Year 2 First-Year Funding Bridge for Office of the Inspector General 484,000 1,100,000 Sunset Islands 3 & 4 Undergrounding Project Debt Service 212,000 0 Business Tax Receipt (BTR) Process Improvements 200,000 0 Washington Avenue Master Plan 50,000 0 Employee Innovation Academy 35,000 0 Camillus House Pilot Project 92,000 0 Total 1,073,000 1,100,000 ATTACHMENT C 22 Historical Parking Transfer to General Fund Fiscal Year $ FY 2011 3,600,000 FY 2012 7,200,000 FY 2013 7,200,000 FY 2014 8,400,000 FY 2015 8,400,000 FY 2016 8,400,000 FY 2017 6,400,000 FY 2018 4,400,000 FY 2019 1,166,000 RECOMMENDATION: Reduce transfer to the General Fund and transfer $4.4 M from RDA Amendment proceeds to General Fund (Reduce use of RDA Amendment proceeds over time) 23 Balancing Strategies General Fund $ July 1 Preliminary Deficit (4,553,000) Recommended Reductions 1,875,000 Recommended Revenue Enhancements 1,135,000 Recommended Enhancements (2,957,000) Revenue Refinements 1,971,000 Transfer in from Parking 1,166,000 Other Expenditure Refinements 290,000 Less One-time Enhancements 1,073,000 Surplus / (Deficit) - 24 Resort Tax Fund 25 July 20, 2018 Budget Briefing Balancing Strategies $ Budget Surplus 2,783,000 Transfer to Sanitation Fund (941,000) Transfer to General Fund (500,000) Recommended Efficiency 48,000 Recommended Enhancements (2,191,000) Less One-Time Expenditures 801,000 Surplus/ (Gap)- 26 Additional Expenditures Recommended at July 20, 2018 Budget Briefing Additional FY 2019 Requests $ Increase in the City’s funding for Cultural Organizations •Bass Museum $234K •Colony Theater $330K •Byron Carlyle $162K 726,000 27 Adjustments Subsequent to Budget Briefings FY 2019 Budget Adjustments $ Increase in Transfer to General Fund (Cultural Organizations) 726,000 Increase in Admin. Fees transferred to General Fund 234,000 28 Resort Tax Budget Enhancements Enhancements $ Year 1 $ Year 2 Police Overtime & Equipment for High Impact Periods 700,000 700,000 Miami Beach Air & Sea Show 350,000 0 Memorial Day Programming/Cultural Activation 100,000 0 International Tennis Federation Sponsorship 100,000 0 Additional Enhanced Holiday Lighting 140,000 365,000 Miami Beach Gay Pride Parade 73,000 73,000 Ocean Drive Off-Duty Program 151,000 0 Total 1,614,000 1,138,000 29 ATTACHMENT C Enterprise Funds 30 Parking 31 Parking Fund: Solutions ($6.32M) Reduce $4.4M transfer to the General Fund in FY 2019 by $3.23M 1 Reduce $4.15M transfer to Transportation Fund in FY 2019 by $2.16M 2 Potential Rate Increases $928,000 3 32 Proposed Parking Revenue Enhancements Revenue Category Current Proposed Incremental Cummulative 1 Daily Space Rental Construction $25 space/day $35.00 space/day 224,000$ 224,000$ 2 Meter Hours Entertainment District Ocean Dr. to Wash. Ave. 5th to 15th St. 9 AM to 3 AM 24 Hours 135,000$ 359,000$ 3 46th St & Collins Ave Parking Lot (P71) Metered 8am – 6pm Weekend Flat $20/$6 Flat Rate 24 Hours $20/$6 539,000$ 898,000$ 4 Hostel/Bed & Breakfast Residential Zones Annual Permit $54.60 Daily Permit $3 30,000$ 928,000$ 33 Proposed Realignment of 1% QOL Resort Tax Transportation Fund is heavily reliant on Parking Fund (39.5% of FY18 budgeted revenues or $5.9 million) to offset the cost of the Trolley program Reduce Parking Fund transfer to Transportation by $2.16 M Transportation 45%6,490,000 Transportation 60%8,653,000 2,163,000 NB - QOL 15%2,163,000 NB - QOL 10%1,442,000 (721,000) MB - QOL 15%2,163,000 MB - QOL 10%1,442,000 (721,000) SB - QOL 15%2,163,000 SB - QOL 10%1,442,000 (721,000) Arts 10%1,442,000 Arts 10%1,442,000 0 Total 100%14,421,000 Total 100%14,421,000 0 Prop vs Curr. 1% Allocation1% Quality of Life (QOL) Revenue Allocation 1% Quality of Life (QOL) Revenue Allocation FY19 PROJECTED (CURRENT)FY19 PROJECTED (PROPOSED) 34 Sanitation 35 Sanitation Fund Challenges Sanitation rates have not been increased for several years City has been absorbing recycling fees since 2008 Resort Tax Fund unable to fund to $2.8M in FY 2018 and $1.9M in FY2019 After proposed rate increases, will still need to balance with $2.5 M of Fund Balance $1.7M of Fund Balance used for Hurricane Irma in FY 2017 36 Proposed Sanitation Rate Increases Fee Rate Change Justification Residential Recycling Fees From $0 to $3.62/mth. Miami Dade County Pass Through - City has been absorbing since 2008 Commercial Franchise Fees From 18% to 20% Last increased 2007 Roll-Off Permit Fees From 18% to 20% Last increased 2008 37 Water | Sewer | Storm Water 38 Proposed Rate Increases Fee Rate Change Justification Water Base Facility and Consumption 3.5% CPI increase Ordinance 2016-4039 Wholesale Water Charge 3.9% decrease MDC Reduction Pass Through Sewer Base Facility and Consumption 3.5% CPI increase Ordinance 2016-4039 Storm Water Fee per Equivalent Residential Unit 3.5% CPI increase Ordinance 2017-4145 39 FY 2019 PROPOSED CAPITAL BUDGET 40 PROPOSED CAPITAL BUDGET OVERVIEW Proposed FY 2019 Budget $48.5 M 76 Projects Excludes Projects included on G.O. Bond List 41 PROGRAM HIGHLIGHTS Streets & Streetscapes $15.8 M 1 Transit / Transportation $7.0 M Renewal & Replacement $6.9 M Utilities $6.7 M Parks & Recreation $5.6 M 42 2 3 4 5 FY 2019 PROPOSED PROGRAM AREAS CAPITAL & DEBT SECTION OF BUDGET BOOK 43 FY 2019 PROPOSED SOURCES OF FUNDS CAPITAL & DEBT SECTION OF BUDGET BOOK 44 New Capital Budget Requests Project Name $ Funding Source Lenox Court and Jefferson Avenue Seawall 300,000 Holocaust Memorial Seawall Project Purdy Avenue Boat Ramp Repairs 200,000 Mid-Beach QOL Funds ($873K available) 45 Future Outlook 46 Likely Scenario Assumptions REVENUE ASSUMPTIONS GENERAL FUND REVENUES - SCENARIO # 2 LIKELY FY20 FY21 FY22 FY23 FY24 PROPERTY TAXES 4.0%4.0%5.0%5.0%5.0% RESORT TAX 5.0%5.0%2.0%2.0%2.0% ALL OTHER EXPENDITURE ASSUMPTIONS SCENARIO #2 LIKELY FY20 FY21 FY22 FY23 FY24 COLA 1.0%1.0%2.0%2.0%2.0% PENSION COSTS - F&P 4.4%1.5%2.0%1.8%1.5% PENSION COSTS - MBERP 2.4%3.2%-2.2%-1.5%-0.2% EXCESS PENSION PMTS-IRS 415 HEALTH & LIFE INS MERIT STEP 1.5% 10.0% 1.0% 2.0% 5.0% 47 Five -Year Forecast – Likely Scenario 48 Year Surplus/(Deficit) FY 2020 (683,000) FY 2021 (497,000) FY 2022 577,000 FY 2023 1,547,000 FY 2024 2,270,000 Challenges Slow property value growth Additional homestead exemption of $25,000 Increasing cost of health insurance Declining rate of parking utilization Increasing operating and maintenance expenditures related G.O. Bond projects 49 Opportunities Re-Opening of Convention Center Potential Convention Center Hotel Exploring New Revenue Sources $140,000 reimbursement for Police in Schools Organizational Efficiencies/ Streamlines 50 Additional Potential Reductions Additional Potential Budget Reductions $ General Fund $ Other Funds Eliminate 3 FT and 4 PT vacant positions 101,000 168,000 Emergency Management department reorganization including Elimination of Director position 182,000 - Consolidate Office of the Inspector General with the Internal Audit Department TBD - 51 Next Steps First Public Hearing Wed. September 12 Second Public Hearing Wed. September 26 52