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Resolution 2018-30511 RESOLUTION NO. 2018-30511 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1) THE FINAL AD VALOREM MILLAGE OF 5.7288 MILLS FOR FISCAL YEAR (FY) 2018/19 FOR GENERAL OPERATING PURPOSES, WHICH IS FOUR AND SEVEN TENTHS PERCENT(4.7%) MORE THAN THE "ROLLED-BACK" RATE OF 5.4727 MILLS; AND 2) THE DEBT SERVICE MILLAGE RATE OF 0.1600 MILLS. WHEREAS, on July 25, 2018, the City Commission set the proposed general operating millage rate at 5.7288 mills (excluding debt service) for general operating purposes, which is an increase of 0.0064 mills from the FY 2017/18 general operating millage rate; and 0.1600 mills for debt service, which is a reduction of 0.0064 mills from the FY 2017/18 debt service millage rate; and WHEREAS, the proposed general operating millage rate of 5.7288 is comprised of a general millage rate of 5.6298, a capital renewal and replacement millage rate of 0.0235, and a newly dedicated capital Pay-As-You-Go millage rate of 0.0755; and WHEREAS, at the first public hearing on September 12, 2018, the Mayor and City Commission tentatively adopted the operating millage rate of 5.7288 mills for general operating purposes, and 0.1600 mills for debt service; and WHEREAS, Section 200.065, Florida Statutes, requires that at the conclusion of the second public hearing on the City's proposed tax rate and budget, the City Commission: 1) adopt a final ad valorem millage rate for FY 2018/19 general operating purposes; and 2) adopt the required debt service millage rate; this is accomplished by adopting a Resolution which includes the percentage increase or decrease over the "rolled-back" rate; and NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, as follows: (1) Pursuant to Section 200.065, Florida Statutes, there is hereby levied a tax for FY 2018/19, on all taxable and non-exempt real and personal property located within the corporate limits of the City of Miami Beach, Florida, as follows: (a) For the purpose of operating the government of the City, the rate assigned amounts to 5.7288 mills. Also included are appropriate reserves and contingencies, which are not limited to reserves for tax discounts and abatements of uncollected taxes. The millage rate reflected is four and seven-tenths percent (4.7%) more than the "Rolled-back" rate of 5.4727 mills. (b) For the purpose of providing payment on the principal and interest portions of the General Obligation Bond Debt outstanding and miscellaneous debt service expenditures, the rate assigned amounts to 0.1600 mills. PASSED AND ADOPTED this 26th day of September, 2018. ATTEST: Dan Gelber, Mayor 411 R w Rafael E. Granado, ity Clerk F 'N APPROVED AS TO """"'••..,•.0 FORM & LANGUAGE �S.`,,.•„� •,y 4 &FOR�E ECUTION `.INOORP ORATED; g City Attorney Dote y, CO/ `•N. CN 06 Resolutions- R7 A MIAMI BEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Jimmy L. Morales, City Manager DATE: September 26, 2018 5:01 p.m. Second Reading Public Hearing SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1) THE FINAL AD VALOREM MILLAGE OF 5.7288 MILLS FOR FISCAL YEAR (FY) 2018/19 FOR GENERAL OPERATING PURPOSES, WHICH IS FOUR AND SEVEN TENTHS PERCENT (4.7%) MORE THAN THE "ROLLED-BACK" RATE OF 5.4727 MILLS;AND 2) THE DEBT SERVICE MILLAGE RATE OF 0.1600 MILLS. • RECOMMENDATION See attached Memorandum. Legislative Tracking Budget and Performance Improvement ATTACHMENTS: Description ❑ FY 2019 General Operating Millage Memo ❑ Resolution Page 45 of 366 1/0 IA '.'F , v11 /30 vii 1W0 City of Miami Beach, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamlbeochfl.gov COMMISSION MEMORANDUM TO: Mayor Dan Gelber and Members of the City Commission FROM: Jimmy L. Morales, City Manager DATE: September 26, 2018 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING: 1) THE FINAL AD VALOREM MILLAGE OF 5.7288 MILLS FOR FISCAL YEAR (FY) 2018/19 FOR GENERAL OPERATING PURPOSES, WHICH IS FOUR AND SEVEN TENTHS PERCENT (4.7%) MORE THAN THE "ROLLED-BACK" RATE OF 5.4727 MILLS; AND 2) THE DEBT SERVICE MILLAGE RATE OF 0.1600 MILLS 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) Final Millage Rates for FY 2018/19: General Millage 5.6298 mills (0.0691 less than last year) Capital Renewal & Replacement Millage 0.0235 mills (same as last year) Pay-As-You-Go (PAYGO) Millage 0.0755 mills (new in FY 2018/19) Total General Operating Millage 5.7288 mills (0.0064 more than last year) Voted Debt Service Millage 0.1600 mills (0.0064 less than last year) Total Combined Millage 5.8888 mills (same as last year) 2) The final adopted combined millage rate of 5.8888 mills is the same as the combined millage rate for FY 2017/18. The final adopted operating millage rate of 5.7288 for FY2018/19 is 0.2561 mills, or 4.7% more than the "rolled-back" rate of 5.4727. As a result, the City is required to publish a Notice of Tax Increase. The first public hearing on the tentative millage rates for FY 2018/19 was held on September 12, 2018. The millage rates herein are those which were tentatively adopted at the first public hearing on that day. The"rolled-back"millage rate for FY 2018/19 is the millage rate required to produce the same level of property tax revenues in the General Fund in FY 2018/19 as anticipated to be received in FY 2017/18. It is important to note that the January 1,2017 citywide tax roll declined by almost$758.1 million between the July 1, 2017 certified valuation and the July 1, 2018 final valuation due to appeals, adjustments, etc., which is part of the reason the FY 2018/19"rolled-back" millage rate is 0.2561 mills,or4.7% lower than the FY 2017/18 general operating millage rate and is lower than it Page 46 of 366 FY 2018/19 Final Millage Rates September 26, 2018 Page 2 would have been if the"rolled-back"rate was only adjusted for the increase in revenues generated by higher property values. The area outside of the City Center Redevelopment Area (RDA),which impacts the General Fund revenues directly, decreased in values by approximately$525.2 million between the July 1, 2017 certified valuation and the July 1, 2018 final valuation. PROCEDURE Florida Statutes, Section 200.065, requires that at the conclusion of the second public hearing on the proposed tax rate and budget, the City Commission proceed in the following specific manner: 1. Adopt a final ad valorem millage rate for FY 2018/19 general operating purposes. This is accomplished by adopting a Resolution which includes the percentage increase or decrease over the "rolled-back" rate; the required Debt Service millage rate. State statute requires that only the title be read aloud. 2. Adopt a final general operating budget for FY 2018/19. Also included are budgets for the Enterprise, Internal Service, Special Revenue, G.O. Bond Debt Service and City Center RDA Funds. This is accomplished by adopting a companion Resolution. (See accompanying City Budget Agenda Item). ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH On July 1, 2018, the City received the 2018 Certification of Taxable Value from the Miami-Dade County Property Appraiser's Office indicating that the taxable value for the City of Miami Beach was $38.9 billion, which included $186.1 million in new construction. Property taxes comprise approximately 53% of total General Fund revenues. The comparative assessed values for the City Center RDA increased from $5.7 billion to $6.0 billion, which is an increase of approximately$290 million, or 5.1 percent, over the certified 2017 values. Citywide values, excluding the City Center RDA district, increased from $31.7 billion to $32.9 billion, which is an increase of$1.2 billion, or 3.8 percent, over the certified 2017 values. Comparative Assessed Values Citywide vs.City Center RDA January 1,2017 Value(in billions) January 1,2018 Value(in billions) July 1,2017 Revised Value Change in July 1,2018 $Change (FY2017/18 (FY2017/18 % Chg. (FY2018119 %Chg. (in billions) Budget) Projection) 2017 Values Budget) Total Citywide $ 37.397 $ 36.639 $ (0.758) -2.0% $ 38.888 $ 1.491 4.0% City Center RDA $ (5.703) $ (5.470) $ 0.233 -4.1% $ (5.993) $ (0.290) 5.1% Citywide.Net of City Center RDA S 31.694 $ 31.169 $ (0.525) -1.7% $ 32.894 $ 1.200 3.8% DETERMINING THE VOTED DEBT SERVICE MILLAGE LEVY The General Obligation (G.O.) Bond debt service payment for FY 2018/19 is projected to be$5.9 million. Based on the July 1, 2018 certified taxable values received from the Miami-Dade County Property Appraiser's Office,this debt service payment would require the levy of a voted debt service Page 47 of 366 FY 2018/19 Final Millage Rates September 26, 2018 Page 3 millage of 0.1600 mills, which represents a decrease of 0.0064 mills from the FY 2017/18 voted debt service levy of 0.1664 mills. This difference is proposed to be applied to the general operating millage rate. IMPACT OF PROPOSED MILLAGE LEVY IMPACT ON PROPERTY OWNERS Homesteaded Properties In 1992, voters approved an amendment to the Florida Constitution known as Amendment 10 or Save Our Homes (SOH). SOH is an assessment limitation, or"cap", on increases in the assessed value of a homesteaded residence.Those increases are limited to 3%or the percent change in the CPI(Consumer Price Index),whichever is less.The"cap"goes into effect beginning the year after a homestead exemption is granted. Based on the January 1,2018 homesteaded property values as of July 1,2018,the median value of homesteaded property in Miami Beach was$186,172 and the average was$473,353 (assuming a 2.1 percent increase over 2017 median and average homesteaded property values pursuant to SOH). The impact of the proposed millage rate adjustment to homesteaded properties in Miami Beach would be an increase of$24 for the median and an increase of$58 for the average value homesteaded property as reflected in the table below: Homesteaded Properties FY 2017/18 FY 2018/19 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 $Change in Taxes Operating $ 24 $ 59 Voted Debt - (1) Total Miami Beach $ 24 $ 58 "Source:Miami-Dade County Property Appraisers-2017-average-median-homestead-residen8al- values fie Impact on Non-Homesteaded Properties The annual increase in market value of a non-homesteaded property is capped at 10 percent(does not apply to school millage rates). The city-wide average increase in property values is 4.0 percent. The property value of individual properties may increase up to, but not more than 10 percent (excluding the school millage portion of the property tax bill). However,an individual property owner may see a higher than 10 percent increase if there is a change in ownership of a capped property resulting in a reset of the cap. Another potential factor, if applicable, would be the value of new construction which could contribute to a property value increase of higher than 10 percent. Page 48 of 366 FY 2018/19 Final Millage Rates September 26, 2018 Page 4 OVERLAPPING JURISDICTIONAL OPERATING AND DEBT SERVICE MILLAGE RATES City of Miami Beach property owners must also pay property taxes to Miami-Dade County, the Miami-Dade County School Board, the Children's Trust, the South Florida Water Management District, Okeechobee Basin, Everglades Project, and the Florida Inland Navigational District. These taxing authorities represent 69 percent of a Miami Beach property owner's tax bill. The countywide tax rate for Miami-Dade County remained flat at 4.6669; the library tax rate also remained flat; and the debt service millage increased by 0.0644 mills. The tax rate for the Miami- Dade School District decreased from 6.9940 to 6.7330 mills. The Children's Trust millage rate decreased from 0.4673 to 0.4415 mills. As a whole, the millage rates for the South Florida Water Management District, Okeechobee Basin, Everglades Project, and Florida Inland Navigational District decreased from 0.3420 mills to 0.3256 mills. With the Proposed rates for FY 2018/19, the Miami Beach portion of the tax bill is approximately 31 percent of the total bill. Of note, the County millage rate is 0.9707 mills less than the County millage in FY 2006/07, as compared to the City's millage rate, which is 1.7842 mills less than the City millage in FY 2006/07. Further, the School Board millage is 1.3720 below the FY 2006/07 millage rate. The significant difference in the total overlapping millage rate is a direct result of the City's effort to keep the millage rates as low as possible. A summary of the tax rate changes is provided in the following table. Variance Variance Yo of OVERLAPPING TAX MILLAGE FY 2006)07 FY 2017/18 FY 2018/19 from from FY 2018119 FY 2017/18 FY 2006)07 Total 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 Millaeo 7.3740 5.7224 5.7288 0.0064 -1.6452 Voted Debt Serdce 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 SerMoe 0.2850 0.4000 0.4644 0.0644 0.1794 subtotal 6.3660 5.3509 5.4153 0.0644 0.9707 29% School Board 8.1050 6.9940 8.7330 -0.2610 -1.3720 36% Children's Trust 0.4220 0.4673 f . 04415 -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% Page 49 of 366 FY 2018/19 Final Mil/age Rates September 26, 2018 Page 5 IMPACT OF COMBINED TAX RATES OF OVERLAPPING JURISDICTIONS ON HOMESTEADED PROPERTIES The City of Miami Beach's 2018 preliminary median and average homesteaded residential taxable values are$186,172 and$473,353 respectively. Applying the Proposed combined millage rates to the median and average taxable values results in a property tax increase of approximately$29 for the median and $72 for the average homesteaded residential tax bill. Median properties would pay approximately$3,501 for all taxing jurisdictions combined, while the average taxes generated would be approximately $8,901 per homesteaded property. Of these taxing jurisdictions,the highest component is the Miami-Dade School Board,at$1,253 for a median value homesteaded property, and $3,187 for an average valued homesteaded property. The following table provides examples of changes in property taxes for homesteaded properties using the Proposed tax rates and potential changes from 2017 values. Homesteaded Properties FY 2017/18 FY 2018119 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 Operating $ 24 $ 59 Voted Debt - (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-2017-average-median-homestead-residential- values file As with the City of Miami Beach millage rates, impacts of the combined jurisdictional millage rates for non-homesteaded properties are based on the individual property values. 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 Page 50 of 366 FY 2018/19 Final Millage Rates September 26, 2018 Page 6 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 total combined millage rate for FY 2018/19 of 5.8888 is the lowest it has been in at least 50 years and is equivalent to the total combined millage rate adopted in FY 2017/18. Millage Rates Tax Levy (in millions) General Fund Total Taxable Final/Reesed Total Total Tax (including S. Peinand Property Taxable Combined Gneral Levy Renewal s Taxable Values Values Citywide Fund/RDA including Replacement Values Chart (billions) (billions) Millage Millage Debt B CRR) FY1997/98 $ 6.46 $ 6.40 9.2100 7.4990 $ 57.45 $ 46.78 FY1998/99 $ 6.97 $ 6.87 8.9830 7.4990 $ 60.37 $ 44.66 FY1999/00 $ 7.66 $ 7.54 8.6980 7.4990 $ 64.29 $ 47.36 FY2000/01 $ 8.37 $ 8.22 8.5550 7.3990 $ 69.08 $ 49.75 FY2001/02 $ 9.40 $ 9.22 8.3760 7.2990 $ 75.97 $ 54.37 FY2002/03 $ 10.56 $ 10.41 8.3220 7.2990 $ 84.81 $ 61.05 FY2003/04 $ 12.09 $ 11.85 8.1730 7.2990 $ 95.39 $ 68.17 FY2004/05 $ 14.04 $ 13.86 8.1730 7.4250 $ 110.74 $ 79.38 FY2005/06 $ 17.45 $ 17.15 8.0730 7.4810 $ 135.91 $ 111.69 FY2006/07 $ 22.74 $ 22.26 7.6730 7.3740 $ 168.38 $ 140.31 FY2007/08 $ 26.85 $ 26.14 5.8970 5.6555 $ 150.42 $ 125.33 FY2008/09 $ 26.90 $ 25.89 5.8930 5.6555 $ 150.59 $ 125.94 FY2009/10 $ 24.70 $ 23.24 5.9123 5.6555 $ 138.70 $ 115.73 FY2010/11 $ 22.10 $ 20.97 6.5025 6.2155 $ 136.55 $ 112.14 FY2011/12 $ 21.98 $ 20.75 6.4539 6.1655 $ 134.75 $ 111.29 FY2012/13 $ 23.07 $ 22.02 6.3477 6.0909 $ 139.10 $ 114.32 FY2013/14 $ 24.66 $ 23.64 6.1163 5.8634 $ 143.26 $ 117.41 FY2014/15 $ 27.10 $ 26.27 6.0237 5.7942 $ 155.10 $ 127.76 FY2015/16 $ 30.70 $ 29.92 5.9123 5.7092 $ 172.42 $ 143.16 FY2016/17 $ 34.70 $ 33.99 5.8888 5.7092 $ 194.11 $ 160.78 FY2017/18 $ 37.39 $ 36.63 5.8888 5.7224 $ 209.21 $ 175.36 FY2018/19 $ 38.88 5.8888 5.7288 $ 217.51 $ 182.16 "Data not available until next calendar year Page 51 of 366 FY 2018/19 Final Millage Rates September 26, 2018 Page 7 Total Combined Millage Rates 10.0000 y 8.0000 K 6.0000 - 110 - - I - 1 1 1 1 co 4.0000 11111111I111111111 1 2.0000 11111111 11111111 1 0,0000 m 0 r.aDOal 0000000000 o � al aaa 00 -mCl00000000 > 4U LL ›--L: >--- LLal ai ' >- >- LL Fiscal Years Property Values and Tax Levy Today's General Fund Operating Budget also reflects greater diversification of revenues since FY 2006/07. The Proposed Work Plan and Budget includes $35.8 million in resort taxes to fund tourism-eligible expenditures (increased by$886,000 from last year)and a$1.2 million transfer of Parking Operations Fund year-end surplus (reduced$3.2 million from last year). In large part due to these alternative sources, property tax revenues represent 53 percent of the total funding for the FY 2018/19 General Fund budget, as compared to 59 percent in FY 2006/07, which represents a significant reduction over the past several years. Despite the General Fund budget increasing from$237.7 million in FY 2006/07 to$345.1 million in FY 2018/19, a 45% increase, the property tax levy has only increased by $49.1 million, or 29% between FY 2006/07 and FY 2018/19. Page 52 of 366 FY 2018/19 Final Millage Rates September 26, 2018 Page 8 340 — - - '° 320 _... sop AO Tr 360 Z 240 a 710 �m d m I e in P Bo W N m •m •m •m 'v m ss 'u 'ss •vs •n m ®wceem•values -0-4a Lary nnmlre Debt STATUTORY REQUIREMENTS Florida Statute, Section 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 Florida Statute,the City is required,within 35 days of receipt of the"Certification of Taxable Value" (received July 1, 2018), 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 budgets for FY 2018/19. The required debt service millage rate must also be set at the same time as the general operating millage. After setting the proposed FY 2018/19 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 As presented at the May 24, 2018 Budget Workshop, and Budget Briefings, the proposed FY 2018/19 general operating millage rate,which includes a newly dedicated millage for Pay-As-You- Go (PAYGO)capital funds and allows for growth over time with property values equivalent to$2.4 million included in the FY 2018/19 proposed General Fund budget and entirely offset by a decrease in the City's general millage, is 5.7288 mills. Based on the July 1, 2018 Certification of Taxable Value received from the Miami-Dade County Property Appraiser, the levy of 5.7288 mills would generate approximately$182.2 million in General Fund property tax revenues,which is an increase of$6.8 million over FY 2017/18 budgeted property tax revenues Citywide (net of the City Center RDA). Page 53 of 366 FY 2018/19 Final Millage Rates September 26, 2018 Page 9 July 2017 July 2018 Certified Certified Property Assessment Existing Values 36,538,197,107 38,701,545,195 New Construction 858,865,383 186,115,906 Total 37,397,062,490 38,887,661,101 City Center ROA 5,702,556,459 5,993,199,959 Citywide Total 31,694,506,031 32,894,461,142 Properly Tax Revenue Projection 175,363,000 182,168,000 Property Tax Revenue Projection Variance 6,805,000 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 City Commission or referendum: • Option I: A majority approval of the Commission is required to approve a millage up to 6.1024 mills (equivalent to a 1.47% increase in Property Tax revenues). The 1.0147 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 6.7126 mills (equivalent to a 10% increase in Property Tax revenues above Option I). • Option III: A unanimous approval of the Commission or referendum is required to approve a millage above 6.7126 mills. Adoption of the proposed FY 2018/19 total general operating millaqe rate of 5.7288 mills,therefore requires a majority approval (4 of 7 votes) by the City Commission per the State of Florida's Truth- in-Millage (TRIM) requirements. CONCLUSION The Administration recommends adoption of the attached Resolution which sets both final operating and debt service millage rates for FY 2018/19 at 5.7288 mills and 0.1600 mills, respectively. JLM/JW/TOS Page 54 of 366