97-22486 RESO
RESOLUTION NO.
97-22486
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, SETTING THE
PROPOSED MILLAGE RATES FOR FY 1997/98, 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 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
In mi cipalities may fix the millage rate and adopt an annual budget; and
WHEREAS, the City of Miami Beach is required to advise the Dade County Property
A 'ptaiser of the Proposed Millage Rate, the Rolled-Back Rate, and the date, time, and place of the
fiT st :mblic hearing.
NOW, THEREFORE BE IT DULY RESOLVED BY THE MAYOR AND THE CITY
C ]1',1MISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the following
re:ornme.R( dations ofthe Administration be and are hereby ratified for transmittal to the Dade County
PlOp~rtYiAppraiser, as specified in Section 200.065, Florida Statutes:
1 J)r,j),sed Millage Rates for FY 1997/98 .
~ General Operatmg 7.499 mIlls
,j; Debt Service 1.711 mills
i;.J
2)
Rolled-Back Rate
7.197 mills
3) The first public hearing on the proposed millage rate and the tentative budget for
Fiscal Year 1997/98 shall be held on Thursday, September 11,1997 at 5:01 P.M., in
the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami
Beach, Florida.
PASSED and ADOPTED, this 16th day of ,My, 1997.
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
ATTEST:
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c: TY CLERK
F:\ lU[ IG\$BUD\JOSE\98TENT I.MIL
1f! WM:: ~
City Attorney Dm~
C:ITY OF
MIAMI BEACH
CIT" HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
COMMISSION MEMORANDUM NO. ~ '29 - Cf 1
TC:
Mayor Seymour Gelber and
Memben of the City Commission
DATE: July 16, 1997
FRO J\[:
Jose Garcia-Pedrosa J._,,/ I
City Manager ~l.!f
A RESOLUTION S~ING 1) THE PROPOSED OPERATIN"G MILLAGE RATE; 2) THE
REQUIRED DEBT IERVICE MILLAGE RATE; 3) THE CALCULATED ROLLED BACK
RA TEj AND, 4) THE DATE, TIME AND PLACE OF THE FIRST PUBLIC HEARING TO
CONSIDER THE MILLAGE RATES AND BUDGETS FOR FISCAL YEAR 1997/98
SUil~ECT:
SUl',iIl',fARY
The Administration is recommending !ill increase in the City's current millage rate of 7.499 and has
calcllated a decrease of 0.168 in the current debt service millage rate of 1.879. Increased property
values, although capped by Amendment 10, will nevertheless cause a net increase of $19.36 in the
amc unt of taxes that the average residential homeowner will pay to the City in the coming fiscal
yeaI. Because the COllilty and the School Board have announced overall increases in their property
tax'atl:, the combined impact on the average homeowner in Miami Beach will be an increase of
$12..68. The percentage of property taxes going to the City will decline from 33.4% to 32.8%,
whi e ':he County's share will increase from 27% to 27.5%, and the School Board's share will
incr:ase from 37% to 37.2%,
For he reasons stated in the last section of this memorandum, this proposed budget does not include
any )rc vision for the substantial costs to the City associated with the termination of the Development
Agrl:ement between the City and the Porto fino entities.
AD1I,1:r~ISTRATION RECOMMENDATION
The <\dministration recommends that the Mayor and City Commission adopt the attached resolution
whi<. h mthorizes the City Manager to transmit the following information to the Dade County
Prof ert y Appraiser:
I) Pn )posed Millage Rates for FY 1997/98:
General Operating
Debt Service
7.499 mills
1.711 mills
AGENDA ITEM~
DATE 7-Jlp-C, 1_
FY 1917/98 Proposed Millage Rate
Ju/:,' 11), 1997
Pa~ e - 2 -
2) Rolled Back Rate (Truth in Millage)
7.197 mills
3) The first public hearing to consider the proposed millage rates and tentative budgets for FY
1997/98 shall be at 5:01 p.m., Thursday, September 11, 1997 in the City Commission
Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida.
DEli :ISlON-MAKING PROCESS
The budget development process includes participation from within and from outside City Hall. The
Adrlinistration conducted a Commission workshop on July 9, 1997, for the purpose of informing
bott th~ Commission and the citizens about the proposed budget. The Budget Advisory Committee
(BAC) hosted a citizen forum on July 15, 1997 to gain additional citizen input regarding the
prolosl~d budget.
The:mdget development process for the upcoming fiscal year has been particularly difficult, due to
sign ficant increases in fixed costs that will restrict opportunities to increase service levels in the
FYl)97/98 proposed general fund budget. Increased salary and fringe benefit expense, particularly
pem ion expense, combined with decreased miscellaneous income, have required expenditure
redu:tions in every department. The reductions, based upon thorough analysis by staff, will ensure
the (.el: very of current, basic services. Maintaining the basic service level into FY 1997/98 will
tran~ lat~ into a total operating budget of$102,506,5l4, which is $1,384,086 or 1.4% greater than the
estinlatl~d current year-end operating expenditures of$101,122,428, which can be supported by the
prop lscd millage rate of 7.499 and other revenues.
STATUTORY REQUIREMENTS
FS2( 0.065, entitled "Method of Fixing Millage" establishes specific guidelines that must be used
by aU local government entities in setting millage (property tax) rates. Under the statute, the City
is ree uil'ed, within 35 days of receipt of the "Certification of Taxable Value" (received July I, 1997),
to ad rise the Dade County Property Appraiser of the proposed millage rates, the calculated rolled-
back rale and the date, time, and place of the first public hearing to consider the proposed millage
rates ani tentative budgets for Fiscal Year 1997/98. The required Debt Service millage rate must
also le ;et at the same time.
Aftell SEtting the proposed operating millage rate, the Commission may, at any time prior to
the fil na I adoption, lower the rates by adjusting priorities. Increasing the millage rate may only
be a< Iconplished by an expensive mailing and advertising process to every property owner on
Mialli : Beach.
F T 1997/98 Proposed Millage Rate
J~ ly 16, 1997
Pl'ge - 3 -
A]"JAL YSIS OF PROPERTY VALVES IN MIAMI BEACH
Or July 1, 1997, the City received the "1997 Certification of Taxable Value" from the Property
AIpr,liser's Office stating that the taxable value for the City of Miami Beach is $6,463,734,814,
including $204,607,776 in new construction, which is the single largest increase this City has
eX:lerienced in its recent history.
Property Value Trends
1986 to 1997
Th~ preliminary 1997 value represents an increase of 7.6
pel::ent over 1996's final value of $6,006,809 ,951. Alternately,
the increase is 5.7 percent over 1996's preliminary value of
$6, II ~,562,295. The difference of $107,752,344 between
19~ 6'~ preliminary and final values represents the equalization
los: 0: 1.8 percent due to appeals.
$7.0
$6.0
$5.0
.~ 5-<.0
ili $3.0
$2.0
$7.0
$6.0
$5.0
5-<.0
$3.0
$2.0
$1.0
$1.0
$0.0 $0.0
1_1W1~1_'_'~'~1m1~'_'_'~
nofJanulrf 1st,19xx
loe'::*" O~ .=~I
The. cDmparative assessed values for the Miami Beach Redevelopment Agency South Pointe
red:vdopment district increased marginally by only $1,987,683 or 0.5 percent from $368,619,293
to &370,606,976; however, values in the City Center redevelopment district increased by
$1C ,1:'3,949 or 2.0 percent from $497,342,509 to $507,516,458.
DE fERMINING THE OPERATING MILLAGE LEVY
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
Vall e. For the City of Miami Beach, this value is determined by the 1997 Certification of Taxable
Valle md has been set at $6,463,735. Florida Statutes permit a discount of up to five percent for
earl, p:lyment discounts, delinquencies, etc. For the City of Miami Beach, the discount utilized is
3.5 >elcent. Therefore, the 96.5 percent value of the mill is $6,237,504.
Prel rrunary budget estimates reveal that the current millage rate of 7.499 mills will be sufficient to
func a basic service level as it presently exists into the next year.
The proposed millage rate of 7.499 mills will generate ad-valorem tax revenues of$46,775,045 to
the }etleral Fund. This amount is $2,756,066 more than the prior year levy of $44,018,979,
refle::ti 19 a 6.26% increase.
DETERMINING THE DEBT-SERVICE MILLAGE LEVY
The lel:lt-service payment for FY 1997/98 is $10,672,369 and requires a tax rate of 1.711 mills. This
rate s 0.168 mills, or eight and nine tenths (8.9%) percent less than the FY 1996/97 rate of 1.879
mill~ .
FY 19:n/98 Proposed Millage Rate
Jul] hi, 1997
Pa~ e - 4 -
CO'\1JUNING THE OPERATING AND DEBT-SERVICE MILLAGE LEVIES
Illu: trated below is a comparison of the combined millage rates and ad valorem revenues to the City
of~[iami Beach for FY 1996/97 (final) and FY 1997/98 (preliminary).
Tax Rate Tax Levy
FY 96/97 FY 97/98 Incl(Dec) FY 96/97 FY 97/98 Incl(Dec)
(,eneral 7.499 7.499 0.000 $44,018,979 $46,775,045 $2,756,066
( 'perating 1.879 1,711 (0.168) 11 028 582 10.672.369 (356 213)
[ ebt Service 9.378 9.210 (0.168) $55,047,561 $57,447,414 $2,399,853
TOTAL
Ifth~se recommended millage rates are tentatively adopted, then the combined tax rate will decrease
by (.lli8 mills, or 1.8% under the current year. The operating millage will remain constant; and
debl-service millage will decrease by 0.168 mills, or eight and nine tenths percent (8.9%).
CO>rfHINING JURISDICTIONAL OPERATING AND DEBT -SERVICE MILLAGE
LE~I 1]:1:S
City of Miami Beach property owners must also pay property taxes to Metropolitan Dade County,
tl1e )aie County School Board, the South Florida Water Management District, and the Florida
InlaId Navigation District. In FY 92/93, the Miami Beach portion of the total tax bill was 37.6
perc~nt; this amount decreased to 33.4 percent in FY 1996/97. The recommended millage rates
for JlrY 1997/98 will decrease the Miami Beach portion of the tax bill to 32.8 percent based on
tax'ates announced by other jurisdictions.
Rev se<l FY 1997/98 tax rates will be considered by Dade County on September 4, 1997. The
COlli tywide tax rate will decrease by 0.005 mills from 6.469 to 6.464 mills; however tl1e County's
debt service will increase by 0.157 mills from 0.774 to 0.931 mills. A decrease for tl1e Library
Distler has been announced of 0.012 mills from 0.339 to 0.327 mills, While it is not possible to
detem .ne the exact amount returned in additional services, it should be noted that Dade County
retwned $3,157,291 during FY 1996/97 in tax-increment funds for the Redevelopment Agency and
its n 10.tax increment districts.
The )a:le County School Board is scheduled to discuss its proposed tax rate on July 28th, but has
anne llll;ed an increase of 0.061 mills from 10.366 to 10.427 mills': It must be noted that this value
is su ,je:t to change after the State of Florida reviews the counties' tax rolls and determines the "local
requ red effort" by Dade County.
F;" 1)97/98 Proposed Millage Rate
Ju y -'6, 1997
Pc'Se - 5 -
Illl strated below are the current and proposed tax rates for the multiple taxing authorities.
Adopted Proposed % % of
Taxing Jurisdiction FY 96/97 FY 97/98 Inct(Dec) Change Total
Miami Beach 32,8
General Operating 7.499 7.499 0,000 0,00
Debt Service 1.879 1.711 (0.168) (8.94)
Dade County 27.5
Countywide Operating 6.469 6.464 (0.005) (0.08)
Library 0.339 0.327 (0.012) (3.54)
Debt Service 0.774 0,931 0.157 20.28
School Board 10.366 10.427 0.061 0.59 37,2
Other 0,710 0.710 0.000 0.00 2.5
Totals 28.036 28.069 0.033 0.0012 100.0
co'~nINED MILLAGE LEVY IMPACT ON THE HOMEOWNER
Amncment 10 to the State Constitution took effect on January 1, 1995 and limited the increase in
asse;sed value of homesteaded property to the percentage increase in the consumer price index (CPI)
or tl reE: percent (3 %), whichever is less. For 1997, the CPI has been determined to be 3.0 percent
and hereby establishes the limit for increased values as of January 1, 1997. The $25,000 homestead
exenption is applied after the increase in value as follows: assuming that the average residential
prop~rt{ in Miami Beach was valued at $140,000, that value is increased by the 3.0% to a new value
of $ 4L.,200. The homestead exemption of $25,000 is then deducted, yielding a taxable value of
$1 E ,200. That value is then taxed as follows, using the alternative tax rates shown:
Taxing Miami Beach Miami Beach
Jurisdiction @ 7.197 @ 7.499
V1iami Beach $(16.64) $19.36
Jade County 48.53 48.53
:,chool Board 50.81 50.81
I )ther 2,98 2.98
notals $85,68 $121.68
UndEr the assumptions above, the total operating dollars paid to the City of Miami Beach at the
rolle( -b lck millage rate would decrease by $16.64; at the current operating millage rate, the tax
incre,se would be $19.36. This, of course, assumes that the other taxing jurisdictions adopt these
FJ I~)97/98 Proposed Millage Rate
Ju,YJ 6,1997
Pa'5e - 6 -
mi la~;es, It should also be noted that even at the rolled-back rate, Miami Beach taxpayers would
not experience a tax reduction in their total tax bill due to the fact that both the Dade County and
Da Ie County School Board have planned for tax increases.
Bl DGET ALTERNATIVES AND RECOMMENDATIONS
There are two baseline options: adopt the rolled-back rate of 7.197 which will not maintain basic
ser 'ic,~ levels and require additional, significant across-the-board budget reductions; or maintain the
cur'ent millage rate of 7.499 which will be sufficient to maintain basic service levels in the ensuing
fiscal year. In addition, you may select any millage rate up to the constitutional cap of 10 mills.
Thl. A.dministration recommends that you adopt 7.499 mills to maintain basic service levels.
Ho'vever, it must be noted that any rate below 7.499 will require additional reductions from a
bas c ~:ervice level.
FUST PUBLIC HEARING
ThE first public hearing on the proposed millage rates and tentative budgets for Fiscal Year 1997/98
mw t be held no later than 80 days (September 18th) or earlier than 65 days (September 3rd) from
the;tart of the TRIM ("Truth In Millage") calendar (July 1st), Other guidelines are: 1) the public
heain~ cannot be scheduled on a Sunday or on those days utilized by Metropolitan Dade County
or t1 'le :Jade County School Board for their public hearings; and 2) if on a day other than Saturday,
themblic hearing must be after 5:00 P.M.
Bas .~d on these guidelines, the first hearing must be held between September 3rd and September
18tl. These dates are unavailable for the following reasons:
September 7, 14 Sundays
September 10 Dade County School Board Public Hearing
September 4, 18 Metropolitan Dade County Public Hearings
Of 1 he remaining days, it is recommended that the first public hearing be set for 5:01 P.M.,
Thu'sday, September 11, 1997 in the City Commission Chambers, City Hall, 1700 Convention
Cen er Drive, Miami Beach, Florida. Because no Commission meeting is set for that date, this will
be a sp ::cial meeting of the Commission.
I wi;h to take this oppOrtmllty to thank the Office of the Budget, the Finance Department, the
Deputlnent Directors, Assistant City Managers, and all City personnel that worked so diligently on
this mdget. The Administration looks forward to continued assistance from the Budget Advisory
Corr mittee, the City Boards and Committees, and community groups upon release of the Proposed
Bud:~et and at the public hearings to be held in September.
FJ: 1.$97/98 Proposed Millage Rate
Jui v 16, 1997
Pa 'e . 7 -
l.
TEl E UNRAVELING OF THE PORTOFINO TRANSACTION
On Jlne 20, 1997, the Portofino entities served upon me a Notice of Termination of the
De'elopment Agreement previously entered into between the City and these entities. If unabated,
that telmination, as has been previously and repeatedly discussed, will eliminate planning and design
eler lents negotiated with Porto fino, and will result in the loss of significant acreage that would have
bec JIT e public under the terms of the Development Agreement. Most importantly for the City's
fimncl~s, it will require significant future expenditures by the City.
The Administration is in the process of finalizing a financial impact analysis of the likely
con:equences of the termination of the aforesaid Development Agreement. That analysis, though
not yet complete, has made it clear that most of the required expenditures attendant to said
tern .in.ltion will fall in or can be postponed until FY1998/99 and several later fiscal years.
To he extent that expenditures may be required in FY1997/98, they should not exceed several
mill ons of dollars, and can therefore be fmanced through a "bridge loan" from the City's investment
portullo (e.g., the $46.5 million received from the County in June,1996), thereby effectively
post:>oling the impact until the next fiscal year. In addition, the consequences of the subject
tern inHtion will not become clear for some time, and that uncertainty further requires that this
prucen: approach be implemented.
JGP J(:KRW