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LTC 015-2025 Fiscal Impact of Miami-Dade County Office of the Tax Collector's Transition to a Fee Office MIAMI BEACH OFFICE OF THE CITY MANAGER LTC #015-2024 LETTER TO COMMISSION TO: Honorable Mayor Steven Meiner and Members of the City Commission FROM: Eric Carpenter, City Manager DATE: January 13, 2025 SUBJECT: Fiscal Impact of Miami-Dade County Office of the Tax Collector's Transition to a "Fee Office" The purpose of this Letter to Commission (LTC) is to inform the Mayor and City Commission about a recent communication from Miami-Dade County's Office of the Tax Collector regarding its decision, as a new elected office, to transition to a "Fee Office" and the anticipated fiscal implications for the City's FY 2026 budget. On December 20, 2024, the City received the attached letter, which details the Tax Collector's election to operate as a "Fee Office" under the provisions of Florida Statute 192.091(2). Effective October 1, 2025, the Office of the Tax Collector will begin imposing a 2% commission on the total amount of real and tangible personal property taxes and special assessments collected and remitted within Miami-Dade County. In accordance with state law, any surplus commission collected will subsequently be redistributed to the City. This will affect all municipalities within Miami-Dade County. Based on the Certified Taxable Values as of July 1, 2024, the Tax Collector's Office estimates that the FY 2025 commission would have amounted to approximately$4.5 million. Consequently, the City must plan for an increase of upwards of $4.5 million in budgeted expenditures starting with the FY 2026 budget. Additionally, this development coincides with other significant changes to the City's taxable property values, including the recent passage of Amendment 5 by voters in November 2024. This amendment increases the homestead property exemption, further constraining the growth of taxable property values for the upcoming fiscal year. As a result, it is crucial to exercise caution when considering mid-year adjustments to the FY 2025 budget outside the standard budgetary process. The Administration will provide additional updates during the FY 2026 budget process. Should you have any questions or require further clarification, please contact Tameka Otto Stewart, Director of the Office of Management and Budget, at tamekaottostewart@miamibeachfl.gov. Attachment A: Letter from the Miami-Dade County Office of the Tax Collector JDG/TOS Attachment A: Letter from the Miami-Dade County Office of the Tax Collector Miami-Dade County MIAMIaDADE Office of the Tax Collector + 200 NW 2`1 Avenue Miami,FL 33128 T 305-375-1521 Ch-e.Andinogmianiidade.gov Daniella Levine Cava,Mayor miamidade.gov December 20, 2024 Steven Meiner, Mayor City of Miami Beach 1700 Convention Center Drive Miami Beach, FL. 33139 Re; Implementation of commission structure for Ad-Valorem tax collection Dear Mr. Meiner, As a result of the Florida Constitution Amendment 10 passing in 2018,the Miami-Dade County Office of the Tax Collector will become an independent constitutionally elected office on January 71h,2025. For the remainder of Fiscal Year(FY) 2024-25, the Office of the Tax Collector will continue to operate under the budget approved by the Miami-Dade Board of County Commissioners. Effective October 15t,2025,the Office of the Tax Collector will become a "Fee Office"and will be funded through commissions and fees established under Florida State Statutes. in accordance with Florida Statute 192.091(2), the Office of the Tax Collector will begin charging a commission on the amount of all real and tangible personal property taxes and special assessments collected and remitted in Miami-Dade County. Because this change will have an impact on your FY 2025-26 budget development process,we are providing this advance notice to provide sufficient time to adjust your budgets to address the reduction in tax proceeds your municipality will receive. To help you project the impact this change will have, we have included a projected commission impact report, which is based on the distributions completed from November 1", 2024 through December loth, 2024. we will continue to provide additional impact reports as we get closer to this change. Any unused commission collected by our office will be reallocated and distributed to the respective taxing authorities as mandated by state statute at the end of the fiscal year. If you have any questions regarding this change or require further clarification,please do not hesitate to contact our office. Thank you for your attention to this matter. Respectfully, Gerardo Gomez, Interim Direc Miami-Dade County Office of the_Tax Collector N � r N t- (ND OD ? N ') e- CV CM Co to 1C h 4 cy r O 00 N to ti � Q — x 0 0 v 04 a It C. d E _ c � c o O Clolqt r *° r c`v E q. It NN � N O o O N N A N N N N N Q 1 °' °' N r 9 : 0 a V- T• Vcl C � Z Lo �} CIS ap _ 00 �v N ti .. 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