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95-21716 Reso • RESOLUTION NO. 95-21716 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING A TENTATIVE AD VALOREM MILLAGE OF 7.568 MILLS FOR GENERAL OPERATING PURPOSES, WHICH IS FOURTEEN AND A QUARTER PERCENT (14.25%) GREATER THAN THE "ROLLED-BACK" RATE OF 6.624 MILLS, AND 1.862 MILLS FOR DEBT SERVICE FOR THE CITY, FOR FISCAL YEAR 1995/96, SUBJECT TO A SECOND PUBLIC HEARING AT 5:01 P.M. , WEDNESDAY, SEPTEMBER 27, 1995. BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that, pursuant to Section 200.065, Florida Statutes, there is hereby levied a tax for the Fiscal Year 1995/96, 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 7.568 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 fourteen and a quarter percent (14.25%) greater than the "rolled-back" rate of 6 .624 mills. (b) For the purpose of providing payment on the principal and interest portions of the General Obligation Bond Debt outstanding, the rate assigned amounts to 1.862 mills. (c) The tentative adopted millage rates for the City of Miami Beach, Florida for FY 1995/96 is subject to a second and final public hearing at 5:01 p. m. , Wednesday, September 27, 1995, in the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miam' Beach, Florida. PASSED and ADOPTED this 13th day of - , -+(.54 1995. -.44, a . ATTEST: FORM APPROVED LEI., DEPT. Y CLERK By /dj j Date `U h. t. . CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139 COMMISSION MEMORANDUM NO. LI SC1 q s TO: Mayor Seymour Gelber and September 13, 1995 Members of the City Commission DATE: P FROM: Jose Garcia-Pedrosa City Manager SUBJECT: A RESOLUTION • 'OPTING: 1) THE TENTATIVE AD VALOREM MILLAGE OF 7 .568 MILLS FOR GENERAL OPERATING PURPOSES WHICH IS FOURTEEN AND A QUARTER PERCENT (14.25%) GREATER THAN THE "ROLLED BACK" RATE OF 6.624 MILLS; 2) THE DEBT SERVICE MILLAGE RATE OF 1.862 MILLS; AND, 3) SETTING 5: 01 P. M. , WEDNESDAY, SEPTEMBER 27, 1995, FOR THE SECOND PUBLIC HEARING TO CONSIDER THE MILLAGE RATE AND BUDGET FOR FISCAL YEAR 1995/96 . RECOMMENDATION: The Administration recommends that the City Commission adopt the attached Resolution which sets the following: 1) Tentatively adopted millage rates for FY 1995/96 General Operating 7 . 568 mills ( 7 .143 last year) Debt Service 1 . 862 mills ( 2 . 039 last year) Total 9.43 mills ( 9 . 182 last year) 2) The tentatively adopted millage rate of 7 .568 mills is 14 .25% greater than the "rolled-back" rate of 6 . 624 mills. 3) The second public hearing to consider the final millage rates and budgets for FY 1995/96 shall be at 5 : 01 p.m. , Wednesday, September 27, 1995 in the City Commission Chambers, City Hall, 1700 Convention Center Drive. PROCEDURE Florida Statutes 200 . 065, requires that at the conclusion of the first public hearing on the proposed tax rate and budget, the City Commission proceed in the following specific manner: 1 . Adopt a tentative ad valorem millage rate for FY 1995/96 operating purposes . AGENDAITEM 6'3-5_ I DATE _I — 3- 95 • Tentative Operating and Debt Service Millages September 13 , 1995 Page - 2 - This is accomplished by adopting a Resolution that includes the percent increase or decrease over the "rolled back" rate; the required Debt Service millage rate; and, the date, time, and place of the second public hearing. Further, this Resolution must be read aloud, in its entirety, prior to adoption. 2 . Adopt a tentative general operating budget for FY 1995/96 . Also included, are budgets for the Enterprise and Internal Service Funds . This is accomplished by adopting a companion Resolution. (See accompanying Agenda Item R-3/S . 2) . Both the millage and budget Resolutions must be adopted again after a second and final public hearing. Procedurally, a millage either greater than or less than 7 . 568 mills may be adopted at this first hearing. However, any millage rate adopted at the end of either the first or second public hearings which exceeds the millage rate of 7 . 568 mills established in July, 1995, and certified to the Property Appraiser, would require mailing of a revised notice of property taxes to each taxpayer. The notice would be prepared by the Property Appraiser. at the expense of the taxing authority, and must precede the final hearing by 10 to 15 days. ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH The fundamental building block in developing a municipal budget is the establishment of the value of one mill of taxation. A mill of taxation is defined as $1 . 00 of ad valorem tax for each $1, 000 of property value. It is against this value that the millage rate is applied to determine the total dollars of ad valorem tax available . On July 1, 1995, we received the 1995 Certification of Taxable Value from the Dade County Property Appraiser, containing the assessed real and personal property values in our City. The preliminary, current-year, gross taxable value of both real and personal property for 1995 is $5, 741, 086 , 882, including $35, 595, 281 for new construction. This represents an increase of 8 . 5% over the prior year' s final gross taxable value of $5, 290 , 822, 793 . Alternately, the preliminary value for 1995 of $5 , 741, 086 , 882 Tentative Operating and Debt Service Millages September 13 , 1995 Page - 3 - exceeds the preliminary 1994 value of $5, 424 , 903 , 954 by $316 , 182 , 928, or 5 . 8% . Comparing 1994 ' s preliminary value of $5, 424, 903 , 954 to its final value of $5, 290 , 822, 793 yields a decrease of $134 , 081, 161, or 2 . 5% . This is attributed to equalization losses and appeals. Amendment 10 to the Florida Constitution, known as "Save Our Homes" , was enacted to limit the annual increase in assessed value on homesteaded property to the lesser of three percent (3%) or the Consumer Price Index (CPI) . The impact has been realized for the first time in the 1995 assessed valuations utilized in this budget document. As such, homesteaded property values were capped at 2. 7t, the CPI increase, by the Property Appraiser in accordance with Amendment 10. The present value of one mill for the City of Miami Beach has increased from its final value of $5, 290, 823 in 1994 to is preliminary value of $5, 741, 087 in 1995 . Statutorily, a mill cannot be discounted to any value less than 95% . As permitted by state statute, the City of Miami Beach discounts its mill to 97% for a value of $5, 568, 854 . Of the two Redevelopment districts within the City, South Pointe and City Center, South Pointe received a larger assessment value increase than City Center. South Pointe increased by $29, 742 , 531, or 10 . 2%, from $290, 495, 574 to $320 , 238, 105 . City Center increased by $20, 897, 955, or 4 .4%, from $470, 779, 626 to $491, 677, 581 . DETERMINING THE OPERATING MILLAGE LEVY AND AD VALOREM TAXES Given the current year' s operating budget, directives from the Commission, City boards, committees, and residents, and input from the Budget Advisory Committee (BAC) , on July 26 , 1995, the Commission set the operating millage rate at 7 . 568 mills . Several factors influenced this recommendation and are detailed below. This millage rate will provide service level enhancements totaling approximately $1 . 3 million in the areas of police, code enforcement, parks and recreation, and property management, and a modest contribution totaling $1,494 , 548 to fund balance . Given current year trends which forecast an operating deficit in the current year of approximately $3 .2 million, a contribution to restore fund balance to prudent levels is wise . (See related Agenda Item R-8/E on current year-end revenue and expense projections as of July 31, 1995 for details) . Tentative Operating and Debt Service Millages September 13 , 1995 Page - 4 - Combining these factors resulted in the City Commission setting an operating millage rate of 7 . 568 mills which is fourteen and a quarter percent (14 .25%) greater than the calculated current year roll-back millage rate of 6 . 624 mills . This equates to an additional $1, 617, 266 in ad valorem tax proceeds available in FY 1995/96 and constitutes only the second increase which our City has had during the last five years . The prior year tax increase advertised was 5 . 0 %, for which additional services and enhancements were provided as directed. It is also important to note that the proposed budget, in contrast to the current year' s budget, does not include any revenues from the sale of City owned property, because we believe that the sale of realty should not be used to pay for recurring expenditures . Hence, the proposed millage rate is 7 . 568 and will yield $42, 197, 505 in ad valorem revenues to the General Fund. Comparing that number to the current year' s proceeds of $36 , 658 , 577 shows additional proceeds of $5, 538, 928, or a 15% increase. DETERMINING THE DEBT-SERVICE MILLAGE LEVY Debt-service millages must be approved by the voters . As such, the payment for FY 1995/96 is set at $10, 368, 286 and requires a tax rate of 1 . 862 mills to support itself . In keeping with the tenets set forth in the City' s Five-Year Financial and Operating Plan, debt-service must be fully self supporting and not be supplemented by reserves . The balance of unretired debt at September 30, 1995 for General Obligation Bonds, for which the full faith and credit of the City is pledged, is $51, 055, 000 . This principal is expected to be retired in full by the year 2003 . Looking to the future, the General Obligation Parks and Recreation Bond referendum for $15 million, approved by the voters last fall, will be felt for the first time during the 1996/97 fiscal year. The associated millage from incurring this debt will be calculated for that year' s budget, and a revised repayment schedule will be submitted in connection with the budget to be proposed for FY 1996/97 . COMBINING OPERATING AND DEBT-SERVICE LEVIES AND AD VALOREM REVENUES The combined millage rate for both operating and debt service for FY 1995/96 is illustrated below, with a comparative analysis between the final FY 1994/95 and the preliminary FY 1995/96 millages . • Tentative Operating and Debt Service Millages September 13 , 1995 Page - 5 - Tax Rate Tax Levy FY 94/95 FY 95/96 Inc/(Dec) FY 94/95 FY 95/96 Inc/(Dec) General Operating 7.143 7.568 0.425 $37,587,580 $42,197,505 $4,609,925 Debt Service 2.039 1.862 (0.177) 10.729.536 10,368,286 (361,250) TOTAL 9.182 9.43 0.248 $48,317,116 $52,565,791 $4,248,675 Should the tentative tax rates be adopted, the combined tax rate will increase by 0 . 248 mills, or 2 . 7% from the previous year as follows : the operating millage will increase by 0 .425 mills, or 6%, and the debt-service millage will decrease by 0 . 177 mills, or 8 . 7% . COMBINING JURISDICTIONAL OPERATING AND DEBT-SERVICE MILLAGE LEVIES A City of Miami Beach property owner remits taxes to the Tax Collector as a result of levies enacted by the City Commission, the County Commission, the School Board, the South Florida Water Management District (SFWMD) , and the Florida Inland Navigation District . In all, five agencies have the authority to levy property taxes on Miami Beach property owners . Miami Beach property owners contributed 37. 6 percent in FY 1992/93 , 34 . 7 percent in FY 1993/94 , and 32 . 1 percent in FY 1994/95 of their total tax bill to the City of Miami Beach. The balance was levied by the four other jurisdictions . The tentative millage rates for FY 1995/96 will make the Miami Beach portion of a total tax bill comparable to 33 . 0%, assuming that the millage rates shown are adopted by the four other jurisdictions . This table illustrates the current and proposed taxing rates for the taxing entities: Adopted Proposed % %of Taxing Jurisdiction FY 94/95 FY 95/96 Inc/(Dec) Change Total Miami Beach 33.0 General Operating 7.143 7.568 0.425 6.0 Debt Service 2.039 1.862 (0.177) (8.7) Dade County 27.9 Countywide Operating 7.253 6.828 (0.425) (5.9) Library 0.343 0.329 (0.014) (4.1) Debt Service 0.817 0.789 (0.028) (3.4) School Board 10.345 10.441 0.096 0.9 36.6 • Other 0.702 0.702 0.000 0.0 2.5 Totals 28.642 28.519 (0.123) (0.4) 100.0 • Tentative Operating and Debt Service Millages September 13 , 1995 Page - 6 - Assuming that these tax rates are enacted, Miami Beach property owners will pay $20, 413 less to Dade County and $3 .7 million, or 6 .8%, more to the School Board. It is to be noted that at the same time that property owners ' contribution of tax dollars to the City has declined from 37 . 6 cents in FY 1992/93 to a proposed 33 . 0 cents in FY 1995/96, the tax contribution to the School Board continues to increase to 36 . 6 cents out of every tax dollar. In FY 1995/96, $58 . 1 million will go to the School Board, $50 . 9 million will go to Miami Beach, $44 .3 million will go to Metropolitan Dade County, and $3 . 9 million will go to the SFWMD and the Florida Inland Navigation Districts combined. Adopting a suggestion by the BAC on the proposed decrease in the County millage rate, the Administration proposes to take this 0 .425 decrease and shift it to the City' s budget to fund various City services and restore fund balance to prudent levels. The overall tax rate for a Miami Beach homeowner is 28 . 519 mills, or 0 . 123 mills less than the current year -- a reduction of less than 1% . COMBINED MILLAGE LEVY IMPACT ON THE HOMEOWNER The impact of these combined millages into tax payments for a homesteaded property whose taxable value in 1994 was $100, 000 is demonstrated below. This net taxable value assumes that the homeowner has a credit for the $25, 000 homestead exemption and that the assessed value of the homesteaded property was limited to a 2 . 7% increase from the provisions of Amendment 10 . Taxing Tax Bill Jurisdiction per$100.000 Miami Beach $50.26 Dade County (25.25) School Board 37.79 Other 1.90 Totals $64.70 At a 7 . 568 millage, the total dollars paid annually for both operating and debt service to the City would increase by $50 .26, or just over $4 . 00 per month. The key and critical component which deserves honorable mention here is the fact that although the total tax bill has increased slightly, the Miami Beach homeowner will gain in- services received for dollars spent in the five • • Tentative Operating and Debt Service Millages September 13 , 1995 Page - 7 - aforementioned quality-of-life areas of police, fire, code enforcement, parks and recreation, and property management -- with specified performance criteria against which to measure the results of the increased expenditures . In addition, utilizing the County' s decrease of 0 .425 mills keeps more of our tax dollars within our corporate limits, for use by the homeowners of Miami Beach. This will also provide our homeowners with a greater opportunity to determine how these tax dollars are spent . SECOND PUBLIC HEARING The second public hearing on the tentatively adopted millage rate and budget for Fiscal Year 1995/96 must be held no later than 15 days after the first public hearing. It is recommended that the second public hearing be set for 5 : 01 p.m. , Wednesday, September 27, 1995 in the City Commission Chambers, City Hall, 1700 Convention Center Drive. CONCLUSION The Administration recommends adoption of the attached Resolution which sets both tentative operating and debt service millage rates for FY 1995/96 and establishes a second public hearing to be held on September 27, 1995, at 5 : 01 P. M. JGP:PFL:DJJ:me