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FY 11-12 Budget Presentation 1st Hearing-9-14-11 QA1MIAMIBEACH PROPOSED FY 2011/12 OPERATINGBUDGET September 14, 2011 2 FY 2011/12 Budget Development Process began early and is ongoing •May Commission retreat •FCWPC Meetings •June 29 •July 28 •July 29 •Commission Budget Hearings •September 14 •September 27 3 FY 2011/12 General Fund Budget Highlights •Represents more than $63 million in reductions in predominantly recurring reductions over the last 5 years •General operating millage rate is kept flat,and remains 1.2 mills below FY 2006/07 when property values were at a similar level –resulting in a net tax levy reduction of $29 million •3 percent more than in FY 2006/07,in spite of 13 percent growth in the Consumer Price Index (CPI)in a similar period,over 80 percent growth in pension costs,and many new facilities and projects coming on line 4 FY 2011/12 General Fund Budget Highlights •Property tax revenues represent less than half of the total funding for the General Fund budget,as compared to 59 percent in FY 2006/07 Property Taxes $140,395,903 59 % All Other, $97,277,193, 41 %Property Taxes $111,397,825 45 % ,All Other $133,777,493 55 % FY 2011/12FY 2006/07 3 FY 2011/12 Budget Development Declines in values were modest: •0.6 percent Citywide and 0.8 percent outside the City Center Redevelopment Area –as compared to 10 percent Citywide last year Jan. 1 2011 Value (in billions) As of July 1 2010 (For FY 2010/11 Budget) As of July 1 2011 (For 2011/12 Budget) $ (in billions)% RDA – City Ctr $ 3.4050 $ 3.4234 $ 0.0184 0.5% South Pointe 3.3242 3.4460 $ 0.1219 3.7% General Fund 15.3756 15.1089 $ (0.2667)-1.7% Total Citywide $ 22.1047 $ 21.9783 $ (0.1265)-0.6% Citywide Net of City Ctr $ 18.700 $ 18.555 $ (0.1448)-0.8% Change from 2010 Value (Budget) Jan. 1 2010 Value (in billions) 6 FY 2011/12 Proposed Millage Rate Operating Millage Maintained at Current Level FY 06/07 FY 10/11 FY 11/12 Inc/(Dec) From FY10/11 From FY 06/07 Operating 7.1920 6.1072 6.1072 0.0000 Capital Renewal & Replacement 0.1820 0.1083 0.1083 0.0000 Total Operating Millage 7.3740 6.2155 6.2155 0.0000 0.0%-16% City of Miami Beach Millage Rates % Inc/(Dec) 7 FY 2011/12 Budget Development •Since peak in FY 2007/08,property values declined more than $4.9 billion •Despite almost $3 billion in new construction •Proposed General Fund property tax revenues are approximately $29 million (21 percent)below budgeted FY 2006/07 levels •FY 2006/07 $140.3 million •FY 2011/12 (Proposed)$111 .4 million 8 FY 2011/12 Proposed Millage Rate Debt Service Millage Set at Level Required to Pay General Obligation Debt Service Prior year Debt Service Millage reflects the change in millage as values change -FY 2006/07 0.2990 -FY 2007/08 0.2415 -FY 2008/09 0.2375 -FY 2009/10 0.2568 -FY 2010/11 0.2870 FY 06/07 FY 10/11 FY 11/12 Inc/(Dec) From FY10/11 From FY 06/07 Debt Service 0.2990 0.2870 0.2884 0.0014 0.5%-3.5% City of Miami Beach Millage Rates % Inc/(Dec) Formula for Debt Service Millage Calculation: FY 2011/12 Debt Service Payment Divided By 1/1000 of 2011 Taxable Value at 95 percent = $6,021,612 / $20,879,375 = 0.2884 9 FY 2011/12 Proposed Millage Rate •Combined millage rates remain almost 1.2 mills (16 percent) lower than FY 2006/07 when property values were similar to FY 2011/12 •Combined millage rate overall 2.2 mills (28 percent) lower than in FY 1999/00 10 FY 2011/12 Budget Development •Despite this significant reduction,the City continues to focus on priorities identified by the community: •Public safety,cleanliness,landscaping and beautification •recreation and cultural arts programming •renewal and replacement funding for our facilities,building/development functions •structural changes that enhanced capital funding and reserves 11 FY 2011/12 Proposed Millage Rate Overlapping Jurisdictional Operating and Debt Service Millage Levies Variance from 10/11 Variance from 06/07 City of Miami Beach Millage Rates Operating 7.1920 6.1072 6.1072 0.0000 -1.0848 Capital Renewal & Replacement 0.1820 0.1083 0.1083 0.0000 -0.0737 Subtotal Operating Millage 7.3740 6.2155 6.2155 0.0000 -1.1585 Voted Debt Service 0.2990 0.2870 0.2884 0.0014 -0.0106 Total 7.6730 6.5025 6.5039 0.0014 -1.1691 31% Miami Dade County Countywide 5.6150 5.4275 4.8050 -0.6225 -0.8100 Library 0.4860 0.2840 0.1795 -0.1045 -0.3065 Debt Service 0.2850 0.4450 0.2850 -0.1600 0.0000 Subtotal 6.3860 6.1565 5.2695 -0.8870 -1.1165 25% School Board 8.1050 8.2490 8.0050 -0.2440 -0.1000 39% Children's Trust 0.4220 0.5000 0.5000 0.0000 0.0780 2% Other 0.7360 0.6585 0.4708 -0.1877 -0.2652 3% Total 23.3220 22.0665 20.7492 -1.3173 -2.5728 100% FY 10/11OVERLAPPING TAX MILLAGE FY 11/12 % of FY 11/12 TotalFY 06/07 12 FY 2011/12 Budget Development – Current Service Level Revenues Increased by $5.6 million $1.6 M Licenses and permits revenues $0.5 M Intergovernmental receipts (sales tax, etc.) $0.3 M Charges for services (golf course revenues) $1.1 M Rents and leases $0.4 M Miscellaneous revenues - reflecting a new beverage sponsorship revenues offset by unrealized commercial banner revenues $3.6 M Use of additional prior year surplus from the parking fund Offset by: $0.8 M Decline in property tax revenues $0.4 M Decline in utility taxes,interest earnings, and admin. charges to Enterprise Funds - net of $1 million increase in electrical franchise fees from proposed new agreement $0.6 M Decreased fines primarily due to red light camera revenues $0.1 M Decrease in use of General Fund surplus from prior years 13 FY 2011/12 Budget Development – Current Service Level Expenditures Increased by $9.6 million $1.9 M primarily due to previously bargained salary adjustments $0.3 M primarily due to increases in Police overtime $4.2 M pension increase in General Fund $2.8 M health insurance increases, including the expiration of the Police and Fire additional 5% contribution to offset City health costs $1.1 M Internal Service Charges and Capital primarily due to similar personnel costs increases and fuel increases Offset by: $0.7 M Decreases in operating costs 14 FY 2011/12 Approaches to Balance $5.6 million increase in revenues -$9.6 million increase in expenditures = $4 million gap –Addressed below $0.4 million Efficiencies and Reductions $2.1 million Expenditures more appropriately funded from Resort Tax Fund $2.0 million Increased transfers from Resort Tax to the General Fund This leaves approximately $0.5 million of revenues in excess of expenditures $0.3 million Service Enhancements $0.1 million Living Wage adjustments $0.1 million Additional Contingency Note: the Revenues include the use of $3.55 million in General Fund prior year surplus that will not be recurring for FY 2012/13 15 FY 2011/12 Approaches to Balance General Fund Efficiencies and Reductions Description $ Impact FT Positions PT Positions Replace a Police captain with a sergeant position (52,755) Eliminate One (1) Full Time vacant -Municipal Service Trainee in Parks and Recreation as functions have been absorbed by other positions (24,334)(1.0) Revise allocation for Tourism & Culture Director (35%) and Administrative Support (15%) to charge to Convention Center (64,997)(0.5) Convert 1 vacant full-time Procurement coordinator position to part-time (45,388)(1.0)1.0 Replace Human Resource Specialist w/FT OA IV and professional services (15,796) Eliminate funding for County lobbyist (75,000) Impact of Internal Service Fund Reductions on the General Fund (90,046) In addition to almost $0.6 million in efficiencies/reductions in Enterprise Funds 16 FY 2011/12 Approaches to Balance Enhancements Description $ Impact FT Positions PT Positions Landscape Maintenance for South Pointe Phases II and III-V rights-of-way projects coming on line 159,000 Enhance Capital Project supervision by adding 2 pool cars offset by charge-backs to capital projects 41,400 Provide supplementary cost estimating and project support through outside contractual service offset by charge-backs to capital projects 34,500 Enhanced services to homeless individuals by adding part- time workers in the Entertainment District Tuesdays through Saturdays 89,492 3 Impact of Internal Service Fund Enhancements on the General Fund (40-year re-certifications and Beach Shower Drainage and Maintenance)96,250 In addition to almost $0.45 million enhancements in Enterprise Funds for expanded contracted call center for Water and Parking,enhanced dispatch operations for Parking,and enhanced sanitation for Parking lots and garages,and $0.45 million for enhanced security and maintenance in the Redevelopment Area 17 FY 2011/12 General Fund Budget •Salaries and benefits, represent approximately 72 percent, of the FY 2011/12 proposed budget General Fund Expenditures Salaries $101.45 $101.28 41% Overtime/Other Wages 12.64 10.72 4% Benefits Pension - F&P 35.60 35.60 15% Pension - MBERP 10.97 10.97 4% Other Pension Costs 5.80 5.80 2% Health and Life 9.16 9.14 4% Other Benefits 4.04 4.04 2% Total Benefits 65.57 65.55 27% Total Salary and Benefits 179.66 177.55 72% Operating 27.05 27.21 11% Internal Service Funds 36.18 36.19 15% Capital & Debt 4.18 4.23 2% Total 247.07$ 245.18$ 100% % of FY 2011/12 Proposed Budget FY 2011/12 Proposed Budget (in millions) FY 2011/12 CSL Budget (in millions) 18 FY 2011/12 General Fund Budget Expenditure Category FY 2011/12 Proposed Budget % of Budget Mayor & Commission 1,584,212$ 0.6% Administration 13,738,063 5.6% City Attormey 4,160,237 1.7% Building, Economic Dev & Cultural Arts 17,503,048 7.1% Operations 43,971,743 17.9% Public Safety 151,272,208 61.7% Citywide Accounts 10,278,555 4.2% Transfers 911,500 0.4% Capital Renewal & Replacement 1,755,752 0.7% Total 245,175,318$ 100.0% Public Safety continues to be the major component of the General Fund Budget, increasing from 50% in FY 2006/07 to approximately 62% in the proposed FY 2011/12 budget 19 FY 2011/12 General Fund Budget Proposed FY 2011/12 General Fund Budget $’s Major Drivers Revenues $245.18 Million •Reduction in Property Tax Revenues •Increased Use of Parking Surplus •New FPL Franchise Agreement •Improving Economy •Resort Tax Transfer •Rents and Leases •Licenses and Permits •Golf Course Revenues •Other •Beverage Sponsorship Expenditures $245.18 Million •Pension Increases •Health Care Increases •Contractual increases in Personnel Costs •Decreases in Operating Costs •Special Event Expenses Moved to Resort Tax Fund 20 FY 2011/12 General Fund Budget As requested by the Commission in prior meetings, the following represent opportunities to reduce the millage Potential Reduction $ Impact Millage Impact Eliminate the additional contingency derived during the balancing of the General Fund operating budget (89,155)$ (0.005) Reduce Contingency Funding in the FY 2011/12 Information and Technology Fund Transfer (114,115)$ (0.006) Reduce Police overtime by $300,000 out of $3.3 million in General Fund overtime (300,000)$ (0.017) Change Ocean Rescue Division Schedule to 5 days per week/8 hours per day on a year round schedule (400,000)$ (0.022) Total (903,270)$ (0.050) 21 QUESTIONS & ANSWERS