Resolution 2025-33718 RESOLUTION NO. 202533778
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE
RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY
COMMITTEE, AT ITS JUNE 4, 2025 MEETING, TO REFER THE MIAMI
BEACH COMPREHENSIVE FINANCIAL POLICIES TO THE BUDGET
ADVISORY COMMITTEE FOR REVIEW AND ANALYSIS.
WHEREAS, on October 30, 2024, the Mayor and City Commission referred Item
C40 to the Finance and Economic Resiliency Committee (FERC)to discuss the creation
of a Comprehensive Financial Policy for the City of Miami Beach; and
WHEREAS, the Government Finance Officers Association (GFOA) strongly
advocates for the adoption of formalized financial policies, recognizing their critical role in
supporting strategic and sustainable financial management; and
WHEREAS, the City Administration recommends consolidating all previously
issued Commission directives on financial policies into a single, comprehensive
framework to streamline policy implementation, enhance transparency, and ensure
alignment with the City's long-term financial goals; and
WHEREAS, on June 4, 2025, the FERC recommended that the item return to the
full City Commission to consider a request for a referral of the Miami Beach
Comprehensive Financial Policies to the Budget Advisory Committee, along with an
analysis of total compensation as a percentage of the General Fund budget.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approve the recommendation of the Finance and Economic
Resiliency Committee, at its June 4, 2025 meeting, to refer the Miami Beach
Comprehensive Financial Policies to the Budget Advisory Committee for review and
analysis.
PASSED AND ADOPTED this d�day of June 2025.
ATTEST:
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IUN 3 0 2f12� Steven Meiner, Mayor
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��el E. ranado, Cdy Clerk �eNd�-B�c.,
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Resolutions-C7 1
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members o(the City Commission
FROM: Enc Carpenter, City Manager
DATE: June 25, 2025
TITLE: A RESOLUTION OF THE MAYOR AND CIN COMMISSION OF THE CITY OF
MIAMI BEACH ACCEPTING THE RECOMMENDATION OF THE FINANCE AND
ECONOMIC RESILIENCY COMMITTEE TO REFER THE MIAMI BEACH
COMPREHENSIVE FINANCIAL POLICIES TO THE BUDGET ADVISORY
COMMITTEE FOR REVIEW AND ANALYSIS.
RECOMMENDATION
The City Administration ("Administration") recommends that the Commission accepts the Finance and
Emnomic Resiliency Committee's("FERC'or"Committee")rerommendation to a repues[of a referral of
the Miami Beach Comprehensive Financial Policies to [he Budget Advisory Cammittee along wi[h an
analysis of total mmpensation as a percentage of [he General Pond budget and m retum to FERC for
further discussian.
BACKGROUNDIHISTORY
On October 30,2024,the Mayor and Ciry Commission("City Commission")referred Item Ca0 to the FERC,
to discuss the creation of a Comprehensive Financial Policy for the Ciry of Miami Beach.
On lune 4,2025,the FERC remmmended the item retum to Commission to consider a request of a refeval
of the Miami Beach Comprehensive Financial Policies to the eudget Advisory Committee along with an
analysis of total rompensation as a percentage of the General Fund budget and to retum to FERC for
further discussioa As part of the discussion at FERC, it was recommended that a policy be added to have
all impact fees periodically reviewed by the Administration. That remmmendation is included in the
attached version of the policies.
ANALYSIS
The Govemment Finance Officers Association (GFOA)sVongly advocares for the adoption of formalized
financial policies, recognizing their critical role in supporting strategic and sustafnable financial
management. By implementing mmprehensive written policies, governments can enhance fiscal
discipline, ensure consistency in decisiommaking, and position themselves for long-term success. These
policies serve as a robust framework to guide financial practices providing a dear roadmap[hat empower
govemments to:
• Institu[ionalize good financial management practires - Formal policies usually outlive [heir
crearors, and, [hus, promoce sta6ility and mntinuity. They also preven[ the need ro re-invent
responses to recurring issues.
• Qarifyandcrystallirestrategicintentforfinancialmanagement-Financialpoliciesdefineashared
understanding of how the organization will develop its financial Orac[ices and manage its
resources to provide the best value to the communiry.
629
• Define 6oundaries - Financial policies define limits on the ac[ions staff may take. The policy
(ramework provides the 6oundaries within which staff can innovate in order ro realize the
organization's stretegic intent.
• Support good 6ond ratings and thereby reduce the cost of borrowing.
• Promate long-term and strategic thinking - The stra[egic intent articulated hy many financial
policies necessarily demands a long-term perspective from the organization.
• Manageriskstofinancialcondition-Akeycomponentofgovernanceacmuntabilityisnottoinmr
excessive risk in the pursuit ot public goals. Financial policies identify important risks to financial
condition.
• Comply with established pu6lic management best practices - The Govemment Finance Officers
Association (GFOA), through its officially adopted Bes[ Practices endorsement of National
Advisory Council on 5[ate and Local Budge[ing �NACSLB� budget praRices and the GFOA
Distinguished Budget Vresentation Award Program, has remgnized financial policies as an
essential part of public financial management.
Over time, the City Commission has adopted numerous resolutions to establish guidance on critical
financial policies, addressing areas such as capital reserves, fund balance management, allocation of
nonrecurring revenues,utilization of annual surpluses,and funding strategies for capital projects.Certain
policies, su<h as the application of General Fund interest eamings toward capital projeRs, have been
em6edded within annual 6udget resolutions. Remgnizing Ihe need fot a more cohesive and efficient
approach, [he Adminis[ration recommends consolidating all previausly issued Commission directives on
financial policies into a single, mmprehensive fremework. This mnsolidation will streamline policy
implementation,enhance transparency,and ensure alignment with the City's long-[erm fnancfal goals.
The following is a lis[of Commission resolutions[ha[were used as the framework for the recommended
set of Financial Policies:
1. Resolutionp94-21258—ConformingActualBudgetExpenditurestotheAdopted8udge[
2. Resolution p96-22014 — Establishing of a Permanent Reserve for Contingencies in [he General
Fund
3. Resolution#9&22661—Establishingo(PermanentReserveforCon[ingenciesintheGenerelFund
�Amended)
4. Resolution C2002-24764—Capital Reserve Policy
5. Resolu[ion k200445697—Es[ablishing a Wpital Renewal and Replarement Fund
6. ResoWtion p2005-25832—Btablishing a Capital Renewal and Replacement Wnd(Amended�
7. Resolution q2006-26341 — Sta6ilization Funds, Fund Balance, Contingency Planning and Cash
Reserves, Use of Non-Recurring Revenues, and Capital Asset Acquisi[fon, Maintenance, and
Replacement
8. Resolution k2014-28543—Establishing of a Reserve in the Resort Tas Fund
9. Resolution q2016-29500—Use of lump sum payments
10. Resolution p2018-30629—Es[ablishing a Capital Pay-As-You-Go(PAVGO�Fund
17. Resolution#2019-30664—Esta6lishing of a Reserve in the Resort Tax Fund (Amended)
12. Resolu[ion#2019-30954—Updated General Fund Reserve Poliry
13. Resolution#2023d2647—Rerommendation to Commission on Recurring Grants every 3 years
14. Resolution N2026-33340—Updated General Fund Reserve Emergency Polity
Fiscal Resoonsibilitv Measures
On March 19, 2025, the City Commission approved a resolution, agenda item O AH, which directs the
Ciry Manager to work with the Chief Financial Officer to identi(y areas for possible implementation of
fiscal responsibility measures tha[would allow Por a more sustainable financial expendiNre traje<tory for
the Ciry without impacting the critical services provided to the community and to presen[a[FEftC as part
of the Ciry of Miami Beach Comprehensive Pinancial Policies.
630
Regarding fiscal responsibility and strategic budgeting,a pragmatic approach could involve a combination
o(strategic ezpenditure reduc[ions, revenue optimiza[ions,and mst-containment measures. Noting that
recurring items impact the FV 2026 budget and one-time items reduce how much the City can transfer to
support capital projec[s at year end.
The Commission muld consider options such as:
• Transferring all or a percentage of projected surplus dollars (during [he budget development
process)over and ahove Ihe Current Service Level �"CSL") budget[o support capital projects until
the City can meet the 5%annual funding for capital needs goal and/or budgeting for addition to
reserves based on increase in the General Fund hudget
• EnactlegislationregardingaddingexpenditureslhatwillhaveafiscalimpaRoutsideoftheannual
budget process, with a requirement for a strategic discussion ot what program(s) rould be
eliminated/reduced, ar new revenues generated ro support anything appmved mid-year, unless
the City meets t6e 5%annual funding for wpital needs goal,requires FERC review,and/or requires
a super-majority vote
• Requirespecialeventfeewaiversandcertainsponsorshipsro6efornomorethanthree(3)years,
unless the event is scheduled during off-peak season
• Prioritize wre services and programs and assess which programs or erpenditures muld be
eliminated or scaled back
FISCAL IMPACT STATEMENT
N/A
Does this Ordinance reouire a Business Imoact Estimate7
(FOR ORDINANCES ONLY)
If applicable, the Business Impact Estimate (BIE)was published on:
See BIE at: https�llwww.miamibeachFl.aovlcitv-hall/citV-clerk/meetinq-noticesl
FINANCIAL INFORMATION
CONCLUSION
The City Administretion ("Administration"� recommends that the Commission accepts the Finance and
Ewnamic Resilienty Committee's("FERC" or"Committee")recommendation to a request of a referral of
the Miami Beach Comprehensive Financial Poli[ies ro the Budget Advisory Committee along with an
analysis of total mmpensation as a perrentage of [he General iund hudget and [o retum to FERC for
turther discussion.
Aooliwble Area
Citywide
Is this a "Residents Rioht to Know" ilem. Is this item related to a G.O. Bond
pursuant to CiN Cotle Section 2-17T Proiect7
No No
631
Was this Apenda Item initiallv reQuested bv a lobbvist which. as defined in Code Sec. 2481.
includes a orincioal enoaoed in lobbvino7 No
If so, specify the name o(lobbyist(s)and principal(s):
DeoaRmenl
Finance
Soonsor(s)
Commissioner Joseph Magazine
Cosoonsor(sl
Condensed Title
Accept Recom/Reter ro BAC - Miami Beach Comprehensive Financial Policies. (Magazine) FN
Previous Action IFor CiN Clerk Use Onlvl
632
EXHIBIT A
CITY OF MIAMI BEACH COMPREHENSIVE FINANCIAL POLICIES
The City of Miami Beach acknowledges that a primary factor to the long-term sound financial
management of its fnances is the adoption of formal financial policies lhal govern the financial
management and creditworthiness of ihe City. This view is supported by bond rating agencies,
residenis, and the Govemment Finance Offcers Association (GFOA). The following
Comprehensive Financial Policies are primarily intended to safeguard the fnancial resources o(the
Ciry.
General Fund BalancelContinqencv Plannina
1. The City of Miami Beach shall maintain the General Fund Emergency Reserve at hvo
(2) months of total expendiWres of the General Fund Opereling Budget ot the ensuing
fiscal year for use as defined below.
• Prior m any expenditures lrom this reserve, the Mayor and City Commission
must declare an emergency affecting life, health, property, or public safety and
authorize said expenditures by a six-sevenths (6/7)vote. After any expenditure
fmm said reserve, all reimbursements from Slale and Federal Agencies for
emergency reliet are to be redeposited into such reserve. Any amounts
disbursed which are not recovered from govemmental agencies shall be
appropriated from Unassigned Fund Balances of the General Fund to restore
ihe Emergency Reserve to its then established level.
• If there is an insuffcient Unassigned Fund Balance to restore said reserve to its
then established level, the Administration is directed to resmre the reserve to
ics appropriate level by transferring available General Fund revenues in excess
of expenditures at fiscal year-end and/or with a partial replenishment to be
spread over no more[han four (4) hudget years.
2. The City of Miami Beach shall have a goal to also maintain a General Fund
Contingency Reserve equal to one (1) month of fhe Generel Fund Operating Budget
that, in combination with the Emergency Reserve, represents three (3) months or
twenty-fve percent (25°/) of the General Fund Operating Budget expenditures for the
ensuing fscal year.
• Said Contingency Reserve shall he increasetl or decreased annually, based on
the ensuing fscal year's adopted budget. This does not preclude the
Commission from utilizing Ihe Contingency Reserve during the fiscal year. In
lhe evenl lhal this reserve falls below the goal, [he City shall restore the
Con[ingency Reserve [hrough various methods including using fiscal year-end
General Funtl surpWs, a prior fiscal year surplus over the required goal
identifed through annual e#ernal audit, or through [he ensuing fiscal yeais
surplus over the Cuvent Service Level (CSL) budget.
• If there is an insufficient Unassigned Fund Balance to restore said reserve to its
then established level, lhe Adminis[ration is direc[ed to reslore the reserve lo
its appmpriate level by transferring available General Fund revenues in excess
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of expendilures at fscal year-end and/or with a partial replenishment to be
spread over no more than four (4) budget years.
Resort Tu Fund BalancelContinaencv Planninq
1. The City of Miami Beach shall maintain a minimum Resort Tax Emergency Reserve in
the 2% Resort Tax Fund of two (2) months of total expenditures of Ihe ensuing fiscal
year for use as defned below.
• Prior to any expenditures from Mis reserve, the Mayor and City Commission
must declare an emergency affecting life, health, properry, puWic safery, or a
signifcant economic impad on resort tax collections, and authorize said
expenditures by a fve-sevenths (5/7) vote. The Administration is directed to
restore the reserve to its appropnate level by transferring available 2% Resort
Tax revenues in excess of expenditures at fiscal yearvend and/or with a partial
replenishment to be spread over no more than within four(4) budget years.
• Said Emergency Reserve shall be increased or decreased annually, based on the
ensuing fiscal year's adopted budget, but shall be maintained at a minimum
amount of two (2) months of total revenue of Ihe 2% Resort Tax of the then
existing Resort Tax Fund Budgel.
2. The City of Miami Beach shall have a goal to also maintain a Resort Tax Contingency
Reserve equal to four (4) months of the Resort Tax Operating Budget that, in combination
wilh the Resort Tax Emergency Reserve, represents siz (6) months or fifty percent (50%)
of the 2% Resort Tax Operating Budget expenditures for the ensuing fscal year.
• Said Resort Tax Contingency Reserve shall be increased or decreased, based
on the ensuing fswl year's adopted budget, annually,
Other Fund Balance/Continaencv Plannino
1. The City of Miami Beach shall have a goal to develop and maintain appropriate levels of
operating and capital reserves in the applicable Enterprise, Intemal Services, and Special
Revenues Funds.
2. The City of Miami Beach shall have a goal of maintaining a reserve of one hundred percent
(100%)of pending claims in the Risk Management Fund and shall strive ro fund two-thirds
(2/3)of the estimated value of insurance claims incurred but not reported.
Llee f Non-Rec�nina Revewe=_ -(All Fundsl
The City of Miami Beach will use one-time, non-rewrring revenue for capital expenditures andlor
on�time ezpenditures and not subsidize rewrring Oersonnel, operations, and maintenance costs.
�� of L mo S m Pa ment
The City of Miami Beach will allocate twenty percent (20°/) of any one-time, unrestricted cash
payment of$500,000 or more received by the City—such as proceeds trom lease renegotiations,
legal settlements, audit findings, or other lump sum paymen[s. These funds will be deposited inro a
designated trust fund to be used for capital expenses or olher one-lime costs related to
634
trensportation, excluding reasonable transactioo-related expenses and any other outstanding
obligations directly associated with the original paymen[.
Caoital Asset Aeouisition and Renewal and Reolacement(R6R)
1. CaoiWl Budoet Policv - The City staR will prepare a fv�year capital expenditure and
(unding plan (the"Capi[al Improvement Plan")for all relevant funds each fscal year.
The frst year of the CapAal Improvement Plan will constitute the budget for the respective
fiscal year. Annually and as part of the Capital Improvement Plan development process,
the City staff will prioritize Ihe budget expenditures recognizing the following criteria�.
• Regulatory compliance
• Safery
• Criticality of asset renewal and replacement
• Effciencies in joint project construction with other public agencies
• Availability of funding sources including grants, affordability, and other fac�ors
prescribed from time ta time
• Impact to the City's resiliency eNorts
• Expansion/New Facilities
2. Caoital Renewal and Reolacement Fund-The City shall maintain a datlicated portion of
the opereting millaqe for General Fund Capital Renewal and Replacement, which shall be
used for rapital projects that extend the useful life of the City's General Fund capital assets
and shall be limited to projects defned as follows:
• Projects Ihat erztend lhe useful li�e of an asset by at least 5 years with a threshold
value of at least $25,000; for example the replacement of a major component of
the asset such as roofs, HVAC systems, electncal systems, fire alartn systems,
sprinkler systams that due to significant deterioration would constrain ihe
remaining useful life of the capital asset or projects that signi(cantly reduce future
maintenance cost over the remaining life of the asset in an amouN that is greater
than the renewal and replacement costs of the pmject.
• The Mayoi and Commission may authorize atltlitional uses of the funds for
unfo�eseen or unanlicipated events affecting life, health, property, or public safety
subjed to a five-sevenths (5/7)vote.
• Appropriation of project specific expendiWres from ihe Capital Renewal and
Replacemenl Funtl shall be included in the City Manager's annual budget based
on an annual recommendation oF�he City Manager or his/her designee regarding
range of asset Irfe extended; iCentification of tulty depreciated or deteriorated
components of Ciry assets; inveMory requirements for large capital components
of assets; or reduction in mainlenance costs over the remaining life o!Ihe asset.
635
• Appropriation of project specifc expenditures shall be adopted by the Mayor and
City Commission.
• In[erest earnings that accrue in�he Capital Renewal and Replacemen[Fund shall
be included in the appropnation for the Fund in the following fscal year.
• Changes among project specific appropriations may be authorized by the City
Manager to the extent that no new projects be adtled, and the total annual
allocation is not exceeded.
• During a fscal year, changes b the total allocation and changes to the list of
projects to be funded f�om the Capital Renewal and Replacement Fund shall
require prior approval and authorization by a majority o/ the City Commission.
Ezcess project specifc appropriations not required will be available for
re-appropriation the following year.
• Project specific appropnations that are not expended in a given fscal year shall
remain in the Capital Renewal and Replacement Fund for[he life of the project.
3. Pav-As-You-Go Caoital Fund - The City shall maintain a dedicated portion of the
operating millage for Pay-As-You-Go Capi�al, which will provide dedica�ed funding (or
General Funtl capital projecGs and allow for grow[h over time wi�h property values.
• Appropriation of project specific expenditures shall be adopted by the Mayor and
City Commission.
• Interest earnings that acerue in the Pay-As-You-Go Capital Funtl shall be inclutled
in the appropriation for the Fund in the following flscal year.
• Changes among project specific appropriations may be authorized by the City
Manager to the ex[em that no new pmjeas be added, and the tolal annual
allocation is nol ezceetled.
• During a fiscal year, changes to the total allocation and changes lo Ihe list of
projeds to be funded from the Pay-As-You-Go Capital Fund shall require prior
approval and authorization by a majority ot the City Commission. Excess project
specific appropriations not required will be available for re-appropriation the
following year.
• Project speciFic appropriations ihat are not expended in a given fscal year shall
remain in the Pay-As-You-Go Capilal Fund for the life of Ihe projed.
4. SYAnnualFundinqforCaoiWlNeeds-TheCiryshallhaveagoaltofundtorthefollowing
capital needs as a permanent part of the budget, in an amount not less t�an five percent
(5%� of lhe annual fiscal operating butlget of the General Fund of Ihe City:
. Capital Renewal and Replacement Fund - to ensure adequate funding for the
renewal and replacement o(the City's General Fund facilities to eutend the useful life
or replace equipment whose useful li(e has expired.
. Capital Reserve Fund - to help ensure adequate funding related to previously
636
approved capital projects for expenditures due to bids that are over-budget, change
orders, orother unforeseen items for General Fund projects.
• Pay-As-You190 Capital Pund - to ensure adequate on-going reinvestment in capilal
plant and equipment and avoid deferring capital needs until there is a major bond issue.
. Information and Communications 7echnology Fund - to help ensure adequate
funding for the procurement o!new or enhanced information and technology needs o(
the City.
5. Use of General Fund Fiscal Year End Surolus — After fully funding the General Fund
reserve goals, the City shall transter to the Capital Reserve Fund 50% of the annual
General Fund revenues in excess o(expenditures with the remaining 50%to be transfertetl
to eilher ihe Capi[al Renewal and Replacement Fund or Pay-As-You-Go Capi[al Fund.
6. General Fund Interest Income for Caoital Proiects—The Ciry shall allocate twenty-�ve
percent (25%) oi the total projected interest income in the General Fund, starting in FY
2025, tor onedime capital expenditures. The Ciry shall have a goal to increase ihis
percentage by five (5) atlditional percent each subsequenl fscal year.
7. Review of ImDact Pees—The City shall periodically review all impad fees to ensure Ihat
the fees are equitable, reFlecl curtent economic conditions, and adequately fund the
necessary infrastructure improvements, as applicable. This review process will include an
analysis of the impact fees'eftectiveness in achieving the Citys goals, consideration of any
changes in development pattems, and adjustments based on inflation and other relevant
factors.
Enterurise Fund Policies lexcludino Buildina Fundl
The pnmary objectives of these(ollowing Enterprise Fund financial policies are:
• To maintain sUong operalions and maintenance programs and provide the
neCessary funds to f nance prionty and ongoing capital projec[s in order to tleliver
high-quality utility ServiCeS.
• To have available funds and access to fnancial resources m be able to quickly
respond to unplanned Capital Improvement Plan projects, emergencies,
catashophic, and Force Majeure Incidents and to allow for the continued ability to
provide utility services.
• To maintain strong fnancial conditions aimed at preserving and enhancing the
Enterpnse Fund's credR ratings to minimize capilal project financing costs and to
pmmote long-term system sustainability.
• To maintain reasonable and justified levels of rates and fees over the long run in
accordance with good business practices.
1. Credit Ratino Policv (Water. Sewer, and Stormwater Fundsl - The Cily shall sMve to
maintain fnancial performance for the Water, Sewer, and Stormwater Funds consistent
with that of utilities with an uninsured bond rating of "AA" or better. A higher credit rating
ran result in lower borrowing cosls and lower rates over the long term(or the beneft of the
637
customers of the systems.
2. Ooaratina Reserve Policv - The City will establish and maintain cash-funded Operating
Reserves tor the Enterprise Funds to provide adequate levels of working capital to i)
mitigate cuvent and future risks regarding revenue shorttalls and unanticipated expenses;
and ii)ensure stable services and rates.
• The City will maintain a minimum unencumbered and unrestric[ed Operating
Reserve balance equal fo three (3) months or hventy five percent (25%) o( the
current fscal year budgeted operating expenses (the Operating Reserve Target).
• If ihe Operating Reserve unresMcted balance a[ the end o(the precetling fscal
year is less Ihan the Opereting Reserve Target, the Ciry will develop a plan lo re-
eslaWish the opereling reserves over a penod not to exceed three(3)fscal years.
3. Renewal & Reolacement Reserve Policv - The City will establish and mainlain for lhe
Enterpnse Funds an ongoing cash-funded Renewal & Replacement �und for renewals,
replacements, and Capital Improvements.
• The City will maintain forthe funds a minimum unappropriated and unencumbered
Renewal & Replacemenl Reserve equal to lhe prior year's annual depreciation
expense plus ten percenl (10°/) (ihe Renewal & Replacement Reserve Targeq.
• The Renewal 8 Replacement Reserve will be in addition to Ihe funds held on
deposit for purposes of maintaining a minimum Operating Reserve. It is
contemplatetl�hat the monies on deposit[hat are included as a component o(lhe
Renewal & Replacement Reserve may be expended on renewals, replacements,
and Capital Improvements to meet the overall fnancial objectives and funding
needs of the Enterprise Fund.
• The balances establishetl in this reserve are to:
• Mitigate risks regarding planned and unanticipated renewals, replacements,
and capital expenditures, or increases in materials, labor, or other cosls from
ongoing or planned projects.
• Provide for changes in expenditure pnorities resulting in Ihe advancement or
addition of certain projects.
• Promote the availability of tunds for renewals, replacements, and capital
reinvestment forthe existing in6astructure,with the intent to limit outages and
inability to provide service from equipment or infrestructure failures or
because of Force Majeure incidents due to wea[her events and other
occurrences.
• Ensure reliable service and ameliorate the eBects to monthly service rates
from unanticipated costs.
• H the Renewal 8 Replacement Reserve balance at the entl of the preceding fscal
year is less than the Renewal & Replacement Reserve Target, the City will
aevelop a plan to re-esta6lish the Renewal 8 Replacement Reserve in an amount
equal to the Renewal 8 Replacement Reserve Target over a period not to exceed
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three (3) fiscal years. Compliance with the re-establishment of the Renewal &
Replacement Reserve Target may not be achieved through lhe defeval of
maintenance and/or itlentifetl capital reinvestment.
4. Oceratino Budoet Policv - The annual operating budget for each Enterprise Fund will:
• Be structurally balanced, with revenues su�cient to meel expenses (those ihat
are ongoing in nature).
• Refiect rates set at levels intended ro support [he direct antl intlirect costs of Ihe
systems, with the intent to provide Ihe lowest reasonable rates over time, not
necessarity the lowest fees and user charges during the curtent or budget fscal
year, and at a level necessary to ensure the adequate maintenance and
operetions of the systems.
• Reflect these fnancial policies and include amoun�s necessary to maintain the
required operating and rapital reserves.
5. Rate and Financial Plan Review Policv(Water. Sewer. and Stortnwater Fundsl - The
City staH will use a formal forecasting anC ezpentliture monitoring process in the evaluation
of the fnancial positions of ihe Water, Sewer, and Stormwater Funds.
• 7hese processes are intended to: i) minimize financing costs through proper
planning for Renewal & Replacement and Capilal Improvement spending and
inancing needs; ii) obtain formal endorsement 6y the City Commission for long-
term fnancial needs and sources of fnancinq; and iii) maintain or s[rengthen the
cretlit retings of the Water, Sewer, and Stormwater Funds.
• The City shall perform a formal rate study at least once every�ve years, and the
City shall adopt a (ve-year schedule of retes, fees, and charges basetl on the
results of the rate study.
• As part o(the annual financial planning process, the City staK will prepare multi-
year operating and capital budgets to ensure rates are sufficient to meet the needs
of the utililies.
• The Water, Sewer, and Stormwater Funds will be run in a business-like manner.
Rates and fees will be set to ensure the full recovery of the Water, Sewer, and
Stormwater Funds operating and capital expenditures. This practice will ensure
that the Water, Sewer, and Stormwater Funds has reducetl fnancial nsk and will
meet Federal, State, antl local regulations as well as service area demands.
Guidina the Desian of Proarams and Services
1. Budgeting -Grants
• The Atlminishation shall identify all City Commission sponsored grants which
contemplate recurring funding ro the grantees as a separate line item in lhe
proposed Operating Budget and/or budget presentations made to the City
Commission as part of the annual budget process.
• The Administration shall review and make recommendations to the Ciry
639
Commission on recurring grants every three (3)years, to allow For periodic review
and approval ot a0 Commissiornsponsored initiatives or grant programs which
involve recurring funding antl thereby ensure lhat recurring grenis align with the
City Commission's evolving budget pnori�ies.
2. Budgeling -Quartedy review
• The Administra�ion shall feview and report[o the City Commission of adjustments
and amendments to the City of Miami Beach Annual Operating Budget Por
purposes of conforming actual budget expenditures to the adopted budget and
shall occur at least once every fiscal quarter.
3. The City of Miami Beach shall create a strategic plan that identifes mNti-year strategic
priorities wilh corresponding result measures for each pnori�y.
4. Annually, or as needed, the Cily of Miami 8each shall use a strategic planning process to
develop initiatives that support the stretegic plan prionties.
5. The budget process and format should be pertormance-basetl antl focused on Key Intended
Outcomes and peAormance measures.
6. Any new initiatives that are not identifed in the strategic plan that are greater than 0.5% of
budget for the fund impacted per year, or cumulatively, must be frst considered as part of
the City's annual sirategic planning or budget process to develop initiatives.
De6t Manaaement Policv
1. Ethics Reouirements-Ciry staff, the Ciry Commission, consultants, and underwriters
shall be familiar with and adhere ro the laws of the State of Florida, and the
requirements of Municipal Securities Rulemaking Board (MSRB), as applicable. All
debt financing participants shall always maintain the highest standartls of professional
conduct. There shall be no conflict o/interest between the City and any debt-fnancing
participant.
2. Debt Issuance
• The City will utilize its various consultaNs lo tletermine the amount, timing, and
structure of a tlebt issuance. These pro(essional consultants may indude but not
be limited to registered fnancial advisors, bond and disclosure counsel, ra[e
consullants, and general engineenng consultanis. All such consultants shall
provide the City wi[h their relevant written pro(essional opinions as b the projected
cost of proposed rapital projects and maintenance, the expecled revenue to be
generated by such projec[s, and the expected cost of financing such projects
along with legal opinions as to the disclosure, authorizalion, and lax exemption of
all such debt issuance.
• Debt repayments should not extend beyond the useful Ide of the asset fnanced
or 30 years, whichever is less.
• Shorl-Term Financing -The Ciry may elect to issue short-term financing vehicles
such as a line of credit or commercial paper as a bndge for an anticipated funding
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gap. However, the City will not use shoA-term borrowing to fnance operating
needs.
3. Refundinasand Defeasance
• 8ond refunding of outstanding debt may be pursued when a threshold of Net
Present Value (NPV) savings is greater than or equal to fve percent (5qo). NPV
savings shall be ralculated using the aggregate amount of savings on a relunding
transaction taking inlo consideration the time value of money and net ot all costs
ot issuance.The City's fnancial advisor must confirm[he calculation that the NPV
savings meets lhe [hreshold requirement as defned in ihis paragraph.
• However, a detertnination lhat a bond refunding meets lhe minimum NPV savings
threshold will not necessarily result in the City refunding any bontl series.
4. Disclosures
• The CFO will coordinate for the City, lhrough a third-party service, annual
disclosure tilings, as well as other disclosures.
• The City will nol disseminate any fnancial information to any investor or inves[ors
where such informalion is nol reatlily available to all imestors. However, general
financial information disseminated by the City via means such as the City's web
site is for generel informational purposes only and is not intended by the Ciry to
be relied upon by others for investment purposes.
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Committee Referrals-C4 O
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Eric Carpenter, Ciry Manager
DATE: October30, 2024
TITLE: REFERRAL TO THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE TO
DISCUSS A CITY OF MIAMI BEACH COMPREHENSIVE FINANCIAL POLICV.
RECOMMENDATION
The Administration recommends approving a refeval to the Pinance & Economic Resiliency
Commitlee to tliscuss the creation of a Comprehensive Financial Policy.
BACKGROUNDIHISTORY
Over [he years �he Commission has passed various resolutions providing direction on vanous
Mancial policies on topics including bu�not limited[o capital reserves,fund balances, use o(non-
recurring revenues, use of annual surpluses, and funding for capital projects. Some financial
policies have been included in annual budget resolutions such as use of General Fund interest
earning towards capital pmjects. The Administration believes it is in the best interest of the City
to consolidate all prior Commission direction on fnancial policies into one comprehensive fnancial
policy.
ANALYSIS
FISCAL IMPACT STATEMENT
N/A
Doea this Ordinance reaulre a Businass Imoact Estimate?
(FOR ORDINANCES ONLV)
If applicable, the Business Impact Estimate (BIE)was published on:
See BIE aL httosdlwww miamibeachfl aovlcitvhalllciri-derk/meetina-noticesl
FINANCIAL INFORMATION
N/A
CONCLUSION
Aoulicable Area
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Citywide
Is this a •'Residents Riaht to Know" item. Is this item related to a G.O. Bond
Dursuant to CiN Code Section 2-177 Proiect7
No No
Was this Aaenda Item initiallv reauested bv a lobbvist which as deFlned in Code Sec.2481
ineludes a orincioal enAas�ed in IobbvinSl?
If so, specify the name of lobbyist(s)and principal(s):
Deoartment
Finance
Soonsor(s)
Commissioner Joseph Magazine
Co-soonsorfsl
Condensed Title
Ref: FERC-Ciry of Miami Beach Comprehensive Financial Policy. (Magazine) FN
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