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Commission Retreat-Budget Overview 222BUDGET UPDATE Commission Retreat June 4, 2014 1 Agenda Budget Process Overview General Fund Budget Trends FY 2013/14 Budget Highlights FY 2014/15 Budget Development Update Next Steps Commission Retreat – June 4, 2014 2 2 CITY OF MIAMI BEACH’S EXCELLENCE MODEL Commission Retreat – June 4, 2014 3 http://web.miamibeachfl.gov/excellence 3 WORK PLAN & BUDGET CYCLE Commission Retreat – June 4, 2014 4 Staff Retreats to identify potential initiatives Jan - Feb Initiate budget development process Feb - Mar Dept. Directors confer with ACM’s during budget development for approvals; input received from Boards/Committees; workplan and budget submission due at the end of March Mar - May Commission establishes budget priorities Work plan/Budget planning workshops with departments Departmental reviews with City Manager and OBPI May - Jun Preliminary taxable values received June 1st from County Develop preliminary General Fund Budget 4 WORK PLAN & BUDGET CYCLE Commission Retreat – June 4, 2014 5 Jul 1st “Certification of Taxable Values” received from County Mid- Jul City Commission sets tentative property millage rates Jul – Aug Finance & Citywide Projects Committee budget meetings Aug Administration develops Proposed Budget Sep First and second public hearings on the budget Adopt tentative and final millage rates; Adopt operating budgets Appropriate documentation filed with County Property Appraiser, Tax Collector, and Florida Department of Revenue in Tallahassee 5 Types of funds Commission Retreat – June 4, 2014 6 General Fund Enterprise Funds Internal Service Funds G. O. Debt Service Funds Redevelopment Agency (RDA) Resort Tax Fund Special Revenues 6 ADOPTED FY 2013/14 BUDGET OVERVIEW Commission Retreat – June 4, 2014 7 GENERAL FUND $264,643,000 Building Budget & Performance Improvement (OBPI) Capital Improvement Projects (CIP) City Attorney City Manager City Clerk Communications Economic Development Finance Procurement Citywide Accounts G.O. DEBT SERVICE FUND $ 5,932,000 ENTERPRISE FUNDS $160,819,000 Convention Center Parking Department Water Operations Sewer Operations Stormwater Sanitation Human Resources/Labor Relations Mayor and Commission Neighborhood Services Organization Development & Performance Initiatives Planning Parks & Recreation Public Works Operations Police Fire Tourism & Cultural Development 7 ADOPTED FY 2013/14 BUDGET OVERVIEW Commission Retreat – June 4, 2014 8 REDEVELOPMENT AGENCY (RDA) $ 19,840,000 City Center- CMB TIF only Total General Fund, GO Debt, Enterprise & RDA Funds = $450,684,000 RESORT TAX FUND $ 59,507,000 2% Tax 1% Tax - Eligible tourism–related - Debt Services City Center Bonds exp. in General Fund - Quality of Life Capital Projects GMCVB & VCA - Arts Debt Service - Transportation Tax Collection INTERNAL SERVICE FUNDS $ 75,481,000 Information Technology Risk Management Central Services Property Management Fleet Management 8 FY 2013/14 GENERAL FUND REVENUES Commission Retreat – June 4, 2014 9 Property Taxes comprise 44% of total General Fund revenue 9 FY 2013/14 GENERAL FUND EXPENDITURES Commission Retreat – June 4, 2014 10 Police and Fire comprise 60% of expenditures 10 FY 2013/14 GENERAL FUND EXPENDITURES Commission Retreat – June 4, 2014 11 Personnel Services comprise 73% of expenditures 11 General Fund Budget Trends 12 General fund EXPENDITURES budget TREND Commission Retreat – June 4, 2014 13 General Fund Expenditures have grown by an average of 1.6% since FY 2007-08 13 Public safety trend Commission Retreat – June 4, 2014 14 FY 2006/07 General Fund Budget FY 2013/14 General Fund Budget Public Safety as a percentage of the budget has increased from 50% in FY 2006/07 to 60% in FY 2013/14 14 Employee givebacks Commission Retreat – June 4, 2014 15 Employee givebacks over the last 7 years total almost $77 million 15 Position count trend Commission Retreat – June 4, 2014 16 1,354 1,509 1,441 1,399 1,345 1,273 1,322 1,338 1,917 2,127 2,050 2,007 1,927 1,794 1,894 1,903 Positions are 10% less in FY 2013/14 than in FY 2006/07 16 Total Combined millage trend Commission Retreat – June 4, 2014 17 Millage Rate Current combined millage rate is 3.1 mills or 34% less than in FY 1997/98 and 1.6 mills or 20% less than in FY 2006/07 17 OVERLAPPING MILLAGE RATES Commission Retreat – June 4, 2014 18 City of Miami Beach portion of property tax bill has decreased as a percentage of the total bill from 33% to 30% 18 Property tax revenue trends Commission Retreat – June 4, 2014 19 140.4M 125.5M 112.2M 115.8M 126.0M 237.7M 117.6M 114.5M 110.5M 237.5M 226.3M 235.4M 230.6M 264.1M 256.3M 244.3M Property Tax revenues are 16% less than in FY 2006/07 Property Taxes are 44% of GF Revenues compared to 59% in FY 2006/07 47% 51% 53% 54% 59% 44% 45% 45% 19 FY 2013/14 Budget Highlights 20 FY 2013/14 Property values Commission Retreat – June 4, 2014 21 Increase in certified values 6.9 percent Citywide and 6.8 percent outside the City Center Redevelopment Area – as compared to a 5 percent increase Citywide in FY 2012/13 21 FY 2013/14 Millage rate Commission Retreat – June 4, 2014 22 22 FY 2013/14 Millage rate Commission Retreat – June 4, 2014 23 FY 2010/11 rate increase of 0.56 mills to help offset $32 million deficit From 5.6555 to 6.2155 Proposed Goal: Reduce millage rate to 5.6555 as property values rise Millage reductions to date represent 63 percent of the goal FY 2011/12: 0.05 mills FY 2012/13: 0.0746 mills FY 2013/14: 0.2275 mills Total to date is 0.3521; 0.2079 remains Each 0.05 mill is approximately $1 million 23 FY 2013/14 Budget development Commission Retreat – June 4, 2014 24 Original FY 2013/14 General Fund Current Service Level (CSL) budget gap of $4.9 million as of July 8, 2013 CSL gap was updated to $1.9 million due to: Employee givebacks from union agreements resulting in a net $4.6 million savings Millage rate decrease of 0.2 mills resulting in a reduction of property tax revenue of $4.0 million Adjustments to revenues and expenditures for a net $2.3 million in additional revenue Current Service Level budget gap 24 FY 2013/14 Budget development Commission Retreat – June 4, 2014 25 Proposed efficiencies resulting in $617,000 of savings Proposed service level enhancements totaling $365,000 Additional $1,318,000 set aside in reserves Changes resulting in $3.0 million of additional revenue Additional millage rate reduction of 0.0275 ($550,000 less) $2.0 million increase in resort tax transfer for tourism eligible expenditures $1.2 million increase in parking fund transfer Approaches to balance $1.9 million gap in General Fund 25 FY 2013/14 Budget development Commission Retreat – June 4, 2014 26 The Adopted General Fund Budget reflects a $7.8 million or 3.0 percent increase The Adopted General Fund operating budget is only 7 percent more than in FY 2006/07 in spite of 16 percent growth in CPI, 127 percent growth in pension costs, and many new facilities and projects coming on line The Adopted property tax levy is approximately $25 million less than in FY 2006/07 26 FY 2014/15 Budget Development Update 27 Fy 2014/15 Csl budget The Current Service Level (CSL) budget represents the cost of providing the same level of service as in the prior fiscal year CSL provides the baseline of funding for the upcoming budget process Commission Retreat – June 4, 2014 28 28 Fy 2014/15 property values The Property Appraiser provides preliminary 2014 property values on June 1st and certified values on July 1st Preliminary 2014 property values increased 9.4% Breakdown between General Fund and RDA areas pending Certified values in July may be slightly different A 9.4% increase results in an increase of $11 million in General Fund property tax revenues Commission Retreat – June 4, 2014 29 29 FY 2014/15 CSL revenues CSL revenues are estimated to increase $12.7 million Property tax revenue increase of $11 million Building permits increase of $2.5 million Electric utility and franchise tax increase of $1 million Decrease in prior-year set-aside (one-time revenue) of $1.8 million Resort taxes contribution and Parking fund surplus contribution assumed to be flat Commission Retreat – June 4, 2014 30 30 FY 2014/15 CSL expenditures CSL expenditures are estimated to increase $10.7 million Salary increases from 3% COLA and 0-2% merit Additional step for Police Officer, Sergeant, and Lieutenant ranges; hazardous duty pay Additional step for Firefighter I range; hazardous duty pay Approximate $1.9 million in net lower pension contributions Due to savings in Fire & Police from last year’s pension reform offset by a slight increase in MBERP pension contribution Impact of annualized costs for items added during FY 2013/14 Impact of CSL department requests Will continue to be reviewed by Administration Commission Retreat – June 4, 2014 31 31 FY 2014/15 preliminary CSL Preliminary CSL Revenue increase of $12.7 million Expenditure increase of $10.7 million Net surplus of $2.0 million CSL revenues do not include potential increased contributions from Resort Taxes or Parking Fund CSL revenues will be updated with certified property values in July and refinements in other revenues CSL expenditure department requests will continue to be reviewed by Administration Commission Retreat – June 4, 2014 32 32 Next steps Finance and Citywide Projects Committee meetings – tentatively scheduled July 2nd July 16th August 15th August 22nd Review CSL, Capital Improvement Program, potential enhancements, efficiencies, and revenue adjustments Commission Retreat – June 4, 2014 33 33 Next steps Two budget hearings in September Tentatively scheduled for September 10th and September 29th or 30th Millage rates Set preliminary millage rate on July 23rd Tentative millage rate at first public hearing Final millage rate at second public hearing Commission Retreat – June 4, 2014 34 34 QUESTIONS Commission Retreat – June 4, 2014 35 35