Loading...
HomeMy WebLinkAbout2005-25971 Reso RESOLUTION NO. 2005-25971 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, SETTING THE PROPOSED MILLAGE RATES FOR FISCAL YEAR (FY) 2005/06, THE CALCULATED "ROLLED-BACK" RATE, AND THE DATE, TIME, AND PLACE OF THE FIRST PUBLIC HEARING; FURTHER AUTHORIZING THE CITY MANAGER TO TRANSMIT THIS INFORMATION TO THE MIAMI-DADE COUNTY PROPERTY APPRAISER IN THE FORM REQUIRED BY SECTION 200.065, FLORIDA STATUTES WHEREAS, Section 200.065, Florida Statutes, has specified the method by which municipalities may fix the millage rate and adopt an annual budget; and WHEREAS, the City of Miami Beach is required to advise the Miami-Dade County Property Appraiser of the Proposed Millage Rates, the "Rolled-Back" Rate, and the date, time, and place of the first public hearing. NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the following recommendations of the Administration be and are hereby ratified for transmittal to the Miami- Dade County Property Appraiser, as specified in Section 200.065, Florida Statutes: 1) Proposed Millage Rates for FY 2005/06 General Operating Capital Renewal & Replacement Debt Service 7.299 mills 0.182 mills 0.592 mills 8.073 mills 2) "Rolled-Back" Rate 6.191 mills 3) The first public hearing on the proposed millage rate and the tentative budget for FY 2005/06 shall be held on Thursday, September 8, 2005 at 5:01 P.M., in the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida. PASSED and ADOPTED, this 27th day of July, 20 David Dermer MAYOR APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION ~6r(),t~ CITY'CLERK :Robert Parcher Agendaltem~ .'R,7e Date 7- 21-0~ t~ 1-;)- )"-cJS ity eyOate f\ 1 ~ CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:\\ci.miami-beach.fl.us COMMISSION MEMORANDUM TO: Mayor David Dermer and Members of the City Commission DATE: July 27, 2005 FROM: Jorge M. Gonzalez \ ~ City Manager 0;0--" 0 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA SETTING 1) THE PROPOSED OPERATING MILLAGE RATE; 2) THE REQUIRED DEBT SERVICE MILLAGE RATE; 3) THE CALCULATED "ROLLED-BACK" RATE; AND, 4) THE DATE, TIME, AND PLACE OF THE FIRST PUBLIC HEARING TO CONSIDER THE MILLAGE RATES AND BUDGETS FOR FISCAL YEAR (FY) 2005/06; FURTHER AUTHORIZING THE CITY MANAGER TO TRANSMIT THIS INFORMATION TO THE MIAMI-DADE COUNTY PROPERTY APPRAISER IN THE FORM REQUIRED BY SECTION 200.065, FLORIDA STATUTES. SUBJECT: SUMMARY The Administration is recommending the City's total millage rate be reduced to a rate of 8.073 mills. The operating millage rate will remain at the current rate of 7.299 and debt service millage rate will decrease by 0.156, from 0.748 to 0.592. Of the 0.156 mills reduced from debt service, 0.056 will be reserved for Capital Renewal and Replacement and the remaining 0.100 mills will be reduced from the overall millage. Although the overall millage will decrease by 0.100 mills, due to increases in assessed value there will be a net increase of $35.63 in the amount of taxes that "the average residential homeowner" (who owns a $233,000 home with homestead exemption) will pay to the City in the coming fiscal year. Both the School Board and the County have announced decreases in the property tax rate, but due to increases in assessed values, the combined impact on "the average homeowner" in Miami Beach will be an annual increase of $80.92. ADMINISTRATION RECOMMENDATION The Administration recommends that the Mayor and City Commission adopt the attached resolution which authorizes the City Manager to transmit the following information to the Miami-Dade County Property Appraiser: 1) Proposed Millage Rates for FY 2005/06: General Operating Capital Renewal & Replacement Debt Service Total 7.299 mills 0.182 mills 0.592 mills 8.073 mills (7.299 last year) (0.126 last year) (0.748 last year) (8.173 last year) FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 2 2) "Rolled-Back" Rate (Truth in Millage) 6.191 mills 3) The first public hearing to consider the proposed millage rates and tentative budgets for FY 2005/06 shall be Thursday, September 8,2005 at 5:01 p.m., in the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida DECISION-MAKING PROCESS The budget development process has included participation from within and from outside City Hall. Committee of the Whole Meetings were held on April 20th and June 8th as well as a Retreat on May 20th and 21st to provide preliminary budget information to the Commission and establish priorities. Additionally, budget briefings were held on June 30th, July 8th and 13th to inform the Commission and the citizens of preliminary General Fund revenue projections and department expenditure requests for FY 2005/06. The Budget Advisory Committee (BAC) reviewed major budget issues and trends and offered comments and suggestions throughout the process. In addition, this year we have been able to refine our strategic priorities with information obtained from our first -ever set of community surveys. By surveying our residents, businesses and community organizations, we now have a better understanding of the needs and desires of our community and are better able to allocate our resources to fund enhancements that address these priorities. Overall, the community has a very favorable view of the City Miami Beach as a place to live, work, visit and play. The Proposed Operating Budget for FY 2005/06 was prepared based on four themes: (1) maintain current services; (2) address priorities identified by the community; (3) incorporate structural changes for the future that ensure the fiscal management and sustainability for the city in the long term; and (4) increase taxpayer value for services. The Proposed Operating Budget incorporates the impacts of the expiration of the South Pointe redevelopment district as of September 30,2005. With the expiration of the district, and pursuant to the 2001 and 2003 amendments to the Convention Development Tax (CDT) Interlocal Agreement with Miami-Dade County, one half of the City ad valorem revenues previously restricted to the South Pointe district become available for use Citywide. Further, the Amended CDT Interlocal Agreement provides for additional intergovernmental revenues for a limited number of years that can be used to offset CDT or municipal resort tax type eligible expenditures. The South Pointe redevelopment district has been the most successful redevelopment district in the State of Florida to date. Assessed values have increased from $59 million when the district was established in 1976 to almost $2.5 billion as of January 1, 2005. The Proposed Operating Budget continues to provide funding for operating costs previously funded through the redevelopment district. FY 2005/2006 Proposed Millage Rate July 27,2005 Page 3 Maintaining the basic service level into FY 2005/06 will translate into an operating General Fund Budget of $180,230,189 which is $12,060,311 or 7.2% greater than the FY 2004/05 adopted budget of $168,169,878. In addition, the budget adds $3,945,077 for enhanced service levels, an increase of 2.3%. An additional $482,122 is included in the General Fund for the impact of enhancements in internal service funds, an increase of 0.2%. Further, the Proposed Budget adds $3,269,120 for a Miami Beach Homeowners Dividend Fund to provide a return on investment to homesteaded property owners, which increases the prior year budget by 1.9%. Finally, the FY Proposed Operating Budget incorporates structural changes that will help ensure the long term financial sustainability of the City and ensure that our capital assets are fully funded. These initiatives represent an increase of $15,837,949 million which increases the prior year budget by 9.4%. In addition, $4,160,660 in operating costs previously funded from the South Pointe redevelopment district, from Resort Tax Quality of Life funds, and from the Special Revenues funds, are also absorbed into the General Fund budget this year, an increase of2.5%. Therefore, the total Proposed General Fund Operating Budget is $207,925,117 which is $39,755,239 or 23.6% greater than the FY 2004/05 Adopted Budget of $168,169,878. Going forward, the General Fund Operating Budget is comprised 90% for services, 6% capital-related, 2% financial sustainability, and 2% return on investment. Maintain Current'Services and Address Priorities Identified bv the Community While continuing to provide the services that help contribute to the high satisfaction levels reflected in our community survey, over $7 million in enhancements are funded in this budget to increase satisfaction even further, primarily funding initiatives identified by the community as areas of concern (traffic and development, storm drainage, cleanliness of canalslwaterways, and condition of roads) or key drivers of overall satisfaction (cleanliness and maintenance of streets, buildings, beaches, etc.; safety; and communications, especially with businesses). These enhancements include making our streets, waterways, and public areas cleaner; infrastructure improvements; expanded recreation programming; expanded code compliance and remediation programs; enhanced public safety, particularly in our neighborhoods and in emergency management; increased project management to expedite completion of capital projects; and increased outreach and communication with the community. Incorporate Structural Chanaes for the Future That Ensure the Fiscal Manaaement and Sustainability for the City in the Lona Term To ensure long-term financial sustainability and ensure that our capital assets are appropriately funded in the long term, the proposed budget includes the following structural changes: · Increasing the annual funding for the Capital Renewal and Replacement Fund by $1.2 million; . An annual transfer of $2.5 million to the City's Capital Reserve to fund project shortfalls throughout the year; FY 2005/2006 Proposed Millage Rate July 27,2005 Page 4 . $5 million transfer to a new capital fund to create a pay-as-you-go component of the capital budget; . An annual $1.5 million transfer to a Capital Investment Upkeep Fund for non-facility related upkeep; . An annual $1 million transfer for an Information and Communications Technology Fund; . An annual $1 million transfer to the Risk Management Fund as part of a multi-year plan to address funding shortfalls in the reserve for claims against the City; and . $3.9 million in increased funding for the City's 11 % emergency reserve, previously funding from surplus revenues at year-end. The projected General Fund balance as of September 30,2006 is $35.5 million due to this budgeted contribution to the emergency reserve allowing us to fulfill our legislative requirements and further strengthen our credit worthiness with Bond rating agencies. Increase Taxpaver Value for Services Miami Beach Homeowners Dividend Fund The Proposed Operating Budget for FY 2005/06 incorporates the Miami Beach Homeowners Dividend Fund proposed by Mayor David Dermer during his 2005 State of the City address. The Miami Beach Homeowners Dividend Fund is intended to provide a mechanism for a return-on-investment to homesteaded property owners that reside in the City of Miami Beach. This Fund allows for a return of approximately $200 back to eligible Miami Beach homeowners currently receiving a homestead exemption after all their outstanding taxes and fees have been paid. The amount of the return is approximately similar to the City portion of an additional $25,000 Homestead Exemption. The estimated impact of this program is $3.3 million, to be funded from non ad valorem revenues such as franchise fees, utility taxes, occupational licenses, interest earnings, fines, etc. Increase in Free OfferinQs for Residents The FY 2005/06 proposed budget also includes several other benefits specifically for City of Miami Beach residents, including: . Free access to City pools on weekends and during non-programmed hours; . Free general admission to our Youth Centers on weekends and during non- programmed hours, including opening of both Youth Centers seven days per week; . Free Family Saturday Nights at one of our facilities four times per year, where families are welcomed, free of charge, to experience special activities; . Free Learn-to-Swim programs for 3 to 4 year old residents; . Expanded scholarship programs for specialty camps in the summer; and FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 5 Offset of Household GarbaQe and Trash Collection Fee Increase The Proposed Budget absorbs the impact of contractual CPI increases in payments to the contractor responsible for the collection and disposal of waste from single and multi-family households in the City. This, in effect, absorbs a $13.92 per household fee increase that otherwise would have been past on to the household. Overall Increase in Tax Paver Value For Services Overall, the Proposed Operating Budget enhances the value of services for taxes paid by the community in several ways: . Providing a $200 dividend return for full-time, homesteaded property owners; . Providing expanded free access to many Miami Beach programs and facilities for all residents; . Providing enhanced service levels addressing the priorities of the community; . Absorbing the household garbage and trash collection fee increase incurred due to contractual CPI increases . Reducing the overall combined millage rate for all property owners in the community. The following chart summarizes the funding components: FY 2005/06 Budget Highlights (in $million's) Increase Capital Asset Funds $10.8 Fiscal Sustainability $4.9 Value for Taxes Paid M3 Horreow ners' Dividend Fund $3.3 Value of Milage reduction $1.6 Enhancerrents $7.1 Continue Current Service $12.8 FY 2005/2006 Proposed Millage Rate July 27,2005 Page 6 Summary of Enhancements This budget includes over $1 million in enhancements for Fire and Police to improve public safety throughout the City. In Police, the enhancements include the implementation of a "neighborhood contacts" program by police in the Mid and North Beach areas, using six public safety specialists patrolling primarily on bicycles. By making five contacts per day, these six officers can reach over 7,000 households per year. I n add ition, patrol officers will each be encouraged to make at least one household or business contact per day, resulting in over 70% of households and businesses contacted throughout the year. In the Fire Department, enhancements include a new Emergency Manager position to address homeland security concerns, hurricane activity and other emergencies that may occur in the city; a technical support position in Fire Prevention; and expanded fire rescue training. The enhancements also expand ocean rescue response capability by adding ATVs at five lifeguard towers, and replacing nine lifeguard stations. In addition, funding is provided for two additional thermal imaging cameras and for retrofitting Fire Stations number 1 and number 3 with exhaust recovery systems. The Fire Department will pursue additional funding for Lifepak upgrades for Emergency Rescue, including an electronic reporting system, through the Housing Finance Authority. Preventing crime was one of the top three items identified in the community survey that the City could address to further improve public safety. Approximately $240,000 in new funding is added to replace two contract data entry clerks with permanent staff and to hire a second technician for support of Police mobiles, both to enhance real-time reporting capabilities; to hire a fulltime property evidence technician to provide increased coverage at night and reduce overtime; and to hire two additional police officers to enforce the recently adopted boat mooring ordinance. In addition, $100,000 is added to provide for an assessment of enhanced lighting in business districts to address security concerns. The proposed budget incorporates approximately $1.3 million in enhancements to ensure the cleanliness of our rights-of-wa~. This will fund enhanced litter control levels of service along Washington Avenue from 5t Street to Lincoln Road, the Flamingo Park area, Lincoln Road between Washington and Collins Avenue (seven days and five nights per week), Harding Avenue from 79th Street to Indian Creek, including Abbot, Byron and Carlyle (five days per week). Litter control and pressure cleaning will also be enhanced in the Beach and Boardwalk zones, including the surrounding dune areas. This also includes funding for expanded litter control on 41 st Street and 71 st Street from $150,000 per year previously funded from Quality of Life to $389,000 providing for service five days per week in each area. Illegal dumping surveillance will also be increased, particularly in the North Beach area; smoker stations will be installed along Lincoln Road funded through the City Center redevelopment district; and a mobile leaf vacumn will be purchased to enhance the frequency of cleaning parks. The proposed budget reflects an additional 34 positions in the Sanitation fund. However, I have directed staff to develop a managed competition program allowing for some portion of these activities to be contracted out. Contracted operation would be compared to in-house operations on the basis of cost and performance. In addition, the City will be implementing a monitoring system to ensure that FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 7 these enhancements produce measurable improvements in cleanliness along our rights-of- way and public areas. The proposed budget funds expanding the waterway cleaning efforts from $30,000 per year previously funded by Quality of Life funds, to $97,500 through a contract for a comprehensive program for cleaning trash and debris from inland canals and waterways throughout the City. The FY 2005/06 Proposed Operating Budget incorporates over $200,000 in new funding for the addition of three code officers to provide for expanded hours of operation across all areas of the City and an additional inspector is added to enforce the recently enacted newsrack ordinance, the cost of which is anticipated to be offset by increased revenues from fines. Additional funding is provided for expansion of the graffiti remediation program citywide, a wildlife eradication program throughout the City, and enhanced funding for remediation of overgrown vacant lots, a total of $73,000. An additional $100,000 will be funded from the proposed Information and Communications Technology Fund for software to enhance tracking of employee productivity, caseload by zone, and caseload turnaround time, etc. New funding is incorporated for an enhanced hedge around the Miami Beach golf course ($55,000). While providing an alternative to a fence, the hedge will also enhance beautification around the golf course. In addition, $62,000 in new funding will be provided from the Parking Department for a full-time contracted two-person maintenance crews for pressure cleaning, sign installations and repair, meter installations, and general routine maintenance of parking facilities. Finally, replacement of landscape stock in needed areas will be funded from the proposed Capital Investment Upkeep Fund. The proposed budget incorporates $460,000 in recreational program enhancements including seven full-time and two part-time positions and operating expenses for Normandy Park and Pool scheduled to re-open in summer 2006, six part-time recreational leader positions for new programming at Fairway Park, four part-time recreational leader positions to reduce staffing ratios for after schools programs, one full-time recreation leader to develop and implement a senior scenes club program of activities, classes and trips, one part-time recreational leader and operating expenses for enhancement ofthe Teen Club at North Shore Youth Center, and new computers and peripherals for Flamingo Pool And the Police Athletic League facility. This also includes funding for the increased costs of opening North Shore Youth Center on Sundays and Scott Rakow Youth Center on Saturdays, making our Youth Centers open to the public seven days per week. An additional $150,000 in funding is proposed to provide for a free-of-charge "Learn to Swim" program for 3 to 4-year old residents and to provide for expansion of scholarships available for specialty camps. The Proposed Budget also recommends elimination of fees for resident use of city pools on weekends and during non-programmed hours and for residents accessing general use of the Youth Centers on weekends and during non- programmed hours. Approximately $18,000 in new funding is proposed for four Free Family Saturday Nights program events at our parks in partnership with cultural groups. In addition, the City will conduct focus groups to obtain more specific information regarding FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 8 types of cultural activities desired, accessibility to cultural activities, availability of information regarding cultural activities, etc. The proposed budget includes $58,000 in new funding for special events support, including a special events inspector to provide a full-time presence at events on nights and on weekends, a contract position for initial contacts with event producers, and a Plans and Policy Manager in The Police Department for special events. The proposed budget includes over $400,000 for a full year of funding for eight positions added in mid-year 2004/05 to reduce turn around times for plan reviews, and decrease overdue elevator inspections and tests. In addition, one position is added in the Finance Department to create a one stop lien shop consolidating building, code and fire lien functions. The proposed budget includes approximately $75,000 for a bike pedestrian network coordinator to expedite implementation of bikeways and pedestrian walkways throughout the City and for the implementation of additional bikeracks. To help expedite plan review and manage projects in construction, the proposed budget includes $400,000 in new funding for two positions in Public Works and three in CIP. In addition, the annual funding of the Capital Reserve Fund will help ensure that projects are not delayed due to funding shortfalls. An additional $150,000 is funded for FY 2005/06 to complete assessments on 9 additional buildings in FY 2005/06, the second phase of a comprehensive facility assessment program. Further, five positions are added in property management to address increasing maintenance requirements as new facilities are brought on line and to ensure completion of renewal and replacement projects at a cost of $325,000. The proposed budget includes approximately $900,000 in enhancements for citywide infrastructure improvements, including a pavement assessment and repair program, broken sidewalk replacement, as well as a regular maintenance program for outfall and catch basin cleaning and repairs. In addition, $120,000 is included to increase the number of positions supporting the automated mapping of the City's infrastructure and work order system from one to three. Of these total combined enhancements, $900,000 are funded from the Stormwater and Sewer Enterprise funds. The FY 2005/06 Proposed Operating Budget incorporates centralization and enhancement of all Communications functions within the City. Although preliminary in concept, it is anticipated that the new communications department will include two existing communications positions within the Office of Communications, two media positions and a part-time Proclamation Clerk position (to provide publications graphics support) from the City Clerk's Office, and a sponsorship position from the Parks and Recreation Department. Similarly, we are consolidating our outreach functions in the Neighborhood Services Department. To this end, an existing business outreach position in Economic Development will be transferred to the Community Outreach Section of Neighborhood Services. FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 9 Approximately $240,000 is funded for a regular advertising page in local newspapers, a bi- monthly newsletter, and expanded cable programming, including a contracted program manager. In addition to existing positions, $180,000 in funding is provided for an additional public information specialist, an additional media specialist, and a graphics position. An additional $95,000 is included for capital improvement program (CIP) project newsletters to be distributed bi-annually to each of the 14 neighborhoods throughout the City, and replacing an existing Community Information Manager position with two Community Information Coordinators to enhance outreach with the neighborhoods. Further, $86,500 in communications equipment will be funded from the Information and Communications Technology Fund. In addition to a new code system, the proposed budget includes $82,000 for an internet parking application. An existing contracted temporary clerical position in the Parking Department will be converted to a full-time position to assist with implementation and support of the software. The proposed budget includes $30,000 for software and technology anticipated to result in increased revenues, an on-line grants locator system and a Parking VIN vehicle to electronically identify parking ticket scofflaws; and a new Financial Analyst II is added to ensure more timely reconciliation of bank accounts. Finally, approximately $137,000 is anticipated in efficiencies, including overtime reductions through hiring 3 positions in Fire and 1 position in Parking. Approximately $240,000 will be funded by Information Technology for new IT positions, including a Storage Area Network (SAN) Architect to develop and implement a strategic solution to address multi-department storage needs, an additional resource to support the City's more than 1,500 desktop users, and 1 position providing full-time support for Citywide deployment of Voice Over Internet Protocol that allows the City to achieve savings by bringing data and voice traffic together on the same network. In addition, the Information and Communications Technology Fund will provide funding for the new SAN, implementation of an Enterprise Uninterrupted Power Supply for the City's data center, a "Self-Defending Network" solution to improve system security and mitigate potential virus infiltrations to the City's network, and an e-mail archiving solution to enhance our retrieval capabilities for public records requests etc. and to further optimize storage requirements. In addition, this fund will provide an advance funding stream for the implementation of a citywide wireless broadband network (WiFi) to enhance the City's public safety network and provide "Hotspot" areas for public access. The fund will be re- paid over time from the considerable savings that will be incurred for our current wireless applications. To enhance tracking performance and ensure we achieve results, the City will pursue performance management software, funded by the Information and Communications Technology Fund. FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 10 MILLAGE FOR CAPITAL RENEWAL AND REPLACEMENT In FY 2004/05 the City established a restricted account for the renewal and replacement of the City's General Fund facilities to extend the useful life or replace equipment whose useful life has expired. Project specific appropriations from the fund are reviewed and approved each year by the City Commission as part of the budget process, and are used exclusively for those capital expenditures that help to extend or replace the useful life of our facilities. The funding of this restricted account is accomplished by adding a percentage of the amount of the Debt Service Millage reduction to the General Operating Millage. In FY 2004/05, the dedicated millage for Renewal and Replacement was 0.126. In FY 2005/06, the reduction in debt service millage is 0.156 of which 0.056 was added for a cumulative Renewal and Replacement millage in FY 2005/06 of 0.182, and with a net decrease to the total operating millage of 0.100 mills. GENERAL FUND AD VALOREM REVENUES The net General Fund ad valorem budgeted revenue available for use Citywide FY 2005/2006 Proposed Millage Rate increased from $ 78.03 million in FY 2004/05 to $101.45 million for FY 2005/06, an increase of $23.42 million, or a 30% in General Fund ad valorem revenues. Of the $101.45 million, $6.95 million are equivalent to the tax increment revenues that would have been transferred to the South Pointe redevelopment district tax had it still been in place. In addition, $7.72 million previously part of the South Pointe redevelopment district tax increment revenues, are incorporated in the General Fund. Pursuant to the Amended CDT Interlocal Agreement, the use of these funds is restricted to the geographic area of the former South Pointe redevelopment district. Finally, ad valorem revenues restricted to the City's Capital Renewal and Replacement Reserve will increase from $1.347 million to $2.529 million, an increase of $1.182 million or 87.8%. Of this amount, $0.284 million is due to increased property assessments, and $0.898 million is due to enhanced funding levels. OTHER GENERAL FUND REVENUES Resort tax revenues transferred to the General Fund for tourism-related expenditures are anticipated to increase from $18.9 million in FY 2004/05 to $19.6 million in FY2005/06, reducing the gap between tourism-related expenditures provided by General Fund departments and Resort Tax revenues transferred to the General Fund. The General Fund Budget includes approximately $2.9 million intergovernmental revenues, pursuant to the Amended CDT Interlocal agreement that are used to offset CDT or FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 11 municipal resort tax type eligible expenditures. In FY 2005/06, these revenues are used to fund the Miami Beach Botanical Garden, the Bass Museum of Art, operating subsidies for the Colony and Byron Carlyle theatres, debt service on the Normandy Shore Golf Course, installation of new hedges along the Miami Beach Golf Course, homeless outreach and placement services, 4t11 of July Fireworks, and the Miami Beach Chamber of Commerce Visitors Center. Interest revenues are projected at $4.2 million, approximately an increase of $1.4 million over the FY 2004/05 budget, primarily due to increased interest rates, and franchise fees and taxes are projected to increase by $1.2 million based on current revenue trends. Licenses and permits are increased by $1 million based on FY 2004/05 trends and partially used to fund additional positions in the Building Department to support the increased activity beginning in mid FY 2004/05. The General Fund Proposed Budget includes fee increases at the Miami Beach Golf Course to a level consistent with fees charged at similar facilities in the region, generating an additional $150,000 per year. However, fees for City of Miami Beach residents at the Miami Beach Golf Course will remain unchanged. No other General Fund fee increases are proposed beyond those increases approved by the City Commission in 2003 for implementation in FY 2005/06. In addition, $1.3 million in Special Revenues from Recreation fees will be brought into the General Fund, offset by the same in expenditures. On a go forward basis, use of the revenues will be tracked separately through the project accounting component of our new financial system. STATUTORY REQUIREMENTS FS 200.065, entitled "Method of Fixing Millage" establishes specific guidelines that must be used by all local government entities in setting millage (property tax) rates. Under the statute, the City is required, within 35 days of receipt of the "Certification of Taxable Value" (received July 1, 2005), to advise the Miami-Dade County Property Appraiser of the proposed general operating millage rate, the calculated "rolled-back" rate and the date, time, and place of the first public hearing to consider the proposed millage rates and tentative budgets for FY 2005/06. The required Debt Service millage rate must also be set at the same time. After setting the proposed operating millage rate, the Commission may, at any time prior to the final adoption, lower the rates by adjusting priorities. Increasing the millage rate may only be accomplished by an expensive mailing and advertising process to every property owner on Miami Beach. FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 12 ANALYSIS OF PROPERTY VALUES IN MIAMI BEACH On July 1, 2005, the City received the "2005 Certification of Taxable Value" from the Property Appraiser's Office stating that the taxable value for the City of Miami Beach is $17,445,766,574, including $825,278,283 in new construction, which is the largest increase this City has experienced in its recent history. The preliminary 2005 value represents an increase of 25.9 percent over 2004's final value of $13,858,100,123. Alternately, the increase is 24.3 percent over 2004's preliminary value of$14,040,817,181. The difference of$182,717,058 between 2004's preliminary and final values represents the equalization loss of less than 1.3 percent due to appeals, etc. The comparative assessed values for the Miami Beach Redevelopment Agency City Center redevelopment district increased from $1,633,198,959 to $2,270,499,203, an increase of $637,300,244, or a 39.0% increase in values over 2004 values. In addition, assessed values within the geographic area formerly known as the South Pointe redevelopment district increased from $1,727,803,898 to $2,474,516,070, an increase of $446,712,172, or a 25.9% increase in values over 2004 values. DETERMINING THE OPERATING MILLAGE LEVY The first building block in developing a municipal budget is the establishment of the value of one mill of taxation, wherein the mill is defined as $1.00 of ad valorem tax for each $1,000 of property value. For the City of Miami Beach, this value is determined by the 2005 Certification of Taxable Value and has been set at $17,445,767. Florida Statutes permit a discount of up to five percent for early payment discounts, delinquencies, etc. For the City of Miami Beach, the discount utilized is 3.5 percent. Therefore, the 96.5 percent value of the mill is $16,835,165. Preliminary budget estimates reveal that the millage rate of 7.481 mills will be sufficient to fund a current, basic service level as it presently exists, and service enhancements desired by the community, into the next year. It also reserves 0.182 mills for Capital Renewal and Replacement needs. The proposed millage rate of 7.299 mills for general City operations will generate ad valorem tax revenues of $122.9 million, $24 million more than the prior year levy of $98.9 million, reflecting a 24% increase. Ofthe total citywide ad valorem tax revenues of $122.9 million, $13.7 million will be transferred to the Redevelopment Agency for the City Center Redevelopment district for a net of $109.2 million. $7.7 million of the $109.2 million is restricted for expenditures within the geographic area formerly known as South Pointe redevelopment district for net ad valorem revenue total of $101.5 million in the General Fund available for use Citywide. FY 2005/2006 Proposed Millage Rate July 27,2005 Page 13 DETERMINING THE DEBT SERVICE MILLAGE LEVY The debt service payment for FY 2005/06 is $ 9,966,418 and requires a tax rate of 0.592 mills. This rate is 0.156 mills, or twenty and nine tenths percent (20.9%) less than the FY 2004/05 rate of 0.748 mills. The decrease in millage of 0.156 is proposed to be dedicated to reduce the overal.1 millage by 0.100 mills and the remaining 0.056 mills for Capital Renewal and Replacement. COMBINING THE OPERATING AND DEBT SERVICE MILLAGE LEVIES Illustrated below is a comparison of the combined millage rates and ad valorem revenues to the City of Miami Beach for FY 2004/05 (final) and FY 2005/06 (preliminary) including RDA. T ax Rate Tax Levy FY 04/05 FY 05/06 Incl(Dec) FY 04/05 FY 05/06 Incl(Dec) General Operating 7.425 7.481 0.056 $99,295,022 $125,943,869 $26,648,847 Debt Service 0.748 0.592 (0.156) 10.003.054 9.966.418 (36.636) TOTAL 8.173 8.073 (0.100) $109,298,076 $135,910,287 $26,612,211 If these recommended millage rates are tentatively adopted, then the combined operating tax rate millage will decrease by 0.100 mills as compared to the current year. The operating millage for Capital Renewal and Replacement will increase by 0.056 mills and debt service millage will decrease by 0.156 mills. COMBINING JURISDICTIONAL OPERATING AND DEBT SERVICE MILLAGE LEVIES City of Miami Beach property owners must also pay property taxes to Miami-Dade County, the Miami-Dade County School Board, the South Florida Water Management District, and the Florida Inland Navigation District. In FY 04/05, the Miami Beach portion of the total tax bill was 33.03 percent. The recommended millage rates for FY 2005/06 will place the Miami Beach portion of the tax bill at 33.2 percent based on tax rates announced by other jurisdictions. Revised FY 2005/06 tax rates may be considered by Miami-Dade County on September 6, 2005. The countywide tax rate will decrease to 5.867 mills; the County's debt service will remain at 0.285 mills. The Library District has announced that the millage will remain at 0.486 mills. While it is not possible to determine the exact amount returned in additional services, it should be noted that Miami-Dade County returned approximatelv $17 million durin" FY 2004/05 in tax-increment funds for the Redevelopment A"encv and its two tax-increment districts. FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 14 The Miami-Dade County School Board is scheduled to discuss its final tax rate on September 7, 2005 but has tentatively announced a rate of 8.438 mills; a decrease of 0.249 mills. The South Florida Water Management District has proposed no increase from the current rate of 0.697 mills. The South Florida Inland Navigation District has proposed no increase from the current rate of 0.039 mills. Illustrated in the following chart are the current and proposed tax rates for the multiple taxing authorities. Adopted Proposed % %of Taxing Jurisdiction FY 04/05 FY 05/06 Incl(Dec) Change Total Miami Beach General Operating 7.299 7.299 0.000 0.0 33.2 Capital Replacement 0.126 0.182 0.056 44.4 Debt Service 0.748 0.592 (0.156) (20.9) Miami-Dade County Countywide Operating 5.935 5.867 0.068 (1.2) 29.1 Library 0.486 0.486 0.000 0.0 Children's Trust 0.442 0.431 (0.011 ) (2.5) Debt Service 0.285 0.285 (0.000) 0.0 School Board 8.687 8.438 (0.249) (2.9) 34.7 Other 0.736 0.736 0.000 0.0 3.0 Totals 24.744 24.316 (0.428) (1.7) 100.0 COMBINED MILLAGE LEVY IMPACT ON THE HOMEOWNER Amendment 10 to the State Constitution took effect on January 1, 1995 and limited the increase in assessed value of homesteaded property to the percentage increase in the consumer price index (CPI) or three percent (3%), whichever is less. For 2005, the CPI has been determined to be 3.3 percent and therefore, the increase is capped at 3% for increased values as of January 1,2005. The $25,000 homestead exemption is applied after the increase in value as follows: assuming that the average residential property in Miami Beach was valued at $233,000, that value is increased by the 3% to a new value of $239,990. The homestead exemption of $25,000 is then deducted, yielding a taxable value of $214,990. FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 15 Using the proposed tax rates, that value is then taxed as follows: Taxing Jurisdiction Proposed @ 7.299 0.182 0.592 8.073 Operating Capital Renewal & Replacement Debt Service Miami Beach Miami-Dade County School Board Other $51.02 Operating 12.92 Capital Renewal & Replacement (28.31) Debt Service $35.63 32.96 7.19 ~ Totals $ 80.92 At the combined proposed millage rate of 8.073, the total dollars for Operating, Capital Renewal and Replacement, and Debt Service paid to the City when compared to the prior year's taxable value of $233,000 and 8.173 millage rate, would increase by $35.63. The overall taxes would increase by $80.92. This, of course, assumes that the other taxing jurisdictions adopt these millages. BUDGET RECOMMENDATION The Administration recommends that you adopt the operating millage rate of 7.481 mills (includes 0.182 for Capital Renewal & Replacement) and 0.592 mills for debt service, which will maintain current basic service levels, fund operational costs for projects as they come on-line, fund enhanced service levels as possible and dedicate funds for Capital Renewal and Replacement. In addition, you may select any millage rate up to the constitutional cap of 10 mills. FIRST PUBLIC HEARING The first public hearing on the proposed millage rates and tentative budgets for Fiscal Year 2005/06 must be held no later than 80 days (September 18th) or earlier than 65 days (September 3rd) from the start of the TRIM ("Truth In Millage") calendar (July 1 st). Other guidelines are: 1) the public hearing cannot be scheduled on a Sunday or on those days utilized by Miami-Dade County or the Miami-Dade County School Board for their public hearings; and 2) if on a day other than Saturday, the public hearing must be after 5:00 P.M. FY 2005/2006 Proposed Millage Rate July 27, 2005 Page 16 Based on these guidelines, the first hearing must be held between September 3rd and September 18th. These dates are unavailable for the following reasons: September 3, 10 and 17 September 6 and 20 September 7 Sundays Miami-Dade County Public Hearings Miami-Dade County School Board Public Hearing Of the remaining days, it is recommended that the first public hearing be set for Thursday, September 8, 2005 at 5:01 P.M., in the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami Beach, Florida. ACKNOWLEDGEMENTS The development of this year's proposed budget has taken a great deal of time, energy, and hard work. I would like to thank you, Mayor Dermer, and the Members of the Miami Beach City Commission, for your continued guidance, support and leadership with the budget process and in helping to accomplish so much on behalf of our residents and for the entire Miami Beach community. Together, we continue to make Miami Beach a world- class city and a better place for everyone to live, work, visit and play. I would also like to thank all our employees for their continued commitment to the City's mission of providing excellent public services and working so hard to help accomplish so many positive results that benefit the entire community. This year's budget preparations were again challenging and I would like to thank all staff from throughout the City who worked so hard to ensure that this year's process resulted in a fiscally prudent and balanced budget. I would particularly like to thank my Assistant City Managers, Chief Financial Officer, all Department and Division Directors. I appreciate all of us working together to accomplish our goals. In particular, I would like to recognize and thank Kathie Brooks, Director of the Office of Budget and Performance Improvement (OBPI), Jose Cruz, Budget Officer, Carmen Carlson, William Gonzalez and Joseph Reilly, Senior Management and Budget Analysts, Sailyn Arce-Christiansen and Paula Calderon, Office Associates who all worked so hard in continuing to enhance the budget process to ensure and encourage greater input and direction from all City departments as well as the City Commission, in developing the Operating Budget by increasing the focus on measurable performance results, and developing an enhanced budget book that is more comprehensive and informative to the public. JMG:KGB:JC