98-22855 RESO
RESOLUTION NO.
98-22855
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, SETTING THE
PROPOSED MILLAGE RATES FOR FY 1998/99, 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 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 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 1998/99
General Operating
Debt Service
7.999 mills
1.484 mills
2)
Rolled-Back Rate
7.090 mills
3) The first public hearing on the proposed millage rate and the tentative budget for
Fiscal Year 1998/99 shall be held on Thursday, September 10, 1998 at 5:01 P.M., in
the City Commission Chambers, City Hall, 1700 Convention Center Drive, Miami
Beach, Florida.
PASSED and ADOPTED, this 15th day of July, 1998.
~~
MAYOR
ATTEST:
~r~
CITY CLERK
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
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'Date
Ciiy Attorney
~ITY OF MIAMI BEACH
;ITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
ttp:\\cLmiami-beach. fl. us
COMMISSION MEMORANDUM NO. .5:15 -9 g
TO:
Mayor Neisen 0, Kasdin and
Members of the City Co mission
DATE: July IS, 1998
FROM:
Sergio Rodriguez
City Manager
,
SUBJECT:
A RESOLUTI N SETTING I) 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) 1998/99;
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.
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 1998/99:
General Operating
Debt Service
7.999 mills
1.484 mills
2) Rolled Back Rate (Truth in Millage)
7.090 mills
3) The first public hearing to consider the proposed millage rates and tentative budgets for FY
1998/99 shall be at 5:01p.m., Thursday, September 10, 1998 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.
This year, in response to a request by Commissioner Liebman and in recognition of the difficult
choices that the City faces in determining the FY 1998/99 operating budget, the participation of the
Commission and the community was requested at an earlier stage of the budget cycle. A budget
briefing was held on May 12 to brief the Commission and citizens on revenue projections and
department expenditure requests for FY 1998/99. On June 18, the Administration provided a
workshop, as requested by the Commission, to review the budget requests of the Police; Fire; and
AGENDA ITEM rl- I =r
DATE~-15-9~
FY 1998/99 Proposed Millage Rate
July 15, 1998
Page - 2 -
Recreation, Culture, and Parks departments. At that workshop, the Administration provided the
status of the budget process to date, and alternatives to balance the budget, along with revenue
enhancement opportunities and recommendations to reduce citywide expenditures. The Budget
Advisory Committee (BAC) hosted a public forum on June 25, 1998 to gain additional community
input. The Administration conducted an additional Commission workshop on July 1, 1998, to
update the Commission and the community on the status of the proposed budget. This process
enabled the Administration to receive Commission directives and hear funding priorities from the
community before completing the proposed operating budget for the upcoming fiscal year.
All of these activities were designed to elevate both Commission and community knowledge in the
budget process prior to the release of the FY 1998/99 Proposed Budget on July 10, 1998. It has also
been requested by Commissioner Cruz that the City adopt a multi-year strategic planning process
to address issues, identified in the budget workshops. This recommendation will be incorporated
into the planning process for the FY 1999/00 budget.
The budget process for FY 1998/99 has been particularly difficult, due to significant increases in
fixed costs that will restrict opportunities to significantly increase current service levels in the
proposed general fund budget. Increased salary and operating costs, critical capital requests,
operational costs for projects coming on line, combined with decreases in miscellaneous revenues,
have resulted in expenditure reductions in every department. The reductions, based upon thorough
analysis by staff, will ensure the delivery of current, basic services. Maintaining basic service levels
for FY 1998/99 will require a total operating budget of$108,369,817, which is $4,535,138 or 3.6%
greater than the projected FY 1997/98 operating expenditures of $ 104,628,479. Achieving this will
require a proposed millage rate of 7.999 and other revenues.
ST A TUTORY 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 ofreceipt of the "Certification of Taxable Value" (received July 1,1998),
to advise the Dade County Property Appraiser of the proposed millage rates, 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 Fiscal Year 1998/99. 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 after
this time may only be accomplished by an expensive mailing and advertising process to every
property owner on Miami Beach.
FY 1998/99 Proposed Millage Rate
July 15, 1998
Page - 3 -
ANAL YSIS OF PROPERTY VALVES IN MIAMI BEACH
On July 1, 1998, the City received the "1998 Certification of Taxable Value" from the Property
Appraiser's Office stating that the taxable value for the City of Miami Beach is $6,964,723,252,
including $181,746,014 in new construction, which is the second largest increase this City has
experienced in its recent history.
Property Value Trends
1986 to 1998
$8.0
$80
The preliminary 1998 value represents an increase of 8.6 I
$60
percent over 1997's final value of $6,413,421,838.
Alternately, the increase is 7.8 percent over 1997's j $4.0
preliminary value of $6,463,734,814. The difference of $2.0
$50,312,976 between 1997's preliminary and final values
represents the equalization loss of 0.8 percent due to appeals, $0.0
etc.
$6.0
$4.0
$2.0
$0.0
o e~~~"ry Ed ~~r: _ c::"Zltion
The comparative assessed values for the Miami Beach Redevelopment Agency South Pointe
redevelopment district increased by $60,947,373 or 13.1 percent from $464,050,979 to
$524,998,352; the values in the City Center redevelopment district increased by $94,278,578 or 17.7
percent from $531,364,583 to $625,643,161.
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 1998 Certification of Taxable
Value and has been set at $6,964,723. 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 $6,720,958.
Preliminary budget estimates reveal that the proposed millage rate of 7.999 mills will be sufficient
to fund a current, basic service level as it presently exists, and selected service enhancements, into
the next year.
The proposed millage rate of7.999 mills will generate ad-valorem tax revenues of$53,760,943 (of
which $6,067,325 will be transferred to the Redevelopment Agencies) for a net increase .of
$47,693,618 to the General Fund. This amount is $5,451,470 greater than the current year projected
revenues of $42,242, 148, reflecting a 12.9 % increase.
DETERMINING THE DEBT-SERVICE MILLAGE LEVY
The debt-service payment for FY 1998/99 is $ 9,973,902 and requires a tax rate of 1.484 mills. This
rate is 0.227 mills, or thirteen and three (13.3%) percent less than the FY 1997/98 rate of 1.711 mills.
FY 1998/99 Proposed Millage Rate
July 15, 1998
Page - 4 -
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 1997/98 (final) and FY 1998/99 (preliminary).
Tax Rate Tax Levy
FY 97/98 FY 98/99 Inc/(Dec) FY 97/98 FY 98/99 Inc/(Dec)
General Operating 7.499 7.999 0.500 $46,4 I 0.951 $53,760,943 $7,349,992
Debt Service l1l.!. 1.484 (0.227) 10 589.297 9973.902 (615395)
TOTAL 9.210 9.483 0.273 $57.000,248 $63,734,845 $6,734,597
If these recommended millage rates are tentatively adopted, then the combined tax rate will increase
by 0.273 mills, or 2.9% over the current year. The operating millage will increase by .500 mill or
6.7%; and debt-service millage will decrease by 0.227 mills, or thirteen and three tenths percent
(13.3%).
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 1997/98, the Miami Beach portion of the total tax bill was 33.3
percent. The recommended millage rates for FY 1998/99 will increase the Miami Beach portion
of the tax bill to 33.9 percent based on tax rates announced by other jurisdictions.
Revised FY 1998/99 tax rates will be considered by Miami-Dade County on September 3, 1998.
The countywide tax rate will increase by 0.244 mills from 6.023 to 6.267 mills; however the
County's debt service will decrease by 0.087 mills from 0.929 to 0.842 mills. An increase for the
Library District has been announced of 0.018 mills from 0.316 to 0.334 mills. While it is not
possible to determine the exact amount returned in additional services. it should be noted that Dade
County returned $3.680.329 during FY 1997/98 in tax-increment funds for the Redevelopment
Agency and its two-tax increment districts.
The Dade County School Board is scheduled to discuss its proposed tax rate on July 27th, but has
tentatively announced a decrease of 0.236 mills from 10.462 to 10.226 mills. It must be noted that
this value is subject to change after the State of Florida reviews the counties' tax rolls and determines
the "local required effort" by Dade County.
FY 1998/99 Proposed Millage Rate
July 15, 1998
Page - 5 -
Illustrated below are the current and proposed tax rates for the multiple taxing authorities.
Adopted Proposed % %of
Taxing Jurisdiction FY 97/98 FY 98/99 Inc/(Dec) Change Total
Miami Beach 33.9
General Operating 7.499 7.999 0.500 6.67
Debt Service Uti 1.484 (0.227) (13 27)
Dade County 26.7
Countywide Operating 6.023 6.267 0.244 4.05
Library 0.316 0.334 0.018 5.70
, Debt Service 0.929 0.842 (0.087) (9.36)
School Board 10.462 10.226 (0.236) (2.26) 36.7
Other 0.747 0.747 0.000 0.00 2.7
Totals 27.687 27.899 0.212 0.766 100.0
COMBINED MILLAGE LEVY IMP ACT 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 1998, the cpr has been determined to be 1.7 percent
and thereby establishes the limit for increased values as of January 1, 1998. 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 $140,000, that value is increased by the 1.7% to a new value
of $142,380. The homestead exemption of $25,000 is then deducted, yielding a taxable value of
$117,380. That value is then taxed as follows, using the alternative tax rates shown:
Taxing ROLLBACK CURRENT PROPOSED
Jurisdiction @ 7.090 @ 7.499 @ 7.999
Miami Beach $(52.73) $17.85 $53.96
Dade County 37.84 37.84 37.84
School Board (2.80) (2.80) (2.80)
Other 1.78 ~ ~
Totals ($15.91) $32.09 $90.78
Under the assumptions above, the total operating dollars paid to the City of Miami Beach at the
rolled-back millage rate would decrease by $52.73; at the current operating millage rate, the tax
increase would be $17.85; at the proposed operating millage rate, the tax increase would be $53.96.
This, of course, assumes that the other taxing jurisdictions adopt these millages.
FY 1998/99 Proposed Millage Rate
July 15, 1998
Page - 6 -
BUDGET ALTERNATIVES AND RECOMMENDATIONS
There are three baseline options: adopt the rolled-back rate of 7.090 which will not maintain basic
service levels and require drastic, additional, across-the-board budget reductions; maintain the
current millage rate of 7.499 which will be insufficient to maintain the current basic service levels
in the ensuing fiscal year and require additional, significant cuts; adopt a millage rate of 7.999, which
will maintain current basic service levels, fund operational costs for projects as they come on-line,
and fund essential enhancements to service levels as possible. In addition, you may select any
millage rate up to 9.035. This represents the constitutional cap of 10 mills reduced by the millage
established for the dependent taxing districts of Normandy Shores of 0.965.
The Administration recommends that you adopt 7.999 mills to maintain basic service levels.
However, it must be noted that any rate below 7.999 will require additional reductions from the
current service level.
FIRST Pl,TBLIC HEARING
The first public hearing on the proposed millage rates and tentative budgets for Fiscal Year 1998/99
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 1st). Other guidelines are: 1) the public
hearing cannot be scheduled on a Sunday or on those days utilized by Miami - Dade County or the
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.
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 6, 13
September 10
September 3, 17
Sundays
Dade County School Board Public Hearing
Miami - Dade County Public Hearings
Of the remaining days, it is recommended that the first public hearing be set for 5:01 P.M.,
Thursday, September 10, 1998 in the City Commission Chambers, City Hall, 1700 Convention
Center Drive, Miami Beach, Florida. Because no Commission meeting is set for that date, this will
be a special meeting of the Commission.
I wish to take this opportunity to thank the Office of Management and Budget, the Finance Direct.or,
the Department Directors, Assistant City Managers, and all City personnel that worked so diligently
on this budget. The Administration looks forward to continued assistance from the Budget Advisory
Committee, the City Boards and Committees, and community groups upon release of the Proposed
Budget and at the public hearings to be held in September.
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