Loading...
2007-26638 ResoRESOLUTION N0. 2oo7-2bb38 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING TENTATIVE BUDGETS FOR THE GENERAL, RDA AD VALOREM TAXES, ENTERPRISE, AND INTERNAL SERVICE FUNDS FOR FISCAL YEAR 2007108 SUBJECT TO A SECOND PUBLIC HEARING SCHEDULED ON WEDNESDAY, SEPTEMBER 2fi, 2007 AT 5:01 P.M. NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the City of Miami Beach hereby adopts tentative budgets for the General, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal Year 2007108 as summarized and listed below, subject to a second public hearing scheduled at 5:01 P.M., Wednesday, September 26, 2007. REVENUES GENERAL OPERATING REVENUES Ad Valorem Taxes Ad Valorem Taxes-Capital Renew/Rep?. Ad Valorem Taxes-S.Pointe Cap R & R. Ad Valorem Taxes-Normandy Shores Other Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeits Interest Rents and Leases Miscellaneous Other-Resort Tax contribution Other-Non Operating revenues Subtotal G.O. DEBT SERVICE Ad Valorem Taxes Subtotal FUND TOTAL RDA FUND-City TIF only Ad Valorem Taxes-RDA City Center FUND TOTAL ENTERPRISE FUNDS Convention Center Parking Sanitation Sewer Operations Stormwater Operations Water Operations FUND TOTAL INTERNAL SERVICE FUNDS Central Services Fleet Management Information Technology Property Management Risk Management FUND TOTAL GENERAL RDA ENTERPRISE TOTALS INTERNAL & G.O. DEBT SERVICE $ 121,832,447 $ 121,832,447 3,266,096 3,266,096 234,435 234,435 148,819 148,819 22,833,300 22,833,300 14,941,425 14,941,425 10,713,940 10,713,940 8,242,350 8,242,350 1,975,000 1,975,000 6,200,000 6,200,000 4,371,150 4,371,150 7,479,915 7,479,915 20,571,309 20,571,309 7,689,351 7,689,351 $ 230,499,537 $ 230,499,537 $ 6,160,075 $ 6,160,075 $ 6,160,075 $ 6,160,075 $ 236,659,612 $ 236,659,612 $ 17,690,977 $ 17,690,977 $ 17,690,977 $ 17,690,977 $ 16,979,466 $ 16,979,466 26,875,393 26,875,393 14, 774, 232 14, 774, 2 32 30,268,117 30,268,117 8,150,000 8,150, 000 $ 121,023,774 $ 121,023,774 $ 830,544 7,628,820 13,611,746 9,758,999 $ 48,747,800 TOTAL -ALL FUNDS $ 236,659,612 $ 17,690,977 $ 121,023,774 $ 375,374,363 $ 48,747,800 APPROPRIATIONS DEPARTMENTIFUNCTION MAYOR & COMMISSION ADMINISTRATIVE SUPPORT SERVICES CITY MANAGER Communications BUDGET & PERFORMANCE IMPROVE FINANCE Procurement Information Technology HUMAN RESOURCES Risk Management Labor Relations CITY CLERK Central Services CITY ATTORNEY ECONOMIC DEV. & CULTURAL ARTS Economic Development ECONOMIC DEVELOPMENT BUILDING PLANNING Cultural Arts TOURISM & CULTURAL DEVELOP. CONVENTION CENTER OPERATIONS NEIGHBORHOOD SERVICES PARKS & RECREATION PUBLIC WORKS Property Management Sanitation Sewer Operations Stormwater Operations Water Operations CAPITAL IMPROVEMENT PROJECTS PARKING FLEET MANAGEMENT PUBLIC SAFETY POLICE FIRE CITYWIDE ACCOUNTS Capital Investment & Upkeep Normandy Shores District Operating Contingency Other Accounts Transfers Capital Reserve Fund Pay-As-You-Go Capital Fund Info & Comm Technology Fund CAPITAL RENEWAL & REPLACEMENT SOUTH POINTE CAPITAL R & R Subtotal GENERAL & G.O. DEBT $1,403,877 2,289,042 1,224,962 1,904,001 4,274,374 926,568 1,462,177 339,991 1,669,012 4,213,126 933,299 8,689,391 3,215,399 3,147,135 5,532,938 28,142,606 6,222,817 3,376,245 76,957,768 45,619,552 1,280,000 203,833 1,300,000 11,270,894 2,500,000 7,500,000 1,400,000 3,266,096 234.435 ~ ~ RDA ENTERPRISE TOTALS INTERNAL SERVICE $ 1,403,877 2,289,042 1,224,962 1,904,001 4,274,374 926,568 13,611,746 1,462,177 16,917,691 339,991 1,669,012 830,544 4,213,126 933,299 8,689,391 3,215,399 3,147,135 16,979,466 16,979,466 5,532,938 28,142,606 6,222,817 9,758,999 14,774,232 14,774,232 30,268,117 30,268,117 8,150,000 8,150,000 23,976,566 23,976,566 3,376,245 26,875,393 26,875,393 7,628,820 76,957,768 45,619,552 1,280,000 203,833 1,300,000 11,270,894 0 2,500,000 7,500,000 1,400,000 3,266,096 234.435 $234,499,537 $ 0 $ 121,023,774 $ 351,523,311 $ 48,747,800 APPROPRIATIONS -continued DEPARTMENT/FUNCTION G.O.DEBT SERVICE Debt Service Subtotal RDA FUND-City TIF only RDA City Center Subtotal TOTAL -ALL FUNDS f + 9 4 GENERAL RDA ENTERPRISE TOTALS INTERNAL & G.O. DEBT SERVICE 6,160,075 6,160,075 $ 6,160,075 $ 6,160,075 17,690,977 $ 17,690,977 $ 236,659,612 $ 17,690,977 $ 121,023,774 $ 375,374,363 $ 48,747,800 PASSED and ADOPTED this 17t" day of S~~tember, 2007. /MAYOR David Dermer ATTEST: U CITY CLERK Robert Parcher APPRO'.~Eq AS TO ~t?RM & LANGUAGE ~ ~oR Eau~cu~aN ~ ~3~ ~._-._ ^~ Date COMMISSION ITEM SUMMARY Condensed Title: A resolution of the Mayor and City Commission of the City Of Miami Beach, Florida, adopting tentative budgets for the General, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal Year 2007/08 subject to a second public hearing scheduled on Wednesday, September 26, 2007 at 5:01 P.M. rev intenaea uutcome ~upporzea: Ensure expenditure trends are sustainable over the long term --Improve the City's overall financial health and maintain overall bond rating --Increase Community Satisfaction with City Services Supporting Data (Surveys, Environmental Scan, etc.): Based on the 2007 community survey, quality of life in the City is rated highly, the City is seen as an `excellent' or `good' place to live, work, play or visit (and majority feel it's getting better) over 3/'s of residents would recommend it to others as a place to live; and dramatic improvements in business ratings were seen across several areas. Safety, traffic, cleanliness, and impact of construction are the most important areas affecting quality of life; and road conditions, parking, storm drainage, addressing homelessness, availability offamily-friendly cultural activities, and overall satisfaction with the Building Department were identified as key areas of focus. Issue: Shall the Mayor and City Commission adopt the attached resolution establishing tentative budgets for the General, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal Year 2007108 and setting the date for the second public hearing? item ~ummarv~rcecvmmenaativn: The FY 2007108 Proposed Work Plan and Budget provides significant tax relief to the community by reducing the overall combined millage 23% (a reduction of $436 paid to the City by the a $295,000 homesteaded property owner) and at the same time continues to address community priorities: • Focuses on taxpayer value -continuing free access/reduced fees to programs and facilities; • Maintains recently implemented priorities identified by the community: more police (on the beach, late night in South Beach, for traffic), increased sanitation, additional Building Department staff, increased funding for landscape replacement and reforestation, increased capital funding for projects ,etc.; and • Continues structural changes to ensure the sustainability of the city in the long term. Adviso Board Recommendation: Financial Information: Source of Amount Account Funds: 1 $230,499,537 General Fund Operating 2 $ 6,160,075 G.O. Debt Service 3 $ 17,690,977 RDA Funds-Ad Valorem Taxes 4 $121,023,774 Enterprise Funds 5 $ 48,747,800 Internal Service Funds OBPI Total $ 375,374,363 * Net of Internal Service Funds Financial Impact Summary: The 23%millage reduction resulted in a gap of approximately $27 million in the General Fund due to the decreased revenues and annual cost increases. To address this gap, contingencies were removed, and reductions were made in overtime, travel, training, subscriptions, supplies, contracts, etc. Further, a modified zero-based analysis identified potential reductions in services not successful in achieving the desired results of our strategic plan. Augmented by $7.8 million in increased revenues, reductions included $0.5 million in property insurance, $2.2million innon-personnel operating costs, $3.3 million in additional transfers to the 11 % reserve, $1 million to risk managementfund, $4.9 million for the Homeowners Dividend, $3.3 million in additional cutting/efficiencies, reorganizations, etc. (with $2.4 million in the General Fund); and $4.1 million in service reductions (with $3.9 million in the General Fund . As a result, 96 ositions are eliminated, with almost half in mans ement/administration. Ci Clerk's Office Le islative Trackin : Sign-Offs: ~ Department Director ~ Assistant City Manager ~ ~ City Manager ~ m MIAMIBEACH vA6E AITEM ~~~a ~ DATE 9~~1-OAT m MIAMI BEACH City of Miami Beath, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM T0: Mayor David Dermer and Members of the City Commission FROM: Jorge M. Gonzalez, City Manage , DATE: September 17, 2007 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ADOPTING TENTATIVE BUDGETS FOR THE GENERAL, RDA AD VALOREM TAXES, ENTERPRISE, AND INTERNAL SERVICE FUNDS FOR FISCAL YEAR 2007108 SUBJECT TO A SECOND PUBLIC HEARING SCHEDULED ON WEDNESDAY, SEPTEMBER 2fi, 2007 AT 5:01 P.M. ADMINISTRATION RECOMMENDATION The Administration recommends that the City Commission adopt the attached Resolution which establishes tentative budgets for the General, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal Year (FY) 2007/08. PROCEDURE As outlined in the companion Agenda Item R7A1, Section 200.065, Florida Statutes specifies the manner in which budgets are adopted. First, the tentative millage rate for both the general operating and debt service is adopted, then immediately thereafter, tentative budgets by fund are adopted. The attached Resolution adopting tentative budgets for the General, RDA Ad Valorem Taxes, Enterprise, and Internal Service Funds for Fiscal Year 2007108 is therefore presented to you at this time for adoption. BACKGROUND Over the last several years, the City of Miami Beach has strived to adopt budgets that provided tax and fee relief while at the same time providing service levels enhancements (primarily in public safety, cleanliness of rights-of-ways and other public areas, landscaping and beautification, parks and cultural arts programming, and buildingldevelopment functions) that address needs and priorities identified by the community; and providing structural changes that enhance capital funding and reserves. To this end, in FY 2005106 and FY 2006107 the City of Miami Beach provided for additional tax relief by issuing Homeowner Dividends of $200 and $300, respectively, to all homeowners in the City; enhanced free services to the community; and absorbed fee increases in water, sewer and sanitation. In FY 2006/07 the overall combined millage rate went from 8.073 to 1.673, an unprecedented reduction of 0.4 mills. Further, the combined millage rate overall for FY 2006107 was set at an entire 1.0 mill lower than it was in FY 1999100. Adopting Tentative Budgets September 17, 2007 Page 2 DECISION-MAKING PROCESS The budget development process has included participation from within and from outside City Hall including the following: A Retreat on April 27t" and 28t" to provide preliminary budget information to the Commission and establish priorities. Finance and Citywide Projects Committee meetings were held on June 29 and July 19, 2007 to provide preliminary General Fund revenue projections and department expenditure requests for FY 2007108, and particularly the impact of property tax legislation. 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 continued to refine our strategic priorities with information obtained from our second 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. Based on the 2007 Community Satisfaction Surveys, it appears that many of the recent service level enhancements have been increasing community satisfaction levels with our services, businesses satisfaction; and resident satisfaction with cleanliness, availability of family-friendly cultural activities, handling of special events (by South Pointe residents), and increased satisfaction with the amount of information received from the City (when getting information directly from the City}. Accordingly, at the April 2007 Commission Retreat, the focus for the FY 2007/08 budget development process was providing further tax relief while maintaining service enhancements to address the priorities of the community. At the June 29, 2007, Finance and Citywide Projects Committee, the impacts of the June 2007 property tax legislation was presented. The Committee recommendation was to set the tentative millage for the July 11 ~' meeting at the State mandated level of Roll-Back plus an additional 9 percent reduction. On July 19~', a Finance and Citywide projects Committee was held to review General Fund component of the FY 2007!08 Work Plan and Budget, including alternatives to reduce costs and potential fee increases. The resulting Proposed Operating Work Plan and Budget for FY 2007108 was prepared based on four themes: (1)provide significant tax relief; (2} continue to increase taxpayer value for services through free services and price reductions for residents; (3) continue the structural changes for the future that were incorporated in FY 2005106 that ensure the fiscal management and sustainability for the city in the long term; and (4) maintain recently implemented enhancements to address priorities identified by the community. A copy of my message from the FY 2007108 Proposed Work Plan and Budget is attached for your review, as well as the accompanying summary of proposed reductions. Adopting Tentative Budgets September 17, 2007 Page 3 CHANGES FROM THE PROPOSED WORK PLAN AND BUDGET Subsequent to the presentation of information at the July Finance and Citywide Projects Committee meeting and the August 30, 2007 Commission Budget Workshop, we have continued to refine the assumptions and projections incorporated in the FY 2007108 Proposed Work Plan and Budget. As such you will notice changes in the budgetthatreflect information available at this time. These changes are summarized below. Although therewas general endorsementto raise the EmergencyTransportfees atboth the workshop, and the earlier Finance and Citywide Projects Committee meeting, I am postponing my recommendation to increase these fees. A significant factor in my recommendation to raise these fees, and I believe the willingness of the Commission to endorse the increase, was that we would be on parity with Miami-Dade County as they too were planning to raise fees. At this point in time, Miami-Dade County is still reviewing the proposed increase. Therefore, I have removed the Emergency Transport fee from the Proposed Work Plan and Budget. This reduces the General Fund proposed revenues by $720,000, which either needs to be made up by other revenue increases or expenditure decreases. As you know, our analysis of recommended reductions this summer was thorough and in depth. Therefore rather than recommend additional operating reductions for the FY 2007108 budget, I am recommending that we reduce the funding for the Capital Investment Upkeep Account from $2 million to $1.28 million, with the anticipation that the $0.72 million will be replaced in the Capital Investment Upkeep Account from FY 2006107 year-end surplus. Use ofyear-end surplus, is restricted by the City's financial policy, that as a one-time revenue source it can only be used to fund non-recurring expenses such as capital, transfers to reduce deficits in liability funds, etc. Funding the Capital Investment Upkeep Account at year-end from available surplus is an appropriate use of these funds. These year-end unexpended dollars are available to us this year primarily due to our efforts throughout the year of reducing expenditures in anticipation of the property tax legislation. Further, at the August 30, 2007 Commission Budget workshop significant concerns were raised regarding the proposed increases in Water and Sewer fees. In addition, questions were posed regarding the apparent inconsistency between the decrease in water consumption from the County with no decrease in sewer treatment. Similar concerns were also raised by the Budget Advisory Committee. As a result of the concerns, staff has continued to review the water and sewer consumption and treatment gallons. Based on this review, the following should be noted: • The projected water and sewer revenues for Miami Beach customer billings were projected based on an 18% decrease in consumption from Miami-Dade as well as a corresponding decrease in revenue collections beginning with the implementation of drought restrictions in April 2007 through July 2007 -although the average of 18% was used for the proposed budget, the actual decrease fluctuated between 27% and 10% per month; • The 18% decrease was projected to continue through the entire FY 2007108, a conservative approach based on current drought conditions; • Sewer treatment charges paid to Miami-Dade County during this same time period, however, did not show a corresponding decrease in gallons treated, probably due to increased infiltration into the system -this resulted in a higher ratio of sewer treated to water consumed than in prior years; • Data from our satellite cities, similarly showed no decrease in their sewer gallons treated; • Based on recent August 2007 data from Miami-Dade County, it appears that water consumption has increased somewhat to about 90% of prior year levels. Adopting Tentative Budgets September 17, 2007 Page 4 Based on this review, I have revised the proposed budget for FY 2007/08 to reflect a 10% decrease in consumption rather than an 18% decrease, thereby decreasing the size of the required fee increase for both water and sewer. The revised budget results in ratio of sewer treated to water consumed similar to prior years. At the same time, the County has deferred implementation of their proposed increase in the wholesale water rate, pending review of an alternative which would instead bring the wholesale rates paid by Hialeah and Miami Springs up to parity with other wholesale cities. Hialeah and Miami Springs have traditionally received discounted rates based on their proximity to the water treatment facility. The revised proposed fees resulting from these changes are shown in the table below. Fee FY 2007108 FY 2007/08 (per thousand FY 2006107 Proposed Fee Proposed Fee Difference from allons Fee as of 8/24/2007 Revised FY 2006107 Water $2.79 $3.45 $3.23 $0.44 Sewer ~ $4.25 $5.34 $4.93 $0.68 Combined Fee $7.04 $8.79 $8.16 $1.12 Monthly Impact to 11,000 gallon ~~ . ~A Customer ~ ~ ~~ $19.25 $12.32 However, this revision must be monitored closely. While I am being cautious in how conservative we are in projecting reductions in consumption, the reality is that the decreases are too recent to allow for any certainty. I am therefore also recommending that the water consumption and treatment rates be monitored and reported to the Commission monthly. If consumption rates dip to levels experienced this summer, additional rate increases maybe necessary. Finally, as you will recall, there was significant concerns regarding funding for the Cultural Arts Council (CAC), with direction given that any reduction in the General fund budget for the CAC should be offset with Quality of life funding. While I am pleased to say that this is the case, as we went forward, we were also able to identify an additional $80,000 in funding for CAC grants. Initially, we did not anticipate that interest earning from the Convention Development Tax capital fund would be available since we expect to award projects and expend funds that would use those available dollars this year. However, after looking at interest rates and reviewing the sequencing and timing of those capital projects we anticipate that some $50,000 in residual interest will still be available and therefore the CAC budget was adjusted accordingly. Further in combination with some reductions in expenses, this provided the ability to add $80,000 into the grants line item, increasing the number of grant applicants that the CAC is able to fund. Adopting Tentative Budgets September 17, 2007 Page 5 IMPACTS OF RECENT PROPERTY TAX LEGISLATION The Proposed Operating Budget incorporates the impacts of the property tax legislation adopted by the state legislation in June 2007. The legislation provides for a rollback and a cap of millage rates for FY 2007108 and beyond as well as a special election to be held in January to approve constitutional changes to the homestead exemption and changes in the assessment of affordable housing, working waterfronts and a $25,000 exemption of tangible personal property. The constitutional changes, if approved, would be applicable in the FY 2008!09 budget. Rollback and Cap Legislation The rollback legislation requires the City of Miami Beach to reduce property tax collections in FY 2007108 to the roll back rate plus an additional 9% reduction. The rollback rate is the millage rate required to produce the same level of property tax revenues in FY 2007/08 as collected in FY 2006107, thereby forfeiting any revenues associated with growth in assessed values. The rollback rate is calculated by dividing the prior year property tax revenues by the current year property values, after new construction, major improvements, annexations, and tax increment districts are removed from current year property values. In future years, growth in property tax revenues will be limited to increases in state personal income growth and increases due to new construction. Under the new legislation, the City may elect to approve millage rates above these levels subject to an extraordinary vote by the Commission or referendum: • A millage above the 9% reduction but at or below rollback requires a supermajority of the Commission. • Millage above rollback but at or below current millage requires unanimous approval of the Commission. • Millage above current levels requires a referendum. Proposed Constitutional Changes The proposed constitutional changes to be considered in an election on January 29, 2008 are as follows: All Homestead Properties: • Exemption of 75% on the first $200,000 in value • Exemption of 15% between $200,000 and $500,000 in value • $50,000 minimum homestead exemption for all property owners • $100,000 exemption for low income seniors • Annual increases in the $500,000 cap based on increases in state personal income growth • Current homesteaded property owners have the option to choose to remain under the Save Our Homes 3% cap or select the new exemptions • All new property owners after January 1, 2008 would receive the super exemption but would no longer receive the Save Our Homes 3% cap • The legislature would be able to increase the $500,000 cap on the 15% exemption during any legislative session by 213rds vote Tangible Personal Property • Authorizes the legislature to provide an exemption of not less than $25,000 for tangible personal property by a simple majority vote Adopting Tentative Budgets September 17, 2007 Page 6 Affordable Housing Subject to Rent RestrictionslVUorking Waterfront Properties • Allows these properties to be assessed at market value as provided by general law The legislation specifically requires calculations of rollback for FY 2008/09 to be done so as to avoid millage increases to offset the revenue loss due to the assessment changes Impact of June 2007 Property Tax Legislation The estimated impact of the legislation is as follows: Approximately $24 million in "growth" revenue is forfeited in FY 2007/08. A portion of this growth would have allowed us to absorb normal increases in salary and fringes as well as other normal increases due to inflation. At the same time, as in prior years, a portion would have been used to provide some tax relief to the community. Typical increases have been around 6% to 8% of recurring operating costs, approximately $10 million from the FY 2006107 budget. While each year as part of the budget process Departments are directed to review their Current Service Level budgets to identify potential efficiencies, line items that can be reduced, etc., this year Departments were given more stringent instructions. I directed staff to review their budgets even more carefully for efficiencies and savings, and where possible, to reduce expenditures to the same level as FY 2006107 despite the increases in salary and fringe and other normal CPI adjustments. • Approximately $13.8 million is reduced from FY 2006107 collections in FY 2007108 due to the additional 9% reduction required by the State. Based on the June 1 preliminary estimates, this 9% further reduces the operating millage rate to 5.6555. • Approximately $2 million in additional lost revenues is estimated for FY 2008109 due to the proposed constitutional changes, if approved. Other Impacts to FY 2007/08 Property Tax Revenues In addition to the recent legislation, property taxes are also impacted by revised valuations from the property appraiser as well as new construction. $ Value July 29, 2007 Estimated reduction in Property Tax Collections $ 13.8 million Chan es Due to revised taxable values for 2006 Reductions to the calculated Rolled-Back Milla e $ 3.1 million Revision to the assumed rate of collection (appeals, revaluations, etc.) $ 2.3 million New Construction Im acts $ 1.7 million Sub-total $ 3.7 million Total $ 17.5 million Adopting Tentative Budgets September 17, 2007 Page 7 These estimates of revenue impacts are for the City as a whole, FY 2007108 impacts to specific jurisdictions in Miami Beach are estimated as follows: Impact to City Property Tax Collections City Center RDA $1.1 million South Pointe Area $1.4 million General Fund $15.0 million Total $17.5 million MAINTAIN PRIORITIES IDENTIFIED BY THE COMMUNITY The FY 2007108 Proposed Work Plan and Budget provides significant tax relief to the community by reducing the overall combined millage 23% (a reduction of $436 paid to the City by a $295,000 homesteaded property owner) and at the same time continues to address community priorities: • Focuses on taxpayer value -continuing free accesslreduced fees to programs and facilities; • Maintains recently implemented priorities identified by the community: more police (on the beach, late night in South Beach, for traffic}, increased sanitation, additional Building Department staff, increased funding for landscape replacement and reforestation, increased capital funding for projects ,etc.; and • Continues structural changes to ensure the sustainability of the city in the long term. As a change from the August 24, 2007 Proposed Work Plan and Budget, no increases in Fire Transport Fees are proposed. The $720,000 decrease in revenues can be offset by a decrease in the transfer to Capital Investment Upkeep Account. Additional Capital Investment Upkeep Account can be available from FY 2006107 year-end surplus. The 23% millage reduction resulted in a gap of approximately $27 million in the General Fund. To address this gap, reductions were made in overtime, travel, training, subscriptions, supplies, contracts, contingencies etc. Further, reorganizations were identified that allow more efficient use of resources, including reducing the number of stand alone departments and divisions by merging Human Resources and Labor Relations into a consolidated department. Finally, a modified zero-based analysis identified potential reductions in services that do not strongly support our strategic plan. Augmented by $7.8 million in increased non-Ad Valorem revenues, reductions included $0.5 million in property insurance, $2.2million innon-personnel operating costs, $3.3 million in additional transfers to the 11 reserve, $1 million to risk managementfund, $4.9 million forthe Homeowners Dividend, $3.3 million in additional cutting/efficiencies, reorganizations, etc. (with $2.4 million in the General Fund); and $4.1 million in service reductions (with $3.9 million in the General Fund}. As a result, 96 positions are eliminated, with almost half in management/administration. Adopting Tentative Budgets September 17, 2007 Page 8 INCREASE TAX PAYOR VALUE FOR SERVICES -FREE OR REDUCED FEE OFFERINGS FOR RESIDENTS The Proposed Work Plan and Budget preserves benefits specifically for City of Miami Beach residents, including: • Our monthly free "Arts in the Parks" series; • Access to free cultural arts programs (theater, dance, music and visual arts) for children involved in after school and summer camps; • Scholarship specialty camps in the summer, in addition to children participating in day camps; and programs for traveling athletic leagues; • 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 both Youth Centers seven days per week; • Free Family Saturday Nights at one of our park facilities four times per year (families are welcomed, free of charge, to experience special activities); • Free Learn-to-Swim programs for three to four year-old residents; • Reduced resident rates for recreation programs; • Free "family friendly" Movies in the Park; • Special programming by the Miami City Ballet for the Miami Beach community, including a new contemporary dance series; • Free admission to museums on Miami Beach, including the Bass and Wolfsonian Museums every day and the Jewish Museum on Wednesdays, Fridays and Saturdays; • Free bi-annual Sports Expo for our residents (hosted in fall and spring, residents have an opportunity to register for sports programs offered throughout the year -games and activities such as bounce house, climbing wall, music, inflatable slide, etc.) are provided; • Free access to the majority of our senior citizen programs and special populations programs, including several free dances that take place throughout the year; • Free of charge play at the Par 3 golf course for all residents; • Free crime analysis of residents' homes by our Police Department; and • Free child safety seat checks by our Fire Department. • Free MB magazine delivered to all residential properties in Miami Beach • Discount rates for purchase of IBM/Lenovo personal computer equipment • Anticipated free Citywide WiFi access by the end of calendar year 2007 MAINTAIN STRUCTURAL CHANGES TO ENSURE SUSTAINABILITY OF THE CITY IN THE LONG TERM The Proposed Budget continues to strengthen funding for structural changes incorporated in the FY 2005106 budget as follows: Continues the annual transfer of $3.5 million in annual funding for the General Fund Capital Renewal and Replacement Fund; Provides an annual transfer of $2.5 million to the City's Capital Reserve to fund unforeseen capital project costs throughout the year,; Maintains the $7.5 million transfer to the capital pay-as-you-go component of the capital budget; Adopting Tentative Budgets September 17, 2007 Page 9 Provides $0.78 million transfer to the Capital Investment Upkeep Account for non- facility related upkeep (landscape renewal and restoration, replacement of up- lighting and pavers, etc.), and the additional $0.5 million for the comprehensive 4- year reforestation program to replace trees lost through hurricanes in the past 2 years; and Continues the $1.4 million transfer for the Information and Communications Technology Fund. These structural improvements continue to ensure that the General Fund Budget is comprised of almost 93% for on-going operations, and approximately 7% for structural components that help ensure long-term sustainability of the City and value for our residents. While ensuring value for our residents, and continuous reinvestment in our City's assets, this continues to provide flexibility in the future, and the ability to more easily adapt to changing economic conditions. WORK PLAN SUMMARY The Proposed Work Plan and Budget for FY 2007/08 continues to be aligned with and supportive of the City's Strategic Plan adopted by the Commission in 2005 to address priorities identified through surveys and focus groups of our residents, businesses and community organizations. In follow-up to the City's first ever set of community satisfaction surveys in 2005, the City conducted a set of follow-up community surveys in January 2007. The 2007 survey of residents and businesses shows that the City is making progress in addressing the needs and priorities of community. It appears that many recent service level enhancements have been increasing community satisfaction levels with our services, particularly. businesses satisfaction; and resident satisfaction with cleanliness, availability offamily-friendly cultural activities, handling of special events (by South Pointe residents), and increased satisfaction with the amount of information received from the City (when getting information directly from the City). Moreover, business results improved across many survey items, with over 40% of comparable questions increasing by at least 5 points from 2005, including overall improvement in rating the City of Miami Beach as a place to run abusiness -- and even more dramatically in the job the City of Miami Beach is doing in meeting their needs However, some of the areas identified in 2005 continue to be key areas of focus: • Pace of new construction/development • Getting Around the City, more specifically related to the areas of traffic flow, condition of roads, available parking in neighborhoods and especially in other parts of the City, availability of pedestrian trails & bike paths/lanes, and ability of public transit to get employees/customers to businesses • Addressing homelessness • Storm drainage, cleanliness of canals/waterways and condition of sidewalks • Availability (too few) of museums/theaters, family friendly activities and stores Adopting Tentative Budgets September 17, 2007 Page 10 • When contacting the City, ease of finding someone, having trained staff, and overall satisfaction with experience (but it varies based on reason for contact} • Dealing with the Building Department The Proposed Work Plan and Budget addresses these areas of focus, as well as priorities identified through public comment and feedback, public meetings, etc., and priorities identified through an environmental scan of the City's demographics, socioeconomics, and service workloads and performance data. Cleaner and Safer Safer: To help ensure continued success in this area, the only proposed reductions to Police are in management and administration, maintaining 14 of the15 officers added lastyearfollowing the recommendations of the staff ng study conducted for our Police Department in FY 2004105. The Proposed Work Plan and Budget maintains two marine officers added in FY 2005106; and two new ATV units on the beaches at night, along with the 13 additional officers with duty hours from 8pm to Gam added in FY 2006107. Together with the midnight shift deployments that occurred in FY 2005106, refinements to shift hours, and redeployment of two community policing officers from the redevelopment district officers, 21 officers will be available on the 4t" shift between the hours of 8pm and Gam (compared to seven during FY 2005106). These officers supplement those already assigned in the afternoon and evening and, together with community policing officers, provide a staffing level of 65 officers available between the hours of 10pm and tam. Further, 41 of these officers are assigned to the South Beach area, providing for more proactive assignments and reducing the need for officers to respond to calls for service from the mid-beach and north beach districts. The FY 2007/08 budget also maintains the two motor units added in FY 2006107 to assist the Parking Department with traffic enforcement. However, the City will refine the recently implemented Neighborhoods Contact Program initiated in FY 2005/06 by using existing patrol officers during the normal course of work, in lieu of eight Public Safety Officers. In addition, funding for contracted security has been reduced due to refinements in shift deployments, etc. Further, the city will maintain lifeguard coverage of 100% of our publicly accessible beaches. In FY 2006/07, the City added three lifeguard stands at Lincoln Road, 5~" Street, and 18t" Street. In FY 2007108, re-spacing lifeguard. stands between 72nd Street and 87th Street will allow a reduction in one stand Citywide, overall maintaining a net gain of two stands over the last 2 years. Cleaner: The Proposed Work Plan and Budget maintains expanded services that have been implemented in recent years, which included enhanced service in the following areas: • Along Washington Avenue from 5t" Street to Lincoln Road and along Ocean Drive, including an entertainment shift; • The Flamingo Park area; Adopting Tentative Budgets September 17, 2007 Page 11 • Lincoln Road between Washington and Collins Avenue; • Harding Avenue from 79th Street to Indian Creek, including Abbott, Byron and Carlyle (five days per week); • the Beach and Boardwalk zones; • 41 St Street and 71 St Street; • Enhanced service levels in alleys citywide and City parking lots; • Roving litter squads in both mid-beach and north beach; • Enhanced beach cleanliness through the addition of sandsifting equipment, and enhanced sanitation services from 14th street to S. Pointe; and • Additional funds for waterway cleaning. The City uses a quantitative index to assess the impact of these efforts. Comparing the first 3 quarters of FY 2005106 to the first 3 quarters of FY 2006107, the index has shown improvementof more than 16% percent. The mostsignificantimprovements have occurred in the overall streets and sidewalks scores, which have improved by 22% and 23% respectively, especially in the entertainment and residential districts. Parking lots also improved significantly -- by 21.5% ---during the same timeframe. More Beautiful and Vibrant; Mature and Stable; Unique Historic and Urban Environment The Proposed Work Plan and Budget maintains code enforcement coverage throughout the City 24 hours a day, seven days a week. Funding for the City's resident guide has been eliminated as this information is more readily available through the City's website that assures continually updated information. Further, while funding for previously proposed graffiti removal on private property has been eliminated along with the Graffiti Coordinator position, funding for removal on public property is maintained. Funding for landscaping and beautification continues to be a priority. The Proposed Work Plan and Budget provides $0.78 million in funding for replacement of landscaping, pavers, up-lighting, etc. through the Capital Investment Upkeep Account. An additional $0.72 million is anticipated to be added from surplus funds at the end of FY2006107 thereby allowing us to maintain the $1.5 million programmed in prior years. In addition, the Proposed Work Plan and Budget includes $0.5 million in funding for the City's reforestation program. Over the next 4 years, the City will replace landscaping and trees in our parks and rights-of-way that were damaged or destroyed by storms and hurricanes. Further, the City continues to focus planning efforts on growth management, concurrency, neighborhoods, and landscape planning. The Proposed Work Plan and Budget continues to provide free movies in the parks and recreational special events; free access to pools and youth centers; the scholarship programs for after-school care, summer camp, specialty camps, and traveling athletic leagues; free-of charge "learn-to-swim" program for 3 and 4 year-old residents; as well as reduced fees for intramural athletic leagues for residents. In addition, in FY 2006/07, the City established a Senior Transportation Fund in the amount of $150,000 to reimburse eligible providers of senior transportation to special events, recreation activities, etc. Successful recreation programs for teens and seniors also continue to be a priority, along with weekly classes in visual or performing arts in after school programs and summer camps. Compared to FY 2004105, use of our pools has increased from 80,000 to approximately 120,000 and participation in recreation programs has increased from 5,800 to Adopting Tentative Budgets September 17, 2007 Page 12 almost 7,000 (after school, summer camps, athletics, teen and senior clubs). Approximately 12 vacant recreation program personnel have been eliminated, where functions have essentially been absorbed by or combined with other positions. The City will monitor the impact of these reductions to ensure that participation rates and facility appearance are minimally impacted. Much has been accomplished in the last several years in addressing homelessness, with the census count for the number of homeless in the City declining from 314 in November 2000 to a low of 173 in January2007. Despite these decreases, homelessness remains a major concern throughout the City. In FY 2007108, the City will maintain funding for homeless services from prior years, including partnering with Citrus Health to provide a coordinated approach to addressing mental health issues often associated with the chronically homeless. However, funding for the homeless job program, unspent in prior years, has been eliminated. Cultural, Entertainment and Tourism Capital The City continues to expand support of the arts in recent years, including an emphasis on arts for our children aswell asfamily-oriented cultural activities. The FY 2007108 Proposed Work Plan and Budget provides funding for $630,000 for grants, with a $50,000 reduction in funding to the Cultural Arts Council offset by increases in Quality of Life funding. Although funding for arts education programming in schools has been discontinued, ongoing programs include a partnership with Arts for Learning to offer each of the selected park sites a resident artist teaching up to four classes per week, offering children enrolled in our parks after-school and summer program weekly classes in visual or performing arts. In addition, we are continuing our very successful monthly Arts in the Parks series, where we have brought music, Shakespeare, opera, plays, etc. to our residents in various parks throughout the City. From October 2006 though July 2007, over 2,000 participants attended these events. The City continues to support special events that benefit our residents. Residents have enjoyed benefits from 28 special events happening around the City, including reduced ticket prices and/or advanced offering for the annual Food and Wine Festival, Polo World Cup, Beach Tennis USA, Top Chef Presents a Taste of Miami, and Celia Cruz Day at the Bass; free access to many Superbowl events that took place on Miami Beach; and a free stage on Lincoln Road for the South Beach Comedy festival. None-the-less, since the South Beach Food and Wine Festival is now an established event, City support is not longer essential and the funding has been eliminated. In addition, the functions of the special events inspector added in FY 2005/06 will be combined with the field monitor for concessions and marketing. International Center for Innovation in Culture, Recreation and Business The Proposed Work Plan and Budget continues to focus on reducing the number of open Temporary Certificates of Occupancy and number ofoverdue re-certifications; reducing the backlog of building plan reviews and elevator inspections; reducing response time to complaints and requests; and improving customer service in our Building Department. Fifteen positions were added in the Building department in these areas over the past two years, a 20 percent increase in staffing. In addition, we have streamlined our lien process and expect to have on-line capability for lien searches available by the beginning of FY Adopting Tentative Budgets September 17, 2007 Page 13 2007/08. Technology upgrades continue to provide opportunities for improvement in this area, with implementation of on-line and electronic project plan drawing submittal and review to be implemented in FY 2007108. Well-Improved Infrastructure Along with, and related to growth management, traffic flow continues to be one of our community's major concerns. In FY 2007108 we will continue to focus on traffic flow enforcement, focusing on vehicles blocking traffic lanes and intersections. Further, the City has finalized two integrated major transportation planning studies: the Coastal Communities Transportation Master Plan that makes recommendations and provides long-term solutions to traffic concerns in the coastal communities transportation corridors; and the Coastal Community Transit Study that seeks to improve the efficiency of existing bus routes in the coastal transit corridors. We will also continue implementing pedestrian and bicycle enhancements in our capital program, including bike lanes and bicycle racks. Accomplishments inthe lastyear include: the design and installation of dedicated bike lanes along 16th Street, the design of bike lanes along Euclid Avenue, Prairie Avenue, and 73rd Street; and the installation of approximately 100 bike racks Citywide. Pedestrian and Bicycle enhancements continue to provide alternatives to the large portion of our community who do not use a car as their primary mode of travel. Further, the City continues to coordinate and fund the South Beach Local, the most successful bus circulator in the County -with average monthly ridership of 95,000 passengers compared to 60,000 for the Electrowave. The proposed Capital Improvement Plan programs approximately $475 million remaining to be appropriated. Further, as we continue with improving underground infrastructure that is more than 50 years old in our neighborhoods and renovating historic buildings in the City, we will continue to encounter challenges and unforeseen situations which could affect our project scopes and pricing. The Proposed Work Plan and Budget continues to provide $2.5 million to the Capital Reserve Fund to help ensure that projects are not delayed due to funding shortfalls, and provides $7.5 million in funding for the capital pay-as-you-go fund. From a staffing perspective, whilewe have eliminated one of two Capital ProjectCoordinator positions in the Public Works Department, staffing for the Capital improvements Office remains at the same level as budgeted for FY 2006107. In FY 2004105, the city began two important initiatives: (1) funding of the Capital Renewal and Replacement Reserve for general fund facilities; and (2) initiation of assessments of our facilities to identify and plan for both renewal and replacement needs, as well as the more routine maintenance, both of which are continued in FY 2007108. All 59 City facilities have been assessed and the FY 2007108 Proposed Work Plan and Budget funds facility renewal and replacement needs identified through these assessments. In addition, the Proposed Work Plan and Budget maintains funding of the City's pavement assessment and repair program, broken sidewalk replacement, a regular maintenance program for outfall and catch basin cleaning, as well as street light maintenance and assessments. Finally, in lieu of programming funding to provide availability of matching funds for hazard mitigation grants to harden our facilities, contingency funds may be used as matching funds if and when these grants are offered. Adopting Tentative Budgets September 17, 2007 Page 14 Sustainability: Communications, Customer Service and Internal Support Functions The Proposed Work Plan and Budget continues funding to enhance communications with our residents, enhance the availability of city services and processes that can be accessed and transacted via the internet, and preserve our technology infrastructure. To that end, the Proposed Work Plan and Budget continues to support the City's MB magazine (with reduced funding anticipated to be offset by increased advertising and/or lower costs), and the weekly Citypage in the Neighbor's Section of the Herald. Funding for placing Citypage in community newspapers is eliminated, as well as reduced funding for the internal employee newsletter MBline. A Public Information Specialist position is also eliminated that previously provided support to other departments. In addition, Answer Center staffing functions will be distributed to other departments. Liaison functions with the business community will be absorbed by the Answer Center supervisor in lieu of a dedicated business liaison position. The Proposed Work Plan and Budget maintains the $1.4 million transfer to the Information and Communications Technology Fund. In FY 2007108, funding will continue for annual finance payments related to previously approved projects (the City's WiFi project, the Disaster Recovery at the Network Access Point location -NAP, the Telephone Switch and Interactive Voice Response System at the NAP, the Storage Area Network, the Enterprise Uninterrupted Power Supply and Generator, and the Public Safety Voice Over IP project). In addition to $224,000 in funding from the Building Training and Technology Fund, new projects to be funded in FY 2007!08 include the Building Department Electronic Plan Check, Electronic Pre-Employment Background Check and Identification Machine, Electronic Human Resources Workflow Processing, and Records Imaging for Human Resources and Finance. In addition, approximately $500,000 is proposed to be set aside towards funding the Police Computer Assisted DispatchlRecords Management Systems (CAD/RMS), currently being negotiated. The Proposed Work Plan and Budget continues to ensure that expenditure trends are sustainable over the long term within the constraints of the recent property tax legislation. In General Fund, Internal Service and Enterprise Funds combined, over $3.2 million in non- personnel operating costs such as outside contracts, overtime, travel, training, subscriptions, supplies, etc. have been eliminated; and $3.3 million has been eliminated through re-organizations etc. that are anticipated to have minimal service impact. This included the elimination of 34 positions, 4 of which were made possible by services now available through the internet and other technology enhancements; and the balance being positions where functions have been absorbed by other positions or outside contracts, or combined with other functions, particularly at the management level. 30 additional management and administration support positions have been eliminated through reductions in support services that do not directly affect the community, resulting in additional savings of $2.3 million. Consistent with the City's financial policy to invest at least 5% of the operating budget in capital improvements, the Proposed Work Plan and Budget maintains approximately 93% General Fund Budget for on-going operations, and approximately 7% for capital funding. While ensuring greater value for our resident, and a continuous reinvestment in our City's assets, this continues to provide flexibility in the future, allowing us to more easily adapt to changing economic conditions. Finally, in FY 2007108, the City of Miami Beach created the Ad-Hoc Green Committee to identify and promote policies and practices within Miami Beach to achieve a sustainable environment; minimizing negative impacts and maximizing benefits to the environment. The Proposed Work Plan and Budget provides continued support to this Committee. Adopting Tentative Budgets September 17, 2007 Page 15 GENERAL FUND AD VALOREM REVENUES The net General Fund ad valorem budgeted revenue available for use Citywide decreased from $129.06 million in FY 2006/07 to $114.11 million for FY 2007108, a decrease of 14.95 million, or 9% in General Fund ad valorem revenues. Of the $129.06 million, $9.21 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 remain at $3.525 million. OTHERGENERAL FUND REVENUES Based on existing fees and revenue sources, non ad valorem revenues are anticipated to grow by approximately $7.6 million. The increased revenues include: • Increased resort tax transfers to the General Fund • New revenues from the Live Nation agreement for the Jackie Gleason; • Increased interest earnings due to higher interest rates; • Increased electrical franchise revenues; • Increased licenses and permits with the re-instatement of Fire Inspection fees, programmed increases in business tax receipts (previously called occupational licenses), and increased revenues from right-of-way and building permits; • Increased revenues from full project charge-backs by CIP, full year impacts of the off- dutyfee implemented in FY 2006!07, increased revenues from rents and leases, and revenues anticipated from the July re-opening of Normandy Shores Golf Course ($167,900}. In addition, approximately $250,000 in additional revenues are proposed from increased fees including • Increased resident rates for membership and driving range fees atthe Miami Beach Golf Club ($125,000); • increased permit fees for the use of City rights-of-way during construction projects ($56,000}, and • increased permit fees for light pole banners ($72,000). Increased charges for emergency services ($720,000), originally proposed have not been Included in the FY 2007108 budget pending outcome as to whether the County will be raising those fees also. GENERAL FUND EXPENDITURES In FY 2007/08 major drivers of Current Service Level expenditures continue to be: • Increases in salaries and fringes due to previously approved 5% COLA increase, as well as average merit increases of 2%; Adopting Tentative Budgets September 17, 2007 Page 16 • Increases in pension contributions, primarily for the Fire and Police Pension based on the actuarial estimates; and • Increases in health insurance, based on a 10% cost increase. Current Service Level expenditure projections for FY 2007108 also include: • Increases in other internal service costs primarily due to increases in Property Management and increased maintenance costs in Information Technology as new systems come on line; and • Expenditures associated with the July re-opening of the Normandy Shores Golf Course are also included ($445,812). Together, these result in an increase of $12.9 million (an increase of 5%). However, this increase is off set by $3.8 million in reductions, including: Decreased property insurance costs based on reduced property insurance levels previously approved by the Commission; Elimination of the one-time transfer for the delayed partial payment of FY 2005106 Miami-Dade County wholesale water and sewer rates; In addition, through a painstaking and thorough review of each department budget, including a modified zero-based budget approach, the following additional reductions were identified, resulting in a reduction of 83 General Fund positions: • $2.2 million in non-personnel operating cost reductions -reducing outside contracts, overtime, travel, training, subscriptions, supplies, contingencies etc.; • Elimination of $3.3 million in additional transfers to the 11 percent reserve; • Elimination of the $1 million in risk management; • Elimination of the $4.9 million in funding for the Homeowners Dividend; • $2.4 million in additional cuttinglefficiencies, reorganizations, etc.; • $3.9 million in service reductions; and • $0.7 million reduction in the transfer to the Capital Investment Upkeep Account with replacement funding anticipated from FY 2006107 year-end surplus. The resulting total Proposed General Fund Operating Budget is $230,499,537 million which is $7.2 million or 3% less than the FY 2006107 adopted budget of $237,673,096. GENERAL OBLIGATION DEBT SERVICE FUND The general obligation debt service payment for FY 2007108 is approximately $6.2 million, reflecting a decrease of $400,000. Base on the June 29 Certified Taxable Value from the Property Appraiser, these bonds would require the levy of a reduced debt service millage of 0.2415 mills. This represents a reduction of 0.0575 mills. Adopting Tentative Budgets September 17, 2007 Page 17 ENTERPRISE FUNDS Enterprise Funds are comprised of Sanitation, Water, Sewer, Stormwater, Parking, and Convention Center Departments. The Proposed FY 2007%08 Enterprise Fund Budget is $121 million, almost unchanged from the adopted FY 2006107 budget of $120.3 million, and includes a net reduction of 7.5 positions. Increases in current service level costs are primarily the result of increases in sanitation collection and disposal contract costs, salaries and benefits and increased water and sewer debt payments due to refunding water and sewer bonds. The revenues for the Sanitation Fund, Water and Sewer Funds and the Parking Fund reflect proposed fee increases as well as intergovernmental revenues received through the Amended CDT Interlocal Agreement for sanitation services along major thoroughfares, walkways, alleys, parking lots and beaches throughout the City. In the Sanitation Fund, the Proposed Work Plan and Budget includes a fee increase of $0.68 per household per month (from $37.57 to $38.25} to address current year increases in contracted collection charges and Miami-Dade County disposal charges. For the past two years, we were able to absorb these costs without fee increases. Franchise fees are also proposed to be increased by 2% from 16% to 18%, generating approximately $400,000 in increased revenues to offset cost increases. In comparison the City of Miami charges a 22% franchise fee, North Miami charges 20%, North Miami Beach charges 20%, and South Miami charges 20%. In the Water and Sewer Funds, the total combined operating budgets are $54.2 million, a reduction of $1 million from the prior year. Despite the reduction in budget, I am proposing fee increases in both water and sewer for two primary reasons: 1. Multi-year operating cost increases; and 2. Decreased water consumption and a related decrease in both water and sewer billings to residents and businesses in the City of Miami Beach -- a significant portion of which cannot be offset by decreased operating costs as the majority of system costs are fixed. As stressed in my August 24, 2007 memo, it is important to remember that since FY 1995196, the only increase to the water and sewer fees have been related to increases in either the County's wholesale rates or for debt service increases -and the prior increase related to operational costs was a 3% increase in 1992. Since 1996, all operational expenditure increases related to cost of living adjustments to salaries, increased costs of health insurance and pension, and increases in other operating costs have been absorbed without fee increases. In comparison, between October 1996 and October 2006, operational costs for water and sewer systems based on the Consumer Price Index (CPI) for Water and Sewer Maintenance increased by 47%, an average of almost 5% per year. The following charts highlight the changes in the various components of the water and sewer fees compared to CPI. i Adopting Tentative Budgets September 17, 2007 Page 18 Water Rate Increase by Category $0.90 310 $0.80 -------------------------- - 260 $0.70 ---- ------- - ---- - m $0.60 --------------- ------ --- 210 -f- CM B Debt ~ $0,50 x -___ ---__ __ _-_ 160 ~ ~-Miami-Dade Fees $0~~ ----- - - 110 a -~CM6 Operating ~ $0.30 v ---------- - - --- ------ -~-CP1- W&S Maintenance 60 $0.20 - --- - ----- $0.10 _ ___ 10 $- -40 1998 1999 2000 2001 2002 2003 2004 2005 2006 Sewer Rate Increase by Category $1.20 310 $1.00 --- - ------- --- - 260 $0.80 ------------------ ------ --------- 210 ~ x -~-CMB Debt - 160 c ~ Miami-Dade Fees ~ $0.60 _ ~, 110 a -~c--CMB Operating v ~ $0.40 ---------------- - ------------------- --f-CPI - W&S Maintenance 60 $0.20 -------------- 10 $- -40 19981999 2000 2001 2002 2003 2004 2005 2006 The City of Miami Beach began experiencing a significant decrease in water consumption with the implementation of water restrictions in April, 2001. Between April and July 2007, water purchased from Miami-Dade County decreased an average of 18%, with equivalent decreases in water and sewer revenues, with decreases varying between 27% and 10% per month. Given the information available, the Proposed Work Plan and Budget assumed that the 18% would continue through the entire FY 2007108, a conservative approach based on current drought conditions. August data, available since the release of the proposed budget, showed a decline of only 10% in water purchased from Miami-Dade County. As a result, as discussed above, the proposed fee increases for water and sewer have been decreased to reflect a revised assumption the decrease in water consumption of 10%. At the same time, the County has deferred implementation of their proposed increase in the wholesale water rate, pending review of an alternative which would instead bring the wholesale rates paid by Hialeah and Miami Springs up to parity with other wholesale cities. Hialeah and Miami Springs have traditionally received discounted rates based on their Adopting Tentative Budgets September 17, 2007 Page 19 proximity to the water treatment facility. The revised proposed increases are from $2.79 to $3.23 per thousand gallons (16%~ for water; and from $4.25 to $4.93 per thousand gallons (16%) for sewer. These revised fees represent an overall decrease in the increases originally proposed by more than one-third. Below are breakdowns of the proposed fee increases. FY 2007108 FY 2007/08 Water Fee Proposed Fee Proposed Fee er thousand allons as of 8/24/2007 Revised FY 2006107 Fee $2.79 $2.79 Increase due to Miami Dade Coun Wholesale rate $0.05 NIA Increase due to consumption im act $0.49 $0.21 Increase in 0 eratin Costs $0.12 $0.17* $3.45 $3.23 * includes impact of increased payments toMiami-Dade Countywith change in consumption from an 18% decrease to a 10% decrease. Sewer Fee er thousand allons FY 2007/08 Proposed Fee as of 8/24/2007 FY 2007/08 Proposed Fee Revised FY 2006/07 Fee $4.25 $4.25 Increase due to consumption im act $0.93 $0.52 Increase in O eratin Costs $0.16 $0.16 $5.34 $4.93 In the Parking Fund, the Proposed Work Plan and Budget includes increases in the special event fees and municipal parking permits. Special event fees are recommended to be increased from $10 to $15 next year and an additional $5 the following year; and municipal parking permits are recommended to increase from $60 to $70 per month. INTERNAL SERVICE FUNDS Internal Support Services are comprised of the Central Services, Fleet Management, Information Technology, Risk Management and Property Management Divisions. The proposed FY 2007/08 Internal Service Fund budget is $48.7 million. This represents a decrease of $2.5 million from the FY 2006107 budget, despite increases in salaries and benefits, fuel, and electrical costs. These increases are offset by decreases in property insurance, as well as a reduction of 6.5 positions. These costs are completely allocated to the General Fund and Enterprise Fund departments. Adopting Tentative Budgets September 17, 2007 Page 20 CONCLUSION The Administration recommends adoption of the attached Resolution which establishes tentative budgets for General, RDA Ad Valorem Taxes, Enterprise, and Inte~al Service Funds for Fiscal Year 2007108, subject to a second public hearing scheduled on Wednesday, September 26, 2007 at 5:01 P.M. JMG:KGB:JC i CITY OF MIAMI BEACH ~ ~ ~ ~ NOTICE OF SPECIAL COMMISSION MEETING AND PUBLIC HEARINGS . i~~ NOTICE IS HEREBY given that a Special Commission Meeting and public hearings will be held by the Mayor and City ~s: load in the Comm~ssron Chambers, 3rd floor, Ci Ha11,1700 Convention Center Commission of the. City of I~iarnr Beach, F a, hl Drive, .Miami Beach, Fk~r~ta, on Monday, Sr~ptember 17,2047, to consider he following: - ~ ~ ~ '~ 5:01 pan. THE FIRST PUBLIC HEARING ADOPTING THE PROPOSED MILEAGE RATE AND BUDGET:FOR FISCAL YEAR 2007/2008 FOR THE CITY OF MIAlNI BEACH. -5.0'2 .m. THE ~IRST PUBLIC HEARING ADOPTING THE PROPOSED MILEAGE RATE AND BUDGET FOR FISCAL YEAR 2007/2008 FOR THE NORMANDY SHORES LOCAL GOVERNMENT NEIGHBORHOOD IMPROVEMENT DISTRICT. In addition, the City Commission may discussother City business and take other necessary action at this meeting. Inquiries maybe directed to theBudget Office at (305j 673-7510. INTERESTED PARTIES are invited to appear at this meeting,. or be represented by an agent, or to express their views in wrifing th C Clerk 1700 Convention Center Dnve,1 st Floor, C Hall, Miami Beach, Florida . addressed to the Crty Comi~assion, clo a ~Y dY . 33139. Copies of these ordinances are availaNe for public inspection during normal business hours in the City Clerk's Office, 1700 Convention Center Drive 1st Floor Ci Hall and Miami Beach, Florida 33139. This meetin maybe continued and under .. ~ g such circumstances ac~littonal legal nonce would riot be provided. Robert E. Parcher, -City Clerk City of Miami Beach Pursuant to Section 286.0105,1=1a. Stat.,.the City hereby advises,the public that: if a person decides to appea! any decision made by the Cityy Commission with respect to any matter considered at ns meeting or its hearing, such person must ensure that a verbatim record of the proceedings is made, whid~ .record includes the testimony arsi e~fidenc,~e upon which~the appeal is to be based. This notice does not constituae consent by the City for the introduction or admission of otherwise inadmissible or irrelevant evidence, nor does it authorize challenges or appeals not otherwise allowed by law. ~ ~ . ,. To request this material in aoressible format, sign language Interpreters, ~nformadon on access for persons with disabilities, and/or aannyy aooom- modation to review an document or artici ate ~n an c - sored p~bceedmg, please contact (305) 604-2469 (voice), (305~73.7216(TTY). five da's in advance to initiate r guest. TTY userys n ay a~iso call 711(Plorida Relay Service). y ~+ req . Ad #443 ...: - a ~ ~ ~ - ~ MB MiamiHeraf d.com/Neighbors I THE MIAMI HERALD I SUNDAY, SEPTEMBER 2, 2001