LTC 360-2023 Fiscal Year 2023 Third Quarter AnalysisMIAMI B E A CH
OFFICE OF THE CITY MANAGER
LTC NO.
TO:
FROM:
DATE:
360-2023
LETTER TO COM M ISSION
Honorable Mayor Dan Gelber and Members of the City Commission
Alina T. Hudak, City Manag~
August 9, 2023
SUBJECT: Fiscal Year 2023 Third Quarter Analysis
The purpose of this Letter to Commission (L TC) is to provide the Mayor and City Commission
with the status of the Fiscal Year (FY) 2023 operating budget as of the third quarter ending June
30, 2023 with projections through the fiscal year ending September 30, 2023.
This analysis is a preliminary projection based on experience during the first nine months of the
current fiscal year, which is not a definitive indication of the experience for the remainder of the
fiscal year. However, it does provide an initial glance in identifying any potential areas of concern
and/or opportunities. Certain assumptions for both revenues and expenditures have been made
in these projections that will continue to be refined and adjusted as additional information
becomes available.
SUMMARY
Based on the third quarter of the current fiscal year (FY 2023), revenue and expenditure
projections through September 30, 2023 for the General Fund reflect a year-end surplus of
approximately $20.1 million, which is an increase of $8.8 million over the $11.3 million surplus
projected as of the second quarter of the current fiscal year. The 2% Resort Tax Fund reflects a
projected year-end surplus of approximately $6.6 million, which is approximately $78,000 less
than the $6. 7 million surplus projected as of the second quarter of the current fiscal year.
During the current fiscal year, the FY 2023 Operating budget has been amended seven times to
appropriate funds from the FY 2023 projected surplus, as detailed in the table below. In addition,
the FY 2024-2028 Capital Improvement Plan (CIP), as summarized by the City Administration
during the FY 2024 budget development process, reflects approximately $1.1 billion in capital
project needs over the next five years. As a result, during the development of the FY 2024 Capital
Budget, the Administration recommended the transfer of approximately $5.0 million from the
projected FY 2023 General Fund year-end surplus and $5.8 million from the projected FY 2023
2% Resort Tax Fund surplus (through the General Fund) to the Pay-As-You-Go Capital Fund in
order to fund critical capital projects.
FY 2023 General Fund Resort Tax
Projected Surplus as of Q3
FY 2023 Mid-Year Appropriations Approved by Commission to Date
Additional Homeless Trust Set-aside
Projected FY 2023 Surplus Allocated for Projects in FY 2024 Capital Budget
Remaining Projected Surplus
$20,063,000 $6,590,000
(5,309,000) 0
(1,000,000) 0
(4,980,000) (5,808,000)
$8,774,000 $782,000
L e tt e r to C o m m is sio n - Fis c al Ye a r 2 0 2 3 Th ird Q u a r te r A n a ly s is
P a g e 2 o f 1 4
The City Administration is recommending that the remaining $8.8 million General Fund surplus
projected for FY 2023 be set aside to partially fund the General Fund required reserve levels and
targets, which will be updated based on the Adopted FY 2024 General Fund Budget. The
projected amount needed to fully fund this reserve is $11.1 million.
Similarly, it is recommended that the remaining projected FY 2023 year-end surplus in the 2%
Resort Tax Fund of $782,000 be set aside to partially fund the Resort Tax Fund required reserve
levels and targets, which will be updated based on the Adopted FY 2024 2% Resort Tax Fund
Budget. The projected amount needed to fully fund this reserve is $2.0 million.
RESERVES
The General Fund reserve as of September 30, 2022 is $95. 7 million, or 25.0%, which equals 3
months of reserves based on the FY 2023 adopted budget. The reserve policy for the General
Fund is a required 2 months and a goal of 3 months pursuant to Resolution No. 2019-30954 that
was adopted by the City Commission on September 11, 2019.
The Resort Tax reserve as of September 30, 2022 is $37.8 million, or 50.0%, which equals 6
months of reserves based on the FY 2023 adopted budget. The reserve policy for the 2% Resort
Tax Fund is a minimum of 2 months and a goal of 6 months pursuant to Resolution No. 2019-
30664 that was adopted by the City Commission on January 16, 2019.
Additional funding requirements for these reserves will continue to be evaluated as part of the
year-end process for FY 2023 and finalization of the FY 2024 budget development process.
ANALYSIS
All General Fund, Enterprise Funds, Internal Services Funds, and Special Revenue Funds
budgets are projected to be at or below their current amended budgets as of year-end with
revenues projected to be equivalent to or in excess of expenditures, except for specific General
Fund departments, the Sanitation and Convention Center Enterprise Funds, the Risk
Managem ent Internal Servi ce Fund, and the 5 & Alton and Biscayn e Point Special Taxing District
Special Revenue Funds that will be detailed further in the forthcoming third quarter analysis.
GENERAL FUND
Third Quarter Status
An analysis of the actual nine-month operating revenues and expenses for the period October 1,
2022 through June 30, 2023 reflects an operating budget surplus of approximately $90.9 million.
While the actual surplus as of June 30, 2023 may seem unusual when compared to the projection
for the current fiscal year ending September 30, 2023, it should be noted that the City receives a
large percentage of its annual ad valorem property tax revenues during the early months of the
fiscal year. Ad valorem property tax revenues represent approximately 59.3% of total budgeted
revenues adopted for FY 2023 and 64.0% of actual revenues that have been collected during the
first nine months of the current fiscal year.
As of June 30, 2023, total revenues collected in the General Fund were 88.1 % of the current FY
2023 amended budget, or $353.4 million. Conversely, expenditures were 65.4% of the current FY
2023 amended budget, or $262.5 million since there are often delays in expenditures until the
close of the fiscal year.
Letter to C om m issio n -- Fiscal Year 2023 Third Q uarter A nalysis
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FY 2023 Budget
3/4 of Amended Actuals as of Variance from 3/4
General Fund Adopted Budget Amended Budget Budget 06/30/23 Amended Budget
Over / (Under)
Revenues $ 382,618,000 $ 401,246,000 $ 300,934,500 $ 353,477,332 $ 52,542,832
Expenditures $ 382,618,000 $ 401,246,000 $ 300,934,500 $ 262,537,794 $ (38,396,706)
Excess of Revenues Over/(Under) Expenditures $ 90,939,538
Year-End Projections
Year-end operating revenues and expenditures projected through September 30, 2023 provide a
more realistic indication of any estimated year-end surpluses or shortfalls as of this point in time.
While actual revenues and expenses reflected in this analysis are as of June 30, 2023, these
projections also incorporate more current information available.
A summary of the preliminary General Fund revenues and expenditures as of June 30, 2023 with
projections through September 30, 2023 reflects a projected year-end surplus of approximately
$20.1 million, which the City Administration recommends be set aside for capital funding needs
and required reserve levels and reserve targets.
FY 2023 Budget
General Fund Adopted Budget Amended Budget Projected Difference % Over / (Under)
Revenues $ 382,618,000 $ 401,246,000 $ 414,429,000 $ 13,183,000 3.3%
Expenditures $ 382,618,000 $ 401,246,000 $ 394,366,000 $ (6,880,000) -1.7%
Excess of Revenues Over/(Under) Expenditures $ 20,063,000 5.0%
Operating Revenues
As of June 30, 2023, actual operating revenues collected were approximately 88.1 % of the current
amended budget, or $353.4 million, with operating revenues through fiscal year-end September
30, 2023 projected at $414.4 million, which is approximately 3.3%, or $13.2 million, above the
current amended budget. As previously mentioned, these projections are not only based on
experience during the first nine months of the fiscal year, but also other more current information
available.
Property tax collections for FY 2023 are being projected at 95.0% of total property taxes assessed,
which is consistent with the original adopted budget and allows for discounts and a level of
adjustment for appeals that is consistent with historical levels. The impact of these appeals and
adjustments realized for the FY 2023 budget were received in July 2023 when the City received
its certified property values from the Miami Dade County Property Appraiser for the upcoming
fiscal year.
General Fund revenues by category projected to exceed budget or with significant variances to
budget in excess of 10.0%, or $300,000, are further explained below:
Other Taxes - This category includes franchise taxes from gas and electric, as well as utility
taxes from telephone, electricity, and gas and is projected to be above the current amended
budget by 6.6%, or $1.7 million, primarily due to franchise and utility taxes from electricity,
gas, and telecommunications trending higher than originally anticipated based on current
economic activity.
Letter to C om m issio n --- F iscal Year 2 023 Third Q u a rter A n a lysis
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Licenses and Permits - This category includes business tax receipts, licenses/special use
permits, and outdoor dining concession program revenues and is projected to be above the
current amended budget by 18.2%, or $3.4 million, primarily due to increased revenues from
the approved outdoor dining concession program that was implemented during FY 2023, as
well as fire, planning, and public works plans review services and permits that continue to
trend higher than anticipated from ongoing real estate and economic development activity.
Charges for Services - This category includes revenues from the operations of the Miami
Beach and Normandy Shores golf courses and Flamingo Park Tennis Center, activities and
programs offered by the Parks and Recreation Department such as after school and summer
classes, and public safety, passport, ambulance/rescue, and lot clearing services, and is
projected to be above the current amended budget by 12.9%, or $2.0 million, primarily due
to the operations of both the Miami Beach and Normandy Shores golf courses, as well as the
Flamingo Park Tennis Center, that continue to trend higher than originally anticipated based
on current economic and tourism-related activity.
Fines and Forfeits - This category, among other things, includes Fire violations and false
alarm fees, Code Compliance fines and violations, and Public W orks elevator violations, is
projected to be above the current amended budget by 53.1 %, or $671,000, primarily due to
code enforcement fines and violations, false alarm fees and violations, and elevator violations
trending higher than budget and prior years.
Interest - This category is comprised of various sources of interest income derived from the
City's current investments and is projected to be 14.4%, or $805,000, above the current
amended budget due to higher than anticipated interest rates.
Rents and Leases - Th is category includes revenues from various rentals and leases of
City owned properties. FY 2023 revenues are projected to be 7.9%, or $559,000, above the
current amended budget primarily due to revenues from several of the City's leases trending
higher than budgeted since revenues that are collected by the City from some of its leases
and rentals are based on a percentage of tenants' sales.
Miscellaneous - This category includes revenues from various categories such as
reimbursements from the Federal Emergency Management Agency (FEMA) and the State
of Florida for emergency aid/services that were provided by the City, chargebacks to capital
projects for Capital Improvement Project (CIP) department operations, the sale of City
property, various concessions, and other miscellaneous revenues that include beach access
fees and advertising. FY 2023 revenues are projected to be 26.4%, or $4.2 million, above
the current amended budget primarily due to reimbursements in excess of approximately
$3.1 million received by the City from FEMA and/or the State of Florida for various hurricanes,
including Hurricane Ian that struck the western coast of Florida last year, as well as a
$875,000 public benefit payment related to the vacation of up to 5,500 square feet of Alton
Court between Lincoln Road and 17 Street pursuant to the vacation agreem ent adopted by
the City Commission through Resolution No. 2022-32250.
For a detail of General Fund revenues by category, refer to the attached Exhibit A.
Operating Expenditures
As of June 30, 2023, actual expenses were 65.4%, or $262.5 million, of the current amended
budget with operating expenditures through fiscal year-end September 30, 2023 projected at
$394.4 million, which is approximately 1. 7%, or $6.9 million, below the current amended budget.
Letter to C om m ission - Fiscal Year 2023 Third Q uarter A nalysis
P age 5 of 14
As previously mentioned, these projections are based on an analysis of the first nine months of
the fiscal year, as well as more current information available.
General Fund expenditures by department projected to exceed budget or with significant
variances to budget in excess of 10.0%, or $300,000, are further explained below:
City Attorney - The department is projected to be below the current amended budget by
7.4%, or $564,000, primarily due to projected savings in personnel services expenditures,
resulting from vacant positions in the current fiscal year that the City Attorney's Office is in the
process of trying to fill with qualified candidates based on current needs.
City Attorney
FY 2023 FY 2023 Projected vs
Amended Budget Projected Amended % Over/ (Under)
Budget Variance
Expenditures $ 7,654,000 $ 7,090,000 $ (564,000) -7.4%
Parks & Recreation - The department is projected to be 4.3%, or $1.9 million, below the
current amended budget primarily due to projected savings in personnel services
expenditures resulting from numerous budgeted full-time and part-time positions that have
been and/or remain vacant in the current fiscal year due to challenges in the recruitment of
qualified candidates based on current departmental operating needs.
Parks & Recreation
FY 2023 FY 2023 Projected vs
Amended Budget Projected Amended % Over / (Under)
Budget Variance
Expenditures $ 44,067,000 $ 42,167,000 $ (1,900,000) -4.3%
Public Works - The department is projected to be below the current amended budget by
9.1 %, or $1.6 million, resulting from savings anticipated in grounds maintenance services, as
well as personnel services expenditures due to numerous vacancies for budgeted full-time
positions within the department's Engineering, Streets and Street Lighting, and Greenspace
Management divisions due to challenges in the recruitment of qualified candidates based on
current departmental operating needs.
Public Works
FY 2023 FY 2023 Projected vs
Amended Budget Projected Amended % Over/ (Under)
Budget Variance
Expenditures $ 17,021,000 $ 15,464,000 $ (1,557,000) -9.1%
Fire - The department is projected to be above the current amended budget by 3.3%, or $3.3
million, resulting from additional personnel services expenditures associated with the
collective bargaining agreements that were finalized by the City Commission during FY 2023.
It is important to note that while the department is projected to exceed its current amended
budget, funding totaling approximately $5. 7 million was budgeted in a centralized account
within the Citywide Accounts budget to offset the projected impact of the collective bargaining
agreements since approval of all the agreements was pending at the time that the FY 2023
budgets were adopted by the City Commission. Should these projections be realized, a budget
amendment will be recommended at year-end to realign funding accordingly.
Letter to C om m issio n - Fiscal Year 2023 Third Q uarter A nalysis
P age 6 of 14
Fire
FY 2023 FY 2023 Projected vs
Amended Budget Projected Amended % Over I (Under)
Budget Variance
Expenditures $ 102,036,000 $ 105,381,000 $ 3,345,000 3.3%
Citywide Accounts - Citywide Accounts are a category of budgeted expenditures related to
the City's overall operations that are not readily identifiable to any specific department. This
category of accounts is projected to be 9.7%, or $2.7 million, below the current amended
budget, primarily due to the amount that was allocated for the collective bargaining
agreements in the FY 2023 operating budget. As a result of all the collective bargaining
agreements being ratified during FY 2023, the projected expenditures associated with the
collective bargaining agreements are being accounted for in the appropriate General Fund
departments' projections.
Citywide Accounts
F Y 2 0 2 3 F Y 20 2 3 P roje cte d vs
A m e n d e d B u d g e t P roje cte d A m e n d e d % O ve r I (U n d e r)
B u d g e t V a ria n ce
E xp e n d itu re s $ 2 7,4 17,0 0 0 $ 24,750,000 $ (2,667,000) -9.7%
While the above-listed General Fund departments comprise those projected to exceed their
current amended budgets or with variances to budget in excess of 10.0%, or $300,000, all other
General Fund departments are projected to have savings at year-end that may be realigned within
the General Fund to address any department overages projected above, should these projections
be realized at year-end.
For a detail of General Fund expenditures by department, refer to the attached Exhibit A.
ENTERPRISE FUNDS
The City accounts for those goods and services provided by a particular department to external
users for which a fee is charged as Enterprise Funds. The City's Sanitation, Water, Storm Water,
Sewer, Parking, Convention Center, and Building operations comprise this category of Proprietary
Funds.
An analysis of the actual first nine months of operating expenses for the period October 1, 2022
through June 30, 2023 reveals that all Enterprise Funds have actual expenses that are less than
three quarters of their current FY 2023 amended budgets, which is not representative of typical
trends for a full fiscal year as there is often a lag in processing of expenditures, particularly those
billed by outside entities for services provided.
ENTERPRISE FUNDS
Sanitation Sewer Storm Water Water Parking Building Convention
' Center
FY 2023 Adopted Budget 23,860,000 57,396,000 34,103,000 36,577,000 46,617,000 17,993,000 29,407,000
FY 2023 Amended Budqet 24,821,000 59,180,000 36,030,000 39,932,000 47,458,000 18,090,000 29,607,000
3/4 Adopted Budget 17,895,000 43,047,000 25,577,250 27,432,750 34,962,750 13,494,750 22,055,250
3/4 Amended Budget 18,615,750 44,385,000 27,022,500 29,949,000 35,593,500 13,567,500 22,205,250
Revenues as of 06/30/23 18,866,013 46,565,006 26,608,605 30,751,354 39,387,673 14,849,027 9,270,217
Expenditures as of06/30/23 17,899,881 39,498,451 18,644,667 25,832,217 26,025,207 11,902,303 12,581,123
Expenditures Above/(Below) 3/4 Amended Budget (715,869) (4,886,549) (8,377,833) (4,116,783) (9,568,293) (1,665,197) (9,624,127)
% Variance -2.9% -8.3% -23.3% -10.3% -20.2% -9.2% -32.5%
Letter to C om m ission -- Fiscal Year 2023 Third Q uarter A nalysis
P age 7 of 14
Year-end operating revenue and expenditure projections through September 30, 2023 provide a
more realistic indication of any anticipated year-end surpluses or shortfalls as of this point in time.
While the actual revenues and expenses presented above are as of June 30, 2023, the year-end
projections also incorporate more current information available.
Revenues for all Enterprise Funds are projected to be equivalent to or in excess of expenditures
as of year-end and all Enterprise Fund budgets are projected to be under budget, except for the
Sanitation and Convention Center Enterprise Funds. For these two funds, both revenues and
expenditures are projected to be above their current amended budgets, as further detailed below.
ENTERPRISE FUNDS
l Sanitation Sewer Storm Water Water Parking Building
Convention
Center
FY 2023 Adopted Budget 23,860,000 57,396,000 34,103,000 36,577,000 46,617,000 17,993,000 29,407,000
FY 2023 Amended Budget 24,821,000 59,180,000 36,030,000 39,932,000 47,458,000 18,090,000 29,607,000
FY 2023 Projections:
Charges for Services 23,186,000 60,551,000 35,152,000 39,230,000 49,031,000 18,697,000 23,360,000
Other 2,441,000 2,387,000 1,619,000 2,915,000 2,998,000 434,000 24,577,000
FY 2023 Revenue Projections 25,627,000 62,938,000 36,771,000 42,145,000 52,029,000 19,131,000 47,937,000
$ Overt(Under) Ame nded Budget 806,000 3,758,000 741,000 2,213,000 4,571,000 1,041,000 18,330,000
% Overt/Under\ Amended Budaet 3.2% 6.4% 2.1% 5.5% 9.6% 5.8% 61.9%
FY 2023 Expenditure Projections 25,095,000 59,058,000 35,811,000 39,637,000 45,306,000 17,071,000 31,680,000
$ Over/(Und er) Ame nded Budget 274,000 (122,000) (219,000) (295,000) (2,152,000) (1,019,000) 2,073,000
% Over/(Under) Amended Budaet 1.1% -0.2% -0.6% -0.7% -4.5% -5.6% 7.0%
Revenues Overt(Under) Expenditures 532,000 3,880,000 960,000 2,508,000 6,723,000 2,060,000 16,257,000
Sanitation - The Sanitation Fund budget is projected to be 1.1 %, or $274,000, above the
current amended budget primarily due to increased personnel costs resulting from additional
late night cleaning services that are being provided in the Art Deco Cultural District (ADCD)
and a significant increase in the number of special events taking place compared to previous
years. Although expenditures are projected to exceed the current amended budget, additional
revenues are projected to offset the projected overage in expenditures, should these
projections be realized at year-end.
Convention Center - The Convention Center Fund budget is projected to be above the
current amended budget by approximately $2.1 million, or 7.0%, primarily due to an increase
in the number of events from 44 that were originally anticipated for FY 2023 when the budget
was developed to 67 currently projected for the current fiscal year. Although expenditures are
projected to exceed the current amended budget due to the increase in the number of events,
revenues are also projected to exceed the current amended budget resulting in a projected
surplus of approximately $16.3 million that would be available to be set aside for renewal and
replacement of Convention Center assets and/or future operating and other expenditure
obligations, if realized at year-end. Note, while a portion of the projected surplus is directly
attributed to the increase in revenues from the additional events currently projected for the
current fiscal year, a significant portion is attributed to a Convention Development Tax (CDT)
bonus of $14.8 million that is anticipated to be received by the City for FY 2023 from a portion
of the Convention Development Tax receipts collected by Miami-Dade County in accordance
with the Amended lnterlocal Cooperation Agreement that was adopted by the City
Commission, through Resolution No. 2014-28836. Due to changes in the scheduling of
events, the surplus projected as of the third quarter may vary as of year-end; therefore, the
Convention Center Fund's operations will continue to be monitored over the coming months.
These projections will continue to be refined further as additional information becomes available.
Letter to C om m issio n -- Fiscal Year 2023 Third Q uarter A nalysis
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INTERNAL SERVICE FUNDS
The City accounts for goods and services provided by one department to other departments
citywide on a cost reimbursement basis as Internal Service Funds. Central Services, Fleet
Management, Information Technology, Property Management, Risk Management (Self
Insurance), Medical and Dental, and the Office of the Inspector General comprise this category
of Proprietary Funds.
An analysis of the actual first nine months of operating revenues and expenses for the period
October 1, 2022 through June 30, 2023 reveals that all Internal Service Funds have actual
expenses that are less than three quarters of their current FY 2023 amended budgets. Similar to
the Enterprise Funds, this is not representative of typical trends for a full fiscal year as there is
often a lag in processing of expenditures, particularly those billed by outside entities for services
provided.
INTERNAL SERVICE FUNDS
Central Fleet Informa tion Inspector Property Risk
Medical &
Dental
Services Management Technology General Manageme nt Manageme nt Insurance
FY 2023 Adopted Budaet 1,044,000 17,761,000 19,821,000 1,726,000 12,072,000 23,846,000 46,159,000
FY 2023 Amended Budaet 1,064,000 24,928,000 20,694,000 2,180,000 12,849,000 26,162,000 46,159,000
3/4 Adopted Budget 783,000 13,320,750 14,865,750 1,294,500 9,054,000 17,884,500 34,619,250
3/4 Amended Budaet 798,000 18,696,000 15,520,500 1,635,000 9,636,750 19,621,500 34,619,250
Revenues as of 06/30/23 805,549 9,126,381 14,156,149 1,300,906 8,950,366 20,106,569 32,289,078
Expenditures as of 06/30/23 669,339 8,794,124 13,663,803 1,206,425 7,793,578 18,353,959 30,878,442
Expenditures Above/(Below) 3/4 Amended Budget (128,661) (9,901,876) {1,856,697) (428,575) (1,843, 172) (1,267,541) (3,740,808)
% Variance -12.1% -39.7% -9.0% -19.7% -14.3% -4.8% -8.1%
Year-end operating revenue and expenditure projections through September 30, 2023 provide a
more realistic indication of any anticipated year-end surpluses or shortfalls as of this point in time.
While the actual revenues and expenses presented above are as of June 30, 2023, the year-end
projections also incorporate more current information available.
Revenues for all Internal Service Funds are projected to be equivalent to expenditures as of year-
end. In addition, all Internal Service Fund expenditures are projected to be under budget, except
for the Risk Management Fund that is further detailed below.
INTERNAL SERVICE FUNDS
Central Fleet Informa tion Inspector Property Risk
Medical &
Dental
Services Management Technology General Manageme nt Manageme nt Insurance
FY 2023 Adopted Budget 1,044,000 17,761,000 19,821,000 1,726,000 12,072,000 23,846,000 46,159,000
FY 2023 Amended Budget 1,064,000 24,928,000 20,694,000 2,180,000 12,849,000 26,162,000 46,159,000
FY 2023 Projections:
Charges for Services 1,008,000 16,730,000 18,565,000 1,724,000 11,794,000 22,721,000 0
Other 40,000 7,913,000 1,834,000 433,000 826,000 5,792,000 45,410,000
FY 2023 Revenue Projections 1,048,000 24,643,000 20,399,000 2,157,000 12,620,000 28,513,000 45,410,000
$ Over/(Under) Ame nded Budget (16,000) (285,000) (295,000) (23,000) (229,000) 2,351,000 (749,000)
% Over/(Under) Amended Budget -1.5% -1.1% -1.4% -1.1% -1.8% 9.0% -1.6%
FY 2023 Expenditure Projections 1,048,000 24,643,000 20,399,000 2,157,000 12,620,000 28,513,000 45,410,000
$ Over/(Under) Ame nded Budget (16,000) (285,000) (295,000) (23,000) (229,000) 2,351,000 (749,000)
% Over/I Under) Amended Budaet -1.5% -1.1% -1.4% -1.1% -1.8% 9.0% -1.6%
Revenues Over/(Under) Exp enditures 0 0 0 0 0 0 0
Risk Management - The City's actuary has advised that the Risk Management Fund is
projected to be 9.0%, or $2.4 million, above the current amended budget primarily due to
Letter to Commission - Fiscal Year 2023 Third Quarter Analysis
Page 9 of 14
unforeseen increases in claims incurred but not reported (IBNR) and case reserves that are
trending higher than originally budgeted for the current year based on the most recent
actuarial forecasts. This material change in the City's tort liability exposure in the current year
m ay be largely due to the impacts of HB 837, the comprehensive Tort Reform bill that
G overn or D es antis signed into law and w hich took effect on M arch 24, 2023. Specifically, just
befo re the law w ent into effect, the City experienced a w ave of appro xim ately 30 new tort
cases filed against the City on M arch 21, 2023, M arch 22, 2023, and M arch 23, 2023,
including, w ithout lim itation, a w ro ngful death action. T his extraordinary, one-tim e surge in
case filings w as consistent w ith the statew ide increase in tort case filings by plaintiffs seeking
to avoid the application of the new law befo re it w ent into effect. S ince claim s can fluctuate,
these trends will continue to be monitored over the coming months and the projections for the
current year will be refined accordingly. If the trend continues at the current level for the
remainder of the fiscal year, any overage realized at year-end will be addressed with the use
of prior year fund balance in the Risk Management Fund that includes in excess of $40.0
m illion pro jected to be set aside fo r claim s IB N R and case reserves in accordance w ith City's
self-insurance obligations arising under G A S B standards and Florida law. In the long-term,
the City anticipates that it will benefit from the prospective limitations set forth in the new Tort
R efo rm bill, and that the new law w ill reduce the City's tort liability exposure over time.
T hese projections w ill continue to be refined as additional info rm ation becom es available.
SPECIAL REVENUE FUNDS
S pecial R evenue Funds consist of revenues and expenditures w hich are legally restricted or
com m itted fo r specific purposes, other than debt service and/or capital pro jects. S pecial R evenue
Funds include R esort Tax, as w ell as T ransportation and People's Transport ation P lan (P T P )
Fund opera tion s, 7 S tre et G ara ge oper at ion s, 5" & Al ton G ara ge ope ration s, th e T ourism and
Hospitality S cholarship P ro gram , Info rm ation and Com m unications T echnology Fund, Education
C om pact Fund, Franchise W aste Haulers and Sustainability C ontributions, the R esidential
Housing P rogram , R ed Li ght C am era P ro gram operations, Em ergen cy 911 Fund, M iam i Beach
C ultural A rt s Council, N orm andy Shores and the C ity's three S ecurity G uard S pecial Taxing
D istricts (B iscayne Point, Biscayne Beach, and A llison Island), Miami City Ballet, Art in Public
P laces (A iP P ) operations, T ree Preservation and C om m em orative T ree Trust Fund, Beachfr ont
Concession Initiatives P rogram , Beach Renourishm ent, Resiliency, S ustainability and R esiliency,
and Biscayne Bay Protection T rust Funds, P olice U nclaim ed P ro pert y and C rash R eport S ales
Funds, Police Confiscation T rust Funds (Federal and State), Police Training and School
Resources Fund, and the A dopt-a-B ench and Brick P aver Pro gram s.
A n analysis of the actual first nine m onths of operating revenues and expenses fo r the period
O ctober 1, 2022 through June 30, 2023 reveals that all S pecial R evenue Funds have actual
expenses that are less than three quart ers of their current FY 2023 am ended budgets w hich is
not typically representative of trends fo r a full fiscal year since there are expenditures that are
typ i cal ly incur re d in th e latter part of th e fiscal year, except for th e 5 & Al ton G arage Fund th at
has incurred additional costs fr om operations during the first nine m onths of the fiscal year.
Y ear-end operating revenue and expenditure pro jections thro ugh S eptem ber 30, 2023 pro vide a
m ore realistic indication of any anticipated year-end surpluses or shortfalls as of this point in tim e.
W hile the actual revenues and expenses presented above are as of June 30, 2023, the year-end
pro jections also incorporate m ore current info rm ation available.
R evenues fo r all S pecial R evenue Funds are projected to be equivalent to or in excess of
expenditures as of year-end. In addition, all S pecial R evenue Funds are pro jected to be below
Letter to Commission -- Fiscal Year 2023 Third Quarter Analysis
Page 10 of 14
their current amended budgets, except for the 5" & Alton Garage Fund and Biscayne Point
Special Taxing District that are further detailed below.
5 & Alton Garage Fund - This fund is projected to be 7.5%, or $63,000, above its current
amended budget. This is primarily attributed to an increase in the level of operations taking
place at this garage from what was originally anticipated for the current fiscal year. Although
this fund is projected to exceed the current amended budget, the additional expenditures are
projected to be offset by additional revenues projected from operations, available fund
balance, and a contribution from the Parking Enterprise Fund, if necessary, should these
pro jections be realized at year-end.
5th & Alton Garage
FY 2023 FY 2023 Projected vs
Amended Budget Projected Amended % Over/ (Under)
Budget Variance
Revenues $ 844,000 $ 907,000 $ 63,000 7.5%
Expenditures $ 844,000 $ 907,000 $ 63,000 7.5%
Surplus/(Shortfall) $ 0 $ 0 $ 0
Biscayne Point Special Taxing District - The Biscayne Point Special Taxing District is
projected to be 4.3%, or $10,000, above the current amended budget primarily due to
unforeseen costs incurred for repairs that were performed and improvements that were
completed in the security guardhouse during the current fiscal year, as well as increases in
the rates for contracted security guard services. Although this District is projected to exceed
its current amended budget, additional expenditures are projected to be offset using a
com bination of available fund balance and an increase in the assessment levied annually for
the operation of this District should these projections be realized at year-end.
Biscayne Point Special Taxing District
FY 2023 FY 2023 Projected vs
Amended Budget Projected Amended % Over/ (Under)
Budget Variance
Revenues $ 230,000 $ 240,000 $ 10,000 4.3%
Expenditures $ 230,000 $ 240,000 $ 10,000 4.3%
Surplus/(Shortfall) $ 0 $ 0 $ 0
R E S O R T T A X F U N D
T he C ity's R esort T ax Fund is prim arily supported by taxes collected pursuant to Chapter 67-930
(S ection 6) of the Law s of Florida, as am ended, and S ection 5.03 of the City of M iam i Beach
C hart er, as am ended. T his legislation authorizes the use of Resort Taxes fo r the prom otion of the
tourism industry , w hich includes, but is not restricted to the fo llow ing: P ublicity, advert ising, new s
bureau, prom otional events, convention bureau activities, capital im pro vem ents and the
m aintenance of all physical assets in connection therew ith; and for the payment of the reasonable
and necessary expenses of collecting, handling, and processing of said tax.
T ypically, the City has considered the fo llow ing services as "S erv ices Related to the Promotion of
T ourism :"
• Police O fficers serving entert ainm ent areas
• A port ion of Fire R escue services fr om Fire Stations 1 & 2
• O cean R escue services
Letter to Com m issio n -- Fiscal Year 2023 Third Q uart er A nalysis
P age 11 of 14
• Sidewalk pressure cleaning in South, Middle and North Beach visitor areas
• South Beach sanitation
• Enhanced Code Compliance/Enforcement provided to respond to evening entertainment
area violations and staffing of special events
• Other Code Compliance/Enforcement activities in tourism and visitor related
facilities/areas
• Tourism and Cultural Development Department and the Cultural Arts Council
• Museums and Theatres (Garden Center, Bass Museum, Colony and Byron Carlyle
Theatres)
• Golf courses (net of revenues)
• Memorial Day and other special event costs
• Homeless services
• July 4", Visitor Center funding, Holiday Lights, MDPL, Orange Bowl, etc.
These allowable uses have led to increased tourism-related activities, such as special events
including Art Basel and the Air and Sea Show.
2% Resort Tax
Based on the first nine months of actual collections, total two percent Resort Tax revenues for FY
2023 are projected to be 8.9%, or approximately $6.8 million, above the current amended budget
as of year-end, with the remaining months in the current fiscal year conservatively projected at
approximately 93.0% of FY 2022 collections based on current year trends.
The total two percent Resort Tax expenditures are projected to be 0.3%, or $194,000, above the
current amended budget as of year-end due to a $736,000 increase in the combined contributions
to the Miami Beach Visitor and Convention Authority (VCA) and Greater Miami Convention &
Visitors Bureau (GMCVB) that are based on a percentage of two percent Resort Tax collections
and projected to be above budget. This is, however, partially offset by a combined savings
projected of $542,000 in high impact periods expenditures for Police, as well as personnel-related
savings from several vacancies that specific departments funded by the Resort Tax Fund are in
the process of trying to fill and other miscellaneous operating expenditures.
1% Resort Tax (Quality of Life)
The proceeds of the one percent bed tax, as adopted through Resolution No. 2018-30512, and
continuing in FY 2023, unless amended by the City Commission, are to be utilized as follows:
60% allocated for Transportation initiatives in tourist-related areas; 10% allocated equally among
North Beach, Middle Beach and South Beach for capital projects that enhance Miami Beach's
tourist related areas; and 10% allocated to various arts and cultural programs.
One percent bed tax revenues are projected to be 8.3%, or $1.4 million, above the current
amended budget as of year-end. Since transfers for Transportation initiatives in tourism-related
areas, North, Middle, and South Beach quality of life projects, and the Cultural Arts Council (CAC)
for various arts and cultural programs are based on the one percent bed tax revenue collections,
expenditures are equally projected to be 8.3%, or $1.4 million, above the current amended budget
as of year-end, of which approximately $862,000 is allocated to Transportation initiatives in
tourism-related areas, $432,000 is allocated to North, Middle, and South Beach quality of life
projects equally, and $144,000 is allocated to the CAC for various arts and cultural programs.
Letter to Com m ission -- Fiscal Year 2023 Third Q uarter A nalysis
P age 12 of 14
1% Resort Tax (Convention Center)
The proceeds of the additional one percent bed tax levied solely for the purposes of expanding,
enlarging, renovating, and/or improving the Miami Beach Convention Center, including debt
service related thereto, as well as providing Capital Renewal and Replacement funding for the
Miami Beach Convention Center, are similarly projected to be 8.3%, or $1.4 million, above the
current amended budget as of year-end. Since the proceeds of the additional one percent bed
tax must first provide for the payment of debt service and any excess, based on proceeds, be set
aside for Capital Renewal and Replacement funding for the Miami Beach Convention Center,
additional one percent bed tax expenditures are also projected to be 8.3%, or $1.4 million, above
the current amended budget as of year-end.
Total Resort Tax
Overall, due to actual Resort Tax collections exceeding budget for the nine months of the fiscal
year and collections for the remaining months of the current fiscal year conservatively projected
at approximately 93.0% of FY 2022 collections based on trends, combined Resort Tax revenues
are projected to be 8. 7%, or $9. 7 million, above the current amended budget as of year-end while
expenditures are projected to be 2.8%, or $3.1 million, above the current amended budget as of
year-end resulting in a projected surplus of approximately $6.6 million, which the City
Administration recommends be set aside to fund additional tourism-eligible expenditures in the
General Fund and required reserve levels and reserve targets.
FY 2023 FY 2023 % Actual of Over/(Under) %
Actuals as of Over/(Under) Adopted Amended 06/30/23 Amended Amended Amended Budget Budget Budget Budget Budget
Revenues
2% Resort Tax 71,499,000 71,499,000 58,173,993 81.4% 76,614,000 5,115,000 7.2%
Miscellaneous Revenues 251,000 251,000 1,298,345 517.3% 1,920,000 1,669,000 664.9%
Fund Balance/Retained Earnings/PY Surplus 3,955,000 4,819,000 0 0.0% 4,819,000 0 0.0%
1% Resort Tax (QOL) 17,372,000 17,372,000 14,177,767 81.6% 18,810,000 1,438,000 8.3%
Additional 1% Resort Tax for Convention Center 17,372,000 17,372,000 14,177,767 81.6% 18,810,000 1,438,000 8.3%
Total Revenues 110,449,000 111,313,000 87,827,872 78.9% 120,973,000 9,660,000 8.7%
Expenditures
General Fund Contribution 39,227,000 39,227,000 29,420,250 75.0% 39,227,000 0 0.0%
Sanitation Fund Contribution 3,969,000 3,969,000 2,976,750 75.0% 3,969,000 0 0.0%
Contribution to GMCVB 8,864,000 8,864,000 5,295,152 59.7% 9,355,000 491,000 5.5%
Contribution to VGA 3,433,000 3,433,000 2,441,788 71.1% 3,678,000 245,000 7.1%
Contribution to Mt. Sinai 1,000,000 1,000,000 0 0.0% 1,000,000 0 0.0%
Other Operating/Other Uses 19,002,000 19,740,700 12,926,939 65.5% 19,278,000 (462,700) -2.3%
Marketing 210,000 335,300 70,892 21.1% 256,000 (79,300) -23.7%
Transfer to NB, MB, SB Capital, Transp, and Arts (QOL) 17,372,000 17,372,000 14,177,767 81.6% 18,810,000 1,438,000 8.3%
Addt'l 1% Conv. Center Debt Service & Ca, Ren & Re I. 17,372,000 17,372,000 0 0.0% 18,810,000 1,438,000 8.3%
Total Ex enditures 110,449,000 111,313,000 67,309,538 60.5% 114,383,000 3,070,000 2.8%
Excess of Revenues Over/ Under Ex enditures 0 0 20,518,334 6,590,000 6,590,000
Letter to Com m ission -- Fiscal Year 2023 Third Q uarter Analysis
Page 13 of 14
CONCLUSION
A ll G eneral Fund, Enterprise Funds, Internal Service Funds, and Special Revenue Funds budgets
are pro jected to be at or below their current amended budgets as of year-end with revenues
projected to be equivalent to or in excess of expenditures, except for specific General Fund
departments, the Sanitation and Convention Center Enterprise Funds, the Risk Management
Internal Service Fund, and the 5 & Alton Garage and Biscayne Point Special Taxing District
Special Revenue Funds that were detailed in the analysis above.
The current year budgets will continue to be proactively monitored between now and the
development of the year-end projections, as well as during the finalization of the FY 2024 budgets,
and any material variances will be disclosed and discussed at upcoming Finance and Economic
Resiliency Committee (FERC) and/or City Commission meetings.
ATH/JG/TOS
Letter to Commission -- Fiscal Year 2023 Third Quarter Analysis
Page 14 of 14
EXHIBIT A
FY 2023 FY 2023 % Actual of Over/(Under) %
Actuals as of Over/(Under) Adopted Amondod
06/30/23
Amended Amended Amended Budgot Budget Budgot Budget Budgot
REVENUES
Ad Valorem Taxes 220,605,000 220,605,000 219,890,647 99.7% 220,605,000 0 0.0%
Ad Valorem Taxes - Pay-As-You-Go Capital 3,974,000 3,974,000 3,974,000 100.0% 3,974,000 0 0.0%
Ad Valorem Taxes - Capital Renewal & Replacement 1,944,000 1,944,000 1,944,000 100.0% 1,944,000 0 0.0%
Ad Valorem Taxes - Normandy Shores 282,000 282,000 282,000 100.0% 282,000 0 0.0%
Other Taxes 25,010,000 26,660,000 18,696,017 70.1% 28,409,000 1,749,000 6.6%
Licenses and Permits 18,040,000 18,843,000 18,703,165 99.3% 22,279,000 3,436,000 18.2%
Intergovernmental 14,175,000 14,225,000 9,363,987 65.8% 14,019,000 (206,000) -1.4%
Charges for Services 14,489,000 15,681,000 14,694,548 93.7% 17,697,000 2,016,000 12.9%
Fines and Forfeitures 1,264,000 1,264,000 1,551,067 122.7% 1,935,000 671,000 53.1%
Interest 5,577,000 5,577,000 6,291,946 112.8% 6,382,000 805,000 14.4%
Rents and Leases 6,967,000 7,067,000 5,794,820 1.0% 7,626,000 559,000 7.9%
Mscellaneous 15,566,000 15,753,000 12,848,634 81.6% 19,906,000 4,153,000 26.4%
Other-Resort Tax Contribution 39,227,000 39,227,000 29,420,250 75.0% 39,227,000 0 0.0%
Other-Non-Operating Revenues 13,905,000 13,905,000 10,022,250 72.1% 13,905,000 0 0.0%
Fund Balance/Retained Earnin s/PY Sur lus 1,593,000 16,239,000 0 0.0% 16,239,000 0 0.0%
TOTAL REVENUES 382,618,000 40 1,246,000 363,477,332 88.1% 414,429,00 0 13,183,00 0 3.3%
EXPENDITURES
Mayor & Commission 2,809,000 2,809,000 1,961,304 69.8% 2,743,000 (66,000) -2.3%
City Manager 4,290,000 4,290,000 2,856,988 66.6% 4,108,000 (182,000) -4.2%
Mar keting and Communications 2,913,000 2,983,000 1,875,442 62.9% 2,973,000 (10,000) -0.3%
Office of Management and Budget 1,678,000 1,678,000 1,044,229 62.2% 1,488,000 (190,000) -11.3%
Org. Dev Performance Initiatives 1,944,000 3,356,000 1,103,369 32.9% 3,265,000 (91,000) -2.7%
Finance 7,768,000 8,042,000 5,517,949 68.6% 7,935,000 (107,000) -1.3%
Procurement 3,015,000 3,101,000 2,018,203 65.1% 2,877,000 (224,000) -7.2%
Human Resources/Labor Relations 3,124,000 3,124,000 2,046,886 65.5% 2,933,000 (191,000) -6.1%
City Clerk 1,914,000 2,081,000 1,308,595 62.9% 2,052,000 (29,000) -1.4%
City Attorney 7,010,000 7,654,000 4,606,468 60.2% 7,090,000 (564,000) -7.4%
Housing & Community Services 4,291,000 6,148,000 2,558,437 41.6% 5,853,000 (295,000) -4.8%
Planning 5,790,000 6,074,000 3,658,153 60.2% 5,786,000 (288,000) -4,7%
Environment & Sustainability 2,139,000 2,386,000 758,761 31.8% 2,329,000 (57,000) -2.4%
Tourism and Culture 3,566,000 3,661,000 2,521,118 68.9% 3,645,000 (16,000) -0.4%
Economic Development 2,571,000 2,993,000 1,199,649 40.1% 2,881,000 (112,000) -3.7%
Code Compliance 6,872,000 6,886,000 4,965,993 72.1% 6,734,000 (152,000) -2.2%
Parks & Recreation (including Golf courses) 42,998,000 44,067,000 27,376,159 62.1% 42,167,000 (1,900,000) -4.3%
Property Management 3,698,000 3,848,000 2,624,629 68.2% 3,719,000 (129,000) -3.4%
Public Works 16,086,000 17,021,000 10,737,428 63.1% 15,464,000 (1,557,000) -9.1%
Capital Improvement Projects 5,838,000 6,003,000 3,887,409 64.8% 5,504,000 (499,000) -8.3%
Police 130,195,000 133,588,000 94,387,631 70.7% 132,689,000 (899,000) -0.7%
Fire 100,220,000 102,036,000 76,317,641 74.8% 105,381,000 3,345,000 3.3%
Citywide (net of individual items below): 15,389,000 19,817,000 6,105,353 30.8% 17,150,000 (2,667,000) -13.5%
Normandy Shores 282,000 282,000 0 0.0% 282,000 0 0.0%
Capital Renewal & Replacement 1,944,000 1,944,000 0 0.0% 1,944,000 0 0.0%
Info & Comm Technology Fund 300,000 300,000 0 0.0% 300,000 0 0.0%
Capital Reserve Fund 0 1,100,000 1,100,000 100.0% 1,100,000 0 0.0%
Pa -As-You-Go Ca ital Fund 3,974,000 3,974,000 0 0.0% 3,974,000 0 0.0%
TOTAL EXPENDITURES 382,618,000 40 1,246,000 262,637,794 66.4% 394,366,000 (6,880,000) -1.7%
EXCESS OF REVENUES OVER/ UNDER EXPENDITURES 0 0 90,939,638 22.7% 20,06 3,00 0 20,06 3,00 0