I was recently asked what the hardest part of my job is. I didn’t have a quick answer; indeed, there are many challenges that as City Manager I address on a daily basis. But finding a way to provide our residents and businesses with the services they tell us they need and want, efficiently and with fewer resources, has been an important focus of my administration – especially during tough economic times.
After months of review and discussion, on September 20th the City Commission approved our new fiscal year budget. Our budget, much like your household one, has been dramatically affected by a variety of factors and, just like you, we cannot budget to spend more than we have.
The “General Fund” (the major source of funding for the most City services), includes revenues from various sources – the primary source being property tax revenues. Since their peak in FY 2007/08, our city’s property values have declined more than $4.7 billion (18%). In these three years, the General Fund absorbed almost $43 million in recurring reductions, representing almost $50 million and 245 employee positions across this and all funds. This year we were challenged with an additional $29 million revenue gap to fill.
The other part of the budget equation is managing expenses. These range from costs for providing services, which increase just like market costs increase. And, just like many other governmental agencies, it includes increased personnel costs, including employee benefits.
Because our community continues to tell us that they value and want to keep current service levels, beginning earlier this year during several Commission Retreats, Committee budget workshops and meetings over the summer, the City Commission and the administration developed a budget designed to keep those services while considering the available resources. This included negotiating employee “give-backs” with the City’s five labor unions to reduce pension, wage and benefit costs. As of last week the City reached agreement with all of our unions and, coupled with the savings from nonunion employee give-backs, we were able to fill approximately $15 million towards the funding gap.
Operational efficiencies, revenue enhancement opportunities and reductions and adjustments to fees to cover actual costs also helped to address the gap. But one last piece of the puzzle was an adjustment to the City’s millage rate. Even with this modest millage increase of 0.5600 (which is 1.2 mills or 16% lower than FY 2006/07 when property values were similar to 2010 values), total property tax revenues will still be approximately $18 million below FY 2006/07 levels. In simpler terms – this represents about $56 per $100,000 in taxable value. It is important to note that since FY 1999/00, the City’s property tax rates have declined approximately 2.8 mills.
To offset any impact, including increased taxes by other jurisdictions such as the County and School Board which we cannot control but represent almost twothirds of a typical tax bill for City residents and businesses – the City’s water, sewer, and stormwater rates will remain flat next year, and we are reducing household sanitation fees for a combined savings of $140/year per household.
In spite of the challenges we faced this year, I am confident that we will be able to continue to provide our residents and businesses with the services and programs that they have told us make our City a fantastic place to live, work and play.
To see the City’s approved budget, visit miamibeachfl.gov.