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CITY OF MIAMI. FLORIDA
INTER -OFFICE MEMORANDUM
Richard L. Fosmoen DATE December 15, 1980 F, )
City Manager
SUB'EC, FY 182 Budget Projection
and Proposed Reductions
Howard V. Gar REFEREN ES
Assistant City Manager
ENCLOSURES
During the City Commission's deliberation on the Fiscal Year 1981
Budget, a Motion was passed instructing the City Manager to re-
duce the Adopted Budget. This action resulted from their concerns
that the development of next fiscal year's budget will be difficult
in view of rising inflation, the State imposed limitation on ad
valorem taxation (TRIM Bill) and impending union negotiations for
Police, Fire and AFSCME employees.
The City Commission did not officially express the amount of
reduction for the current budget, but some of them have indicated
that 7% or 10% seems to be reasonable. Before a reduction level
is established, a projection of next year's budget is needed to
determine the extent of next year's problem. This information can
then be used to determine what actions need to be taken in the
current Budget to address this problem if we continue on the policy
that we will address next year's problem immediately. It should be
noted that the projection is merely a reasonable estimate of the
future and may change as circumstances change.
FY '82 Budget Projection
The Department of Management and Budget has prepared a projection
of next year's budget and their conclusion is that the City will
experience a $4 Million shortfall if services and resources are
maintained at the levels adopted by the City Commission for FY '81
(See attachment "A"). This projection was based on a number of
assumptions. As these assumptions change, so will the conclusion
of the projection change.
Although all of the assumptions will have an effect on the conclusion
of the projection, some are more significant than others. The most
critical assumption is that the City will increase its revenues
from ad valorem taxes by the amount allowable by the TRIM Bill which
is 8%. This action will generate 5.5 Million Dollars. Another
significant assumption is the cost of union negotiated salary in-
creases. Our estimate assumes that Police, Fire and AFSCME will
settle for a 10% increase. The Sanitation Employees Association
(SEA) is in its last year of a 3-year contract which requires a 6%
salary increase for FY 182. The cost of the 6% for SEA and 10% for
all other unions is $6 Million. Other significant assumptions are
0 "" r'
Richard L. Fosmoen
City Manager
Page 2
those relating to Carryover Fund Balance, Federal Revenue
Sharing, Pensions, and the Enterprise Funds. With regard to
the Carryover Fund Balance, it is assumed that the City will
save $1 Million in the current Budget to use in the FY '82
Budget. This $1 Million is in addition to whatever reductions
that will be made to prepare for next year's shortfall.
It is assumed that the Federal Revenue Sharing Program will contribute
$8.5 Million to the General Fund. As you are aware, Congress has
not approved an appropriation for the current year Budget. However,
according to our sources in Washington, both Houses have recently
approved an extension of the program for three years and a favorable
response is anticipated in the very near future. This is a critical
area that requires close monitoring since lack of positive action
will affect the current year as well as the ensuing year budgets.
The cost of pension is increased by 5%. This assumption reflects
the continuation of the City Commission policy adopted that began
with the adoption of the FY 180 Budget.
A significant assumption for the FY '82 Budget is that the financial
burden of the Enterprise Funds on the General Fund will grow at
prior levels. The current budgets of the Enterprise Funds require
a contribution from the General Fund of approximately $672,000.
This contribution is necessitated by the fact that the Coconut
Grove Exhibition Center, Municipal Auditorium, Marine Stadium and
Miami Stadium are not self supporting. For FY 182, the anticipated
burden is approximately $1 Million.
Effect on Departmental Budqets
To achieve the goal of the City Commission that the City begin
budget reductions in FY '81 in sufficient amounts to begin Fiscal
Year 1982 with no budget shortfall, departments will have to reduce
$4 Million from their current budgets by September 30, 1980. If
departments decided to achieve their reductions by reducing salaries
and wages, the result would be the reduction of 184 positions from
the current Budget. It should be noted that the earlier the imple-
mentation of the reductions, the more the City can save toward its
Carryover Fund Balance which reduces the estimated shortfall for
FY '82.
Attachment "B" represents departmental reductions that have been
used for discussion with the City Commission. However, these re-
ductions amount to approximately $5.3 Million (7%) or $1.3 Million
more than the estimated shortfall. It is suggested that those
Richard L. Fosmoen
City Manager
Page 3
reductions approved using the 7% figure should be maintained
since they are reasonable and should be implemented regardless
of the amount of the shortfall. Future reductions should be
based on the $4 Million estimate. Obviously, any changes to
the $4 Million estimate will require change to departmental reduc-
tions.
Alternatives to Achieve Budget Reductions
Budget reductions will be achieved by implementing efficiencies,
increasing revenues and reducing resources. All departments have
been instructed to identify their services on a broad level and
to prioritize them in order o` importance. These prioritized
services should be reviewed to determine where efficiencies can
be made. If this process results in a savings less than required,
departments are suggested to determine those areas where revenues
can be increased or implemented. Areas of particular concern are
those which are not self-supporting and where revenues have not
been increased for some time.
The last step in the budget reduction process is resource reduction.
Departments are asked to use their prioritized service level lists and
reduce resources and services based on the least important service.
Hopefully, the culmination of this last step will result in depart-
ments achieving their required reductions. This last step, in most
cases, will result in position reductions. It is the intention of
departments to achieve this process by attrition; however, in those
cases where attrition is very minimal, layoffs will have to be im-
plemented.
It is recommended that actions approved by you be implemented before
the end of the second quarter (March, 1981). This time frame will
permit 1) immediate savings to offset next year's anticipated short-
fall, 2) operational adjustments to be made early and over a period
of time instead of all at once, 3) the orderly development of next
year's budget, 4) the lifting of the hiring freeze and, thereby,
normalize operations, and 5) the City to inform its citizenry of
service changes and the reasons for these changes.
Even though the $4 Million shortfall has been allocated proportion-
ately to each department, the City Commission has agreed with your
philosophy that some departm,_-.4:s may not be able to achieve their
proportionate share without undesirable results and that all depart-
ments should implement cost -saving efficiencies.
Everyone should be aware that Police, Fire and Sanitation represent
65% of the General Fund Budget and, therefore, is required to reduce
on a proportionate basis, proximately $2.6 Million of the $4.0
Million shortfall. Therei e, any reduction in these departments'
pro-rata share will have to be offset by reductions in the remaining
Richard L. Fosmoen
City Manager
Page 4
departments or additional revenues or a combination of the two.
The budget reductions, revenue increases and efficiencies that
have been proposed and accepted as of today are as follows:
1. Community Development $ 18,737
2. Computers and Communications 93,960
3. Planning 40,348
4. Management and Budget 99,384
5. Leisure Services 374,207
6. Parks 343,132
7. Solid Waste 385,159
SUB TOTAL $1,354,927
8. Dinner Key Marina Management
and Rates 750,000
9. Miamarina Rates 450,000
10. Marine Stadium Management 150,000
SUB TOTAL 1,350,000
TOTAL $2,704,927
These figures represent the annual savings if these actions
were
implemented at the beginning of this Fiscal Year. Since we
are
into the third month of this Fiscal Year, the total savings
can
not be realized. However, if these actions are implemented
in the
very near future, the City could realize $1.2 Million this
Fiscal
Year as a contribution to the Carryover Fund Balance (which
is
estimated at $1 Million and thereby further reducing the $4
Million
shortfall). Furthermore, if these budget improvements are continued
in FY '82., the savings will be at least $3.9 Million.
Therefore, the savings of $1,230,618 this Fiscal Year and the savings
of $2,704,927 in Fiscal Year 1982 results in a cumulative total
savings of $3,935,545 as compared to the $4 Million shortfall. The
remaining shortfall of $72,415 can be accomplished upon analysis
of other alternatives.
ATTACHMENT "A"
ASSUMPTIONS FOR PROJECTING FY'82 BUDGET
1. The estimated carry-over fund balance for FY '81 will be $1,000,000.
2. The assumption for Property Taxes is that the City will receive 8% more
in property taxes than it received in FY '81 plus new construction.
3. This is based on a millage rate of 9.101 which will generate
$58,597,052 or $5,503,284 more than the FY '81 Adopted Budget.
4. Homestead Exemptions will not be funded.
5. $3,500,000 will be transferred to the General Fund from FP&L Franchise
Capital Improvement Revenues.
6. Federal Revenue Sharing will be funded at approximately $8,500,000.
7. No Countercyclical Revenue Sharing has been anticipated in FY '82.
8. The waste disposal fee charged to City residents will be $75. This /
will generate $6,750,000 in revenue.
9. Fees paid to Dade County for disposing of the City's solid waste will
increase by $379,900 (from $3,799,000 to $4,178,900).
10. Workers' Compensation, Group Insurance, and Liability Insurance will
increase by $672,100.
11. Provisions have been made for $17.0 million in Pension costs, which is
5% ($808,604) greater than the current year's appropriation.
12. FICA costs will increase by 10%.
13. Funds have been provided for a 10% union -negotiated salary increase for
Fire, Police and general employees which total $6,014,875. . Funds have
been provided for a 6% salary increase for SEA members which total
$414,335.
14. Street'Lighting costs will increase by $583,869.
15. The deficits for the Enterprise Funds for FY '82 will be $675,737 (an
increase of $4,044).
16. The contribution to the Department of Building and Vehicle Maintenance
will be $2,011,626 higher than the current year's Adnnted Budget.
17. All non -payroll items are adjusted to reflect anticipated increases.
18. No provisions are included for the $2 million Public Safety Fund.
S M RY OF FY 182 BU[iL3ET ESTIMATE
ATTACHMENT "A"
I. BUDGET SUMMARY
REVENUES
APPROPRIATIONS
SHORT FALL
Adopted Budget
1980-81
$121,849,447
121,849,447
$ -0-
Budget Estimate
1981-82
$127,828,651
131,836,611
$ 42007,960
Difference
$ 5,979,204
9,987,164
$ 4,007,960
II. SUM!dARY OF REVENUES
Gains $
7,671,693
Losses
(1,692,489)
_
Gain 5,979,204
Gains
1. Property Taxes
$ 5r503,284
2. Waste Disposal Fees
727,500
3. Carryover Fund Balance
500,000
'
4. Utility Service Taxes
395,995
5. Building Permits
143,150
. 6. Electrical Inspections
133,218
7. Plumbing Permits
82,609
8. Certificate of Use Accessory
37,500
9. Public Hearing Fees
35,000
10. Paybacks from Self Insurance
31,454
11. Boiler Inspections
31,000
_
12. Cigarette Tax
28,000
13. Other
22,983
Total Gains
$ 7,671,693
Losses
1. Homestead Exemption
$ 11067,069
2. Interest - Interama
500,000
3. Dade County School Board
100,000
4. Beverage Licenses
19,870
5. Traffic Permit Fees
5,550
Total Losses
$(1,692,489)
Net Revenue Gain
$ 5,979,204
III. APPROPRIATION INCREASES
-
Salaries and Wages
$ 7,184,918
.
Other Pay
1,736,486
Operating Expenses
2,107,326
Capital
(1,041,566)
Increase in Appropriations
$ 9,987,164
IV. SHORTFALL
$ 4,007,960
W
ATTACHMENT "A"
SUMMARY OF APPROPRIATION INCREASES
I. Salaries and Wages
$ 7,184,918
II. Other Pay:
1) Pension
$ 7.72,444
2) Self
Insurance
497,914
3) FICA,
Overtime, Holiday Pay, etc.
466,128 $ 1,7369,486
III. Operating.
Expenses:
1)
Building and Vehicle Maintenance
$2,011,626
2)
Public Safety Fund
(2,000,000) ,
3)
Capital Outlay
.(1,041,566)
4)
Street Lighting
583,869
5)
Scale Fees
379,900
6)
Computer Repairs and Maintenance
—
and Telephone
183,650
— 7)
Self Insurance
174,186
8)
Utilities
131,926
9)
Severance Pay
148,616
10)
Election
112,000
11)
Enterprise Fund Deficit
4,044
12)
Other
377,509 $ 1,065,760
$ 9,987,164
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ATTACHMENT "B"
City
of Miami
Fi!E-51
Year 1981
1% Budget
Reductions
7%
Mayor
$ 10,978
Board of Co=issioners
14,030
City Manager
52,766
Information and Visitors
29,139
Building and Zoning Insp.
129,656
City Clerk
18,422
Civil Service
8,351
Conrunity Development
41,104
Computers and Cor-,,nuni cations
75,755
Convention Bureau
10,192
Finance
99,591
Fire
1,243,6-70
Human Resources
67,702
Law
53,492
Leisure Services
179,766
Management and Budget
77,510
Parks
278,326
Planning
35,350
Planning & Zoning Bds. Admin.
9,858
Police
1,920,110
Public Works
364,893
Solid Waste
597,379
Trade & Commerce Development
24,430
TOTAL GENERAL FUNID
$5,342,470
ENTERPRISE FUNDS
Coconut Grove Exhib. Center
$ 21,779
Municipal Auditorium
18,912
Marine Stadium
14,429
Miami Stadium
28,508
TOTAL ENTERPRISE FUNDS
83,628
TOTAL OPERATING APPROPS.
$5,426,098
CITY OF MIAMI. FLORIDA
INTER -OFFICE MEMORANDUM
Tp Richard L. Fosmoen DATE
City Manager
SUBJE-T
FR. Manohar S. a, Director RLFERENC LS
_
Department o agement and Budget FNCLOSURFS
December 11, 1980
TILE
Approval to Fill Vacancies
There are seven existing vacancies in the Divisions of Budget
Management and Operations Analysis. To meet a part of 7% budget
reduction, three of these positions are being down -graded as follows:
Vacant Position Down -Graded To
Two Chief Vanagement Analyst Two Senior Management Analyst
One Senior rSanaaement Anaylst One Administrative Assistant II
Additionally, one Chief Management Analyst from the Division of Budqet
' Management will be leaving us on January 2, 1981.
The revised vacant positions are summarized below:
Budaet Management
Chief 1anagement Analyst 1
Senior E"anagernent Analyst 4
Administrative Assistant II 1
Total 6
Operations Analysis
Senior Management Analyst 2
Total Vacancies 8
The 1981-82 budget process has already begun. The Booze Allen
recommendations, accepted by the City Commission at its meeting on
November 26, 1980, are awaiting implementation.
The present hiring freeze will place a severe burden on the capability
of this Department on preparing the next year's budget and
implementing the Booze Allen recommendations. It is requested,
therefore, that the above -mentioned eight positions he excluded from
the hiring freeze.
/so
CITY OF MIAN11. FLORIDA /
INTEROFFICE h1EMORANOUM C4 pi;
Richard L. Fosmoen
City Manager
i
kianohar S. Sur
- Department of �1�p
DATE November 14, 1980 FILE
SUBJECt Approval to Fill Vacancies
Acting Director REFERENCES
(ennt and Budget
Jti ENCLOSURES
The Director's Office and the Division of Budget Management have the
following four budgeted secretarial and typist clerk positions:
Secretary II 1
Typist Clerk III 2
Typist Clerk II 1
Total 4
Before the current hiring freeze became effective, only two of the
four (4) clerical positions were filled. One of these clerical
employees has since resigned and another has told me that she would be
leaving within three weeks. Consequently, the Director's Office and
Division of Budget Management will be without clerical assistance.
Additionally the budget for the Division of Internal Audit includes
two vacant positions - one Auditor II and one Auditor I - for
auditing:
a. funds available to the City from CD Block Grants and the
various other grants and their utilization in accordance
with budgetary approval and applicable Federal, State and
City requirements.
b. funds realized frol,r bond issues for Capital Improvement
Projects to ensure proper project accounting,
The current hiring freeze affects the two Auditor positions, although
funds for them have been made available under the Indirect Cost
Allocation Plan. This will further delay performance of several
audits and coripliance with Federal, State or City requirenents.
It is requested, therefore, that the following positions be excluded
from the hiring freeze:
Auditor II 1
Auditor I 1
Secretary II 2
Typist Clerk III 1
Typist Clerk II 1
Total G
/cl
cc: Howard V. Gary