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HomeMy WebLinkAboutCC 1978-09-13 MinutesCITY OF MIAMI 40 SPECIAL 'COMMISSION MINUTES SPECIAL BUDGET WORKSHOP OF MEETING HELD ON SEPTEMBER 13, 1978 PREPARED BY THE OFFICE OF THE CITY CLERK CITY HALL RALPH G, ONGIE CITY CLERK MtNUTE8 br 8PECtAL MEET/MG Or Tilt CITY COMMISSION 0f MIAMI, Ft80IbA * * * * * * On the 13th day of September, 1978, the City Commission of Miami, Florida met in the Committee of the Whole Room, at City Hall, 3500 Pan American Drive in said City in Special Workshop Session to consider the proposed Appropriations ordinance for Fiscal year 78-79. The meeting was called to order at 9:13 O'Clock A.M. by Mayor Maurice A. Ferre with the following members of the City Commission present: Commissioner Rose Gordon Commissioner (Rev.) Theodore Gibson Mayor Maurice A. Ferre ABSENT: Commissioner J. L. Plummer Vice -Mayor Manolo Reboso ALSO PRESENT: Joseph R. Grassie, City Manager R. L. Fosmoen, Assistant City Manager Vince E. Grimm, Assistant City Manager Howard V. Gary, Director Budget & Management James E. Gunderson, Director of Finance George F. Knox, City Attorney Ralph G. Ongie, City Clerk Matty Hirai, Assistant City Clerk SPECIAL BUDGET WORKSHOP SESSION. SEP 131978 Mr, Grassie: What we wanted to do today is to go through the budget not to answer every question that you will have because 1 know that you have specific questions of departments and we have two full days set aside for you to meet with departments to talk about individual programs. What I would like to do to start with is to nsk Howard Gary to stand, to put some boards up and give you a quick overview of the budget. Then 1 would like to go through all the sumaaiy schedules with you and :.gee if we cangot to the point where we're comfortable with the kind of information we have. So if we could start with the boards that might he the quickest way to get into an overview of it. Mayor Ferre: Joe, you did tell the press that we were meeting on all this so that nobody feels... Mr. Grassie: It's published in the front of the building Mayor Ferre: Okay. Mr. Grassie: Along with all the other meetings. Mayor Ferre: I know. Mr. Howard Gary: What we'll try to do is give you an overview of the the 1979 budget in view of the 1978 budget. Okay, the proposed budget for 1979 for the General Fund is approximately 97.2 million dollars. Comparing that to the 1978 97.9 million we have a reduction in the General Fund of approximately $741,000. In terms of Debt Service, Debt Service has gone up from 15,000,000 to 17.7 which is an increase of 2.7 million dollars. Overall the total budget for this year is approximately 115,000,000 as opposed to 113,000,000 for last year This represents approximately a $2,000,000 increase. The entire increase for our budg' for the City of Miami is attributable to General obliga- tion Debt Service. These are retirement of debt which was approved through referendum by the voters over a period of time. In terms of comparison of the Millage Rate for the General Fund there is no increase obviously we're at the maximum but General Obligation Debt Service is going up by 1.37 mills. Now the 1.37 mills is mainly attributable to the increase in Debt Service going from 15 to 17.7 as well as a reduc- tion in our Fund Balance of approximately 2.9 million dollars. So even though our Debt Service has only gone up by 2.7 we have to appro- priate money to offset the Fund Balance deficit that we have or recuc- tion of the Fund Balance as opposed to last year. Does everybody understand that? Mr. Grassie: Is that reasonably, does that make sense? Mrs. Gordon: Explain that, please. Mr. Gary: Ok, would you like me to? Ok. Last year we had approximately 2.9 million dollars, almost $3,000,000 in Fund Balance. This year we only have... Mr. Grassie: Excuse me. The way the Debt Retirement Fund acquires a Fund Balance is that every year the amount of millage that the City levies is not exactly what you need to retire a debt so that you have a little money left over and over a period of years this accumulates and earns interest and it has accumulated and sometimes the City has had as much as 8 or $9,000,000 back 7, 8 years ago because you were actually levying more than was necessary. Now we have been working that down gradually and that has now come to an end which means that we not only have to levy the amount of money that is required to meet the traditional Debt_. Service but we also have to make up the money that we used to take out of this surface. Mrs. Gordon: And it is completely depleted now? Mr. Grassie: Within a few hundred thousand, I think that there may be left $311,000. Mrs. Gordon: Will we be cleaning it out, will we be removing it com- pletely or are we going to try to replenish it? 02 $Ep 131979 Mayor FerrL: He's going to replenish it, Mrs. Gordon: You want to replenish it? Mr. Grassie: Well, you want to replenish it if you oan do it withant increasing Debt Service Millage. The ideal thing is to keep your Debt Service Millage fairly constant where it doesn't fluctuate up and down. Mrs. Gordon: But are you going to replenish it this year in your projected millage or not? Mr. Grassie: No. Mrs. Gordon: You're not. Mr. Grassie: Well, this is a high year so we would not intend to replenish it this year. What you try to do is replenish it in low years. Mayor Ferre: On the surface it have 8 or $9,000,000 sitting in understand that it isn't a bad interest than you're paying. Mr. Grassie: Well, this is tax money so you really don't pay any interest on it - that's even better. sounds like a bad thing to do to the bank but let's make sure we thing because you're making more Mayor Ferre: So in other words obviously you don't want, you know at this point when we're up to a Millage Rate of 13.2 or 14.5 we don't want to go any higher but in years past the fact that we had 5 or 6 or $7,000,000 in the bank earning interest was not such a bad thing because that in itself strengthened the City's fiscal posture whenever we went out to sell bonds. Mr. Grassie: Now there is one other factor about this and that is that by State Law we don't have the option of imposing a lot of Debt Service Millage that we don't need. What we're supposed to do is impose pretty much what we need. Mayor Ferre: Well how do we end up having $9,000,000? Mr. Grassie: Because of this not being exactly accurate... and over a period of years they've been.... Mayor Ferre: But you can't use that money for General Revenue, that's got to be strictly for debt retirement. Mr. Grassie: That's correct. Mrs. Gordon: Yes, but it does raise interest and that could be fed into the General Fund, can the interest be removed from that? Mr. Grassie: No. Mrs. Gordon: It has to build up on its own. Mayor Ferre: And it eventually goes to debt reduction so use the interest or you can't intermingle funds. Mrs. Gordon: No but by raising the interest on it eventually you are going to tax people less because this has received a return, you can t Mr. Gary: Ok, I'd like to go to the changes in the General Fund. Mayor Ferre: Excuse me, Howard, before we do that since obviously the most important change and I think all of us have to answer to our constituents - why would taxes go up - taxes are going up because of debt. And I think we really have to before we get into the General Fund which is where we're going to be spending 90% of our time I think it is important for all of us to understand why our General Obligation Debt Service needs to go up from 3.2 to 4.5 number one and number two I've got some very basic questions: In the past what's the highest we've ever been? Have we ever been to 4.5 mills? What is the total debt of the City of Miami? How much more is it this year than it was last year? Where did the money go, vhat wa it used for? Because that s the main thing that we re going to have to 03 SEP 131978 • answer since in effectyou have a decrease in the General Fund of three-quarters of a million dollars where the increase where the money is coming from is from the Debt Service. Mr. Grassie: And it is not a proposed tax increase the way the newspapers would have it since we have no option about paying our debts. Mrs. Gordon: I think that is a very important point that we have to in some way get across to the people because it's the peoples' debt, it's a debt that they by their referendums incurred and I think we have to make a real strong point of making them understand it. Mr. Grassie: If_ you'd like to turn to page 9, the little green circle page 9 at the top of the page you will see in the fourth column there, the Debt Service column which covers the City's experience from 1960 to present and .... Mayor Ferre: So the answer is that we have to go back to 1969 before we had a Debt Service this high as far as the millage is concerned. Mr. Grassie: And what has happened is that you were this high and higher back that far and it's gone down slowly and then it has been coming up again and that is strictly based on the number of bond issues that have been outstanding. Now we can show you how much has to be repaid on every bond issue if you'd like, for that we have to get a copy of the City's financial report. Mayor Ferre: Joe, you weren't here but I remember back when Dave Kennedy was Mayor or even before that in the 1969 Bond Issue that was passed, perhaps 72 when you all were on the Commission that there was a commitment made by Mel Reese and the Commission at that time that we would never exceed - you know legally so we all under- stand this Mrs. Gordon: Did what? Mayor Ferre: Well, that's what I'm trying to remember. Legally we ca_, have 157 or our tax base, total assessed evaluation as debt. Our total assessed evaluation is how much now, this year? Mr. Gary: Four Billion is .... Mr. Grassie: In round figures. Mayor Ferre: Four billion, all right. Fifteen percent of billion is.... Mr. Grassie: It's 3.8 billion really. Mayor Ferre: Fifteen percent of four is $600,000,000 is what we could owe. We presently owe how much? Mr. Grassie: We presently owe about a third of that. Jim, do you remember? Mr. Gunderson: It was approximately $130,000,000. Mr. Grassie: It's about a third. Mayor Ferre: I just want to get this into perspective for Rose and Father and myself so that when people ask us we know what's going on. Is this another New York? So that we can explain some basic things. We can theoretically borrow up to $600,000,000. We're now borrowing 130,000,000. Now 130,000,000 for a City the size of 350,000 people is not excessive, that is below the average. Now there is another way of measuring this. As I remember in some of these meet- ings I've been to they use the factor from 12 to 15% of your total budget, if you go over 15% then it is getting high. Mr. Grassie: Debt Service? 04 SEP111978 Mayor Ferre: Yes, Debt Service of you t6tat budget, NOW your total proposed budget is hot. much? Mr, Grassie: Well, 118,000,000. Mayor Ferre: All right, 10% of that 'would" be $18 , 000 , 000 . Your debt service is about,... Mr. Grassie: Seventeen. Mayor Ferre: So in other words our Debt Service is about 10% of our total budget. As I understand it in good fiscal practice in cities conservative figures are about 12%. Mr. Grassie: That's conservative. Mayor Ferre: So that's another test. So we're one-third of what the state would allow us, we're average for a city this size and as a percentage of our budget it is not excessive. Now the last thing I wanted to ask you is we owe $130,000,000, have we ever owed $130,000,000 before? Mr. Grassie: Has our total debt ever been more than that? I'd have to go back to the tables, sir. The likelihood is that it is more than it has been at any single time in the past, you know I would think. INAUDIBLE Mayor Ferre: Well, it is our problem in a sense that the people passed the bond issue but we're the ones as the Commission that we . decided to put it out and sell it and do it. And during the 69 Bond Issue and in 72 when I think the both of you were here then - I wasn't in 72 but I was in 69 - Mel Reese and the leadership of those bond issues made commitments I think we ought to go back and research. Maybe you might remember. Mr. Grimm: No, I don't remember that, Mr. Mayor. Mayor Ferre: Well, we made commitments that the millage would never exceed and I think we had four or five that we made a commitment to the people that the Commission, it was only that Commission, they can't speak for us, that that Commission would not increase the mil- lage beyond a certain point no matter what because as it is we still have a lot of bond issues that we haven't sold. Isn't that true? Mr. Grassie: A reasonable amount, yes. You mean of authorized bonds which have not been put on the market because we don't want to put them on until the projects.... Mayor Ferre: Let me ask you that question because that's something that people may ask: How much, if this Commission wanted to go out and get the City further in debt how much has been authorized that hasn't been issued? Mr. Grassie: At least another mill. Mayor Ferre: No, in dollars. Mr. Grassie: Oh, $60,000,000 sticks in my mind. Mr, Gunderson: That's with the last and then you authorized another $15,000,000, the people voted for storm sewers. Mayor Ferre: For storm sewers, right, that passed? Mr. Gunderson: Yes, 15. And then out of that we have included in this figure a sale of 18,000,000 that is going to come before you here very shortly to be sold in November. So basically that gets you down to about $60,000,000 again. Mayor Ferre: Wait, you got me lost. If we owe 130 and you're going to sell 18 that will bring it up close to 150, 05 SEP 131978 Mr. Grassie: ... No, we're talking about authorized but not issued bonds which were at 60, they've gone up 15, they're coming down by 18 because we're going to ask you to issue 18 so we're back at 60 more or less. Mayor Ferre: So Mr. Grassie, what I'm trying you know just to get, the general outline of numbers because I would like to do that as I go into these things. What we have is issued right now 130. You're proposing that that be an increase and that we authorize an additional 18 which say just to round it off is 150. Now we were at 60, 15 is passed but we're coming down 18. Okay? So in effect what we're doing is we'll be at about 57. Mr. Grassie: That's correct. 4 Mayor Ferre: That has been authorized but not issued so we'll be just to use round figures 150 that have been authorized, 57 that have not been authorized but that we could and for that the price tag is 4.5 mills and just from simple mathematics to be able to issue the other ones would be somewhat over a mill. Mr. Grassie: Well, if you went the whole 60, of course, it would be about 2 mills. Mayor Ferre: Okay. Then the next question is, and I remember Mel Reese always used to make a schedule of the reduction because he always figured out you know as to how much the people of Miami would really carry and how much we could put out. Now my question is there is a reduction? Mr. Grassie: Yes. Mayor Ferre: Okay. What is your projection for the two or three years? Mr. Grassie: After next year it will continue to go down. That is the millage attributable to debt service for the next ten years after next year will go down. Mayor Ferre: Assuming we don't issue anymore. Mr. Grassie: Assuming there will be no more issues. Mayor Ferre: Okay, so that's the question. How much will it go down? You're going to sell 18 million, now once that's done you're up to 4.47 because I assume that that includes the sale, an estimated sale - you don't know what it's going to be but you're estimating it will be ' 6% or 7% or what have you - and that's in there. Mr. Grassie: Six and three-quarters, what is your estimate? Mr. Gunderson: About Six and a half. Mayor Ferre: And you're going to market when, in November? Mr. Gunderson: November 9th. Mayor Ferre: Okay, so assuming that you get 6 3/4 and you sell the 18 million on November 9th my question is this, and that's 4.487 and nothing else, what happens next year? What does that go down to? Mr. Grassie: Well, you're asking me to remember. It goes down slightly, it goes down to just about 4 as I recall. Mayor Ferre: Well that's not slightly. Mr. Gunderson: Just over 4. (INAUDIBLE) Mayor Ferre: 197? UNIDENTIFIED SPEAKER: Yes, sir, 06 SEP 131978 4 if* M-. rassie: So basically What t teas telling you is tight and that is that after next year, otie tote year to go, the thing starts taking off. Ma,►o•r Ferre: Well, but see that's a total figure of debt service. Mr. Grassie: Yes, what you're looking for is the millage. Mayor Ferre: The millage, that's what people want to know. Mr. doe Citizen doesn't understand all that stuff. He says, you know, are my taxes going to keep going up because you guys are out there speed- ing our money? Mr. Gunderson: You've got an offsetting factor called increased assessment. Mr. Gary: Right, you've got to determine the assessed evaluation to determine what the millage is going to be because if assessed evaluation goes up that's going to have an affect. Mayor Ferre: People don't understand that that's just dollars out of their pockets, it's taxes. You know, are my taxes going up because you're out there --- Mrs. Gordon: You've got a lot of new construction, however, and the tax base should broaden and then you're going to have a reduction. Mr. Grassie: The generalization that you can make is that if your tax base goes up by 5% which is reasonable to expect and if the amount that you actually have to pay out in total dollars is going down as this indicates that peoples' taxes would be cut as those two things work in their favor - the tax base going up and the amount of money that you have to pay coming down so you would anticipate that we could probably cut the millage by about 10 which would be So you would get it down, you know you'd get it down to about 4. Mayor Ferre: Well, you know my question to you is, Mr. Grassie, you're costing me as a taxpayer another two or three hundred dollars that I didn't have to pay last year and I want you to tell me where you spent that money. Mr. Grassie: Okay, we would have to go to each one of the bond issues that are supported by that millage and tell you what projects were in the capital program and I have them all listed. Mayor Ferre: Mr. Grassie: asking it.... Look, I'm not looking, this is not... I know that you're not asking it personally you're Mayor Ferre: I'm asking it because that's the kind of questions that I have to answer and Rose and Father Gibson have to answer to people who are asking "Why are you going up?". Mr. Grassie: The best answer is in your Capital Improvement Program. That's where the expenses are. You have a list of every project by neighborhood, by type of project, by funding source and it tells you everything you're going to do with that money for the next year. Mayor Ferre: Well, I really would like to know just for my knowledge, what are the ten major projects that we've done where that money has gone. Mr. Grassie: Ok, we can get that for you easily. Mayor Ferre: I mean is there some of it in Coconut Grove? Is some of it in Culmer? Is some of it in the northeast area? Did Little Havana get anything out of this? Mr. Grassie: Yes. We're letting contracts on that sort of thing every day, you're going to have a pile of them tomorrow or the day after tomorrow 07 SEP131978 Mayor Ferre: If you follow the thrust of my questions, we're going to be dealing with the employees and with a lot of problems on the general budget but where we're at as of now as far as the newspaper is concerned is the City of Miami is increasing taxes to the people, IIit's increasing it because well you know that's the way they inter- pret. It is increasing it because we're out there increasing the debt of the City, never mind that the citizens voted for it and ap- proved it and we're going out there increasing by an amount, we vent II up from 3.2 to 4.5 which is a 20 increase in the debt service. , Mr. Gary: I'd like to make a point, if I may, Mr. Grassie. You made II a comment that we were increasing the taxes by $200. Mayor Ferre: By 20%, 25%, 11 Mr. Gary: Ok, what we did, we're showing you here the costs for a 11 home assessed at $30,000 and really the increase to that homeowner IIfor the year debt service will only be $38, approximately $39 so it's not as significant as.... II Mayor Ferre: For a person who is living on the kind of budgets that we have 35 or 40% of our community living on $38 is a very signifi- cant amount of money. Mr. Gary: Well I don't question that. Mr. Grassie: We're not putting that down we're just saying that this is what it would be. Mayor Ferre: Okay. Mr. Grassie: Vince, did you want to say something? Mr. Grimm: Well, I was just going to relate that the basic type of that you would be talking about that would increase your debt service are those that are done with General Obligation Bond Funds and they are mainly the completion of your sanitary sewer system which is actually the biggest expenditure of funds that you do out of that, your highway program and your Parks for People Pro- gram. Now those are the three major areas. Mayor Ferre: I have to have an answer, Vince, because I have to answer people like you know the voters and I also have to answer people.... who want to know that. 4110 Mr. Grimm: I know, but part of the complication comes in that is that the cost of the project as you did last year may lag getting into the books by another year simply because of the assessments. mon Mr. Grassie: But we can identify ten major projects. Mr. Grimm: Yes, we can identify ten major ones. Mayor Ferre: We have to have accountability. I've already been asked a question, "What are you doing, this is another New York, you're going out there and borrowing money and breaking the City." mm Mr. Grassie: I'm sure that you have. 1 • eV: Gibson: Wouldn't it be Wise to get the listing of the p ojeots in the different areas? Mk, Grassie: Yes. Mr. Grimm: Well what I guess I'm trying to say to you is that building a new City Hall and renovating the Dinner Key Auditorium and building a Convention Center and things like that are not the kinds of projects that are causing peoples' tmces to go up. Mrs. Gordon: That's another thing you ought to include in your summary. Mayor Ferre: Well, what is? Mr. Grimm: Sanitary sewers and highways and parks, that's what's causing your not federal grant projects or not C. D. pro- jects or not other things where you're spending other sources of funds. Rev. Gibson: But to the man out there you need to tell us that here are ten projects, one in Liberty City, one in the downtown, we need that....(Inaudible comment by Mr. Grimm) I hear what you're saying but when I talk to the guy, you know I can't tell him the whole problem, I must say to him because it's coming up, I would like to see the staff by - well, it shouldn't take more than ten days, you ought to be able to do it tomorrow. ... List ten. Mayor Ferre: And keep it simple and one page. Rev. Gibson: List ten projects and give the location and you know once we do that we may not have the same problem. Mr. Grassie: Just as a little footnote on this, we are in the process right now of putting up on our parks some signs which you may notice in the next days which identify the improvements and the amounts of money spent in City parks from the Parks for People Bond Fund so that we're trying to make a connection of lines between the bond program and the improvements that took place but I think they'll be seeing some of those in the next week or so. Mayor Ferre: Now, where were we? Mr. Grassie: Shall we move to the General Fund? Mr. Gary: Ok, with regard to the General Fund revenues last year we had 97.9 million, this year 97.2 million for a reduction of approx- imately $700,000. Now the changes in the revenues are as follows: In ad valorem taxes we will gain $2,000,000. It's gone up from 36.8 million to 38.8 million. Mayor Ferre: You mean 3.8 million? Mr. Gary: No, on ten mills. Ten mills last year generated.... Mayor Ferre: Ok, I read you. Mr. Gary: And this is in commercial, we're going to go up 4.8. Most of this is attributable to the increase in the utility service tax, we're going up from 12.8 to 17.2. This mainly attributable to the rate increases granted the utility companies as well as increased usage. Mayor Ferre: Now that's tax on tax. Mr. Grassie: That's an important point though. The only thing that is saving us is the fact that we're getting 4.4 million dollars of additional revenue from Florida Power and Light and that is because of the way their rates have gone up through their rate hearings. Mayor Ferre: And we're using that in the General Fund. p9 SEP 131978 Mr. Grassie: Yes. Mayor Ferre: Which is another trend that has beet estAbiishedi1 the last four or five years. There was a time when that money wasn't used for for that. Mr. Grassie: Yes, but when the City grants across the board increases from that source. There is no way of backing out of it, we're locked in forever. Mr. Gary: Miscellaneous revenues have gone up by $700,000. This is mainly attributable to the addition of approximately $600,000 from the Conference Convention Bond Fund which will be administered in t:he General Fi.!nd and $100,000 that we will be putting in the Public Works Department and as a result off -setting a revenue from FP & L. If I may what happens is we have street lights within the City and the cost is approximately, a little over $3,000,000. FPL charges us a franchise fee on top of that. Mr. Grassie: Our own franchise fee. Mr. Gary: Right. So we pay them, they in turn turn it back over to us so it is really an accounting mechanism to put the money in our budget to pay them whichin return we receive back. Mr. Grassie: Then it costs $109,000 if we pay all the franchise taxes. Mrs. Gordon: How long do they hold it before they return it? Mr. Grassie: Longer than we would like, one year. Mrs. Gordon: They do? They make revenue on our money. That fair. Mr. Grassie: It's a detail of interest. Rev. Gibson: I want to make sure you remember that. Mrs. Gordon: I did, it registered. Mr. Gary: Ok, so we have an increase of revenues of approximately 7.5 million dollars. Now the negative side in terms of federal funds we've lost 4.3 million dollars. We've lost 2.7 in Federal Revenue Sharing and this is mainly attributable to our fund balance. Over the years we've had fund balance in our Federal Revenue Sharing that we've carried over from year to year. Now that is down to zero. Mr. Grassie: Do you remember when we were talking about the tough budgets that we've had in the last couple of years, we tried to main- tain, we had a $3,000,000 balance - it's tough this year but it is going to be worse next year. Well, that's coming down and we are down now to the point where there is no longer a balance to carry for- ward. Mrs. Gordon: There is nothing left in the account? Mr. Grassie: Except for the revenue that we get each year, there is nothing.... Mrs. Gordon: No lag? Mr. Gary: No lag. The other reduction is due to Countercyclical Revenue Sharing, we'll talk about that further but in essence we're anticipating a loss of 1.5 in Countercyclical Revenue Sharing. Mayor Ferre: That's the thing that Congressman Flood held up in Com- mittee, Joe, and I went up there to see Dante Fascell and he couldn't get it out and it cost us 1.6? And you had it in your original estim- ate of the budget and you've now taken it out. Mr. Grassie: Yes. UNIDENTIFIED SPEAKER: Stupid, 10 Up 131978 Mayor Terre: Mr, Grassie: This is a teductioti, Ve have 2 s 6 Tht11ioft IA but We anticipate.... Mayor Ferre: I know but the 1,6 reduction that didn't pass, 11614 it's alive in the Senate Bill. There is a Senate Bill that's alive, is that right? UNIDENTIFIED SPEAKER: Yes, sir. Mayor Ferre: Now the Senate Bill, the reduction as I understand it is more than 1.6. Mr. Gary: If I may, Mr. Mayor, in this year's budget we have 4.1 anticipated from Countercyclical Revenue Sharing. In the budget that you have before you we have 2.6 so the difference is 1.5. Mayor Ferre: And my question to you is in the Senate Bill that is alive the difference is more than 1.5. Mr. Gary: I agree. Mayor Ferre: How much is the difference? I just want to know the reality of what we're faced with. Mr. Gary: We got some correspondence from Mark Israel it is almost $900,000. the Commission and he's saying Mayor Ferre: More? Mr. Gary: We're only going to get $900,000 so it would be not 2,6. Mr. Grassie: So that's a million seven further reduction. Mr. Gary: That's correct. Mrs. Gordon: Beyond what you're anticipating? Mr. Grassie: Yes, we have two million six in the budget. Mayor Ferre: That's why I want you to realize this because this is a very critical point. In other words, let me see if I can recap it: This budget that you're proposing before us for $115,000,000,includes in it funds from the federal government in the Countercyclical Program of 2.6 million dollars. Now that is a reduction from what we got last year of 1.6. Now in the House that particular bill was killed in committee and the only thing that is keeping it alive is that there is a Senate Bill that has passed the Senate and is now going to some kind of a conference committee but if that passes, and that s the only thing that is alive we get a further reduction of another 1.6 million dollars. So what I'm saying is that the way things are going unless there is a miracle that budget is wrong now by 1.6 million dollars. Mr. Grassie: You will see that that is one of three major points that we're going to point out to you. That's right. We question the whole 2.6 million. Mayor Ferre: Not only does this thing have absolutely no money for an increase to employees it doesn't, you're counting on something, that's just Disney World, it's a dream world. The fact is that if the Senate Bill passes you've got to reduce that by another million six. Mrs. Gordon: And if it doesn't pass then you have to reduce it still further. Mayor Ferre; If it doesn't pass then you've got to reduce it 2,7 million dollars, 11 SEP 131978 Mrs. Gordon: 8o you're damned if you do and damned if you don't but I'm wondering whether it wouldn't be better to have started on the lower scale and not have to face the further problem. Mr. Grassie: Well, that is probably the single major question that we're going to have to talk about is how we treat that and I pointed out: 1 think very clearly, it's in the First page and in the summary. That is the major policy thing that we have to talk about is how we treat those uncertainties. Mayor Ferre: Well, I just want to point out to the Commission that we're not only talking about the fact that this proposed budget has no increase for employees it also is counting money that just isn't there. Now to what extent, whether it is 1.6 or 2.7 we don't know. Mr. Grassie: You add to the uncertainty, I think we have to recognize that there has been some talk on the bill of a different but substitute bill which would about January of next year provide this kind of money although it would not be a continuation of Countercyclical. Mayor Ferre: But that's talk. Mr. Grassie: But that's talk. It's just one of the uncertainties.' Rev. Gibson: Let me ask this question: As you made up this budget did you tell the employees that? Mr. Grassie: Well, in the way that we are telling you and everybody in the world, yes, we tell them very clearly that there is no money in here for the negotiations and in addition to that we are faced with the uncertainty of at least 2.6 million dollars with regard to counter - cyclical. Rev. Gibson: Ok, let me put it the other way. Mr. Grassie: We have another problem, the third problem that we're going to get to talk about and that's CETA. Mrs. Gordon: Yes. Rev. Gibson: If you are talking with these people, have you taken time out to explain to them as you have explained to us and you know, at least I could add and I know you can't take out of the bucket what isn't in it. Did you specifically very simply go through the process with them as you're going through it with us? You see, Mr. Mayor, my problem is all of those people coming up there raising hell and rightly so and that's why we're there. They'll raise that. But a part of that anger would be reduced if you took time out, and you know we could take the attitude of "Well, it's none of your damned business". Wait a minute, I didn't say you said that but what I want to do is warn you not to do it. Okay? Because if they are reasonable people, and I have seen Dr. Barry around here, you know, that's what they pay him for and I think we - Have you made this available to him? Mr. Grassie: Oh yes. Rev. Gibson: I just want to make sure because you know I will ask him out there. Mr. grassie: They were the first ones to pick up copies of the budget. UNINTELLIGLE Rev. Gibson: No, I want the Commission to listen to this. I didn't ask if they picked up copies. Did you explain this to them? Now you see you know I had this business on my desk, how many days now? Mr. Grassie: About two weeks. Rev. Gibson: About two weeks. All I'm saying to you is I didn't pick that up. 12 SEP 1319" 1 s • • Mr. Grassie: All right, well, it is a good point. Maybe to should assume that they have not picked it up either and.... Mr. Gary: Mr. Grassie, I would like to add that I've had a talk with Barry and Jessup over the .last two weeks. Mayor Ferre: And who? Mr. Gary: Jessup, his partner. And they're in the office right now going through the detail records as well as I've sat down with them I guess about three or four hours over a two week period and explained to them just what you were asking about. Mayor Ferre: Well, it isn't Dr. Barry and Jessup that I'm worried about I'm worried about Don March and Powell and Smith. Mr. Grassie: Yes, we probably ought to do it with the presidents of the unions too. Rev. Gibson: Right. Mr. Gary: Ok, in terms of state funds we're going to lose almost a million dollars. The majority of that, $500,000 is attributable to a loss in the Cigarette Sales Tax. Mayor Ferre: That was the Supreme Court decision? Mr. Gary: No, that was, you're talking about Dade County Metro Court, INAUDIBLE Mr. Grassie: The Cigarette Tax is mostly smuggling out of Georgia. Mrs. Gordon: That's also because the H.S.A. is fighting the smoking habit that a lot of people have. Mayor Ferre: I quit every other month. Mr. Gary: The state said that the cigarette consumption has gone up. Mrs. Gordon: Oh, it has? Mr. Grassie: Consumption has gone up but the revenue to the state has gone down. Mr. Gary: The Metro court, we'll lose 1.2 as a result of the Supreme Court decision that Dade County could not increase the court fees. They wanted to increase the court fees from $26 to a minimum of $57 and the Supreme Court rolled that back. The carry-over Fund Balance, as a result of revenue short -falls this year we will have less in terms of Fund Balance next year. In terms of salary savings, we started this ficticious revenue I guess around 75, 76 with 2.5 million dollars and the policy has been to reduce this each year in intervals of $500,000 so this complies with that policy. In terms of the pension, we're going to lose $500,000. Now that is not an actual loss, in your manual we stated to you some of the changes in this budget as opposed to previous years' budget and most of it is attributable to the State Uniform Accounting System that the state mandated. And as a result, these contributions from others mainly Dade County and Off -Street Parking will now be put in a Trust and Agency Fund, it will no longer be put in the General Fund. So this will not be coming into the General Fund but directing it to the Pension Fund. IIMr. Grassie: In other words we don't lose the amount but it doesn't 11 end up in the General Fund. Mr. Gary: In with the revenues and expenditures in the Trust and ilAgency. Other revenues, approximately $300,000, that's mainly attri- 11 butable to the Street Lighting Fund. This year we used $241,000 of Street Lighting Funds to pay for some expenses that were not included in that budget as adopted namely the University of Chicago contract for Fire Medical Exams. This year we don't have any money from the Street Lighting Fund so that's a loss right there. So our total overall decrease is 8.2 and comparing that to the 7.5 million increase m 13 SEP 131978 We have approximately a $700,000 decrease. This 7 here coincides With this $741,000, we just rounded it. Okay? Now changes in the General Fund appropriation, it was very difficult for us to reduce the budget and to achieve our reduction in view of the fact that we had $700,000 less to deal with. The department has achieved this by abolishing 84 positions from the current table of organization and this generated approximately $1,000,000 plus the increase of non- payroll items of approximately 300, therefore, we have the reduction of $700,000. Mr. Grassie: On that I think it is interesting for us to comment at this point of what has happened to departments because you see at this point they're cutting positions and still they're operating - supplies and the things they buy are going up by $300,000. What happened was that last year when we had the squeeze on the budget what they did was they cut out all of their operating supplies and their capital money hoping to get by for a year. You know you don't buy the typewriters, you know you don't buy the asphalt and the things that you need. Now they're starting to realize that they can't live very long that way, that you can do that for a short period of time but, in fact, they can't operate that way. Now they're starting to have to cut positions and they're spending more for their supplies and their equipment and so on. Mr. Gary: Now the budget to accomplish this, well, the consequence of this is that we're going to have fewer than 10 lay-offs. Mr. Grassie: And we need to talk about that too because administratively we have had a virtual freeze on hiring now for several months which has created the vacancies necessary so that departments could eliminate vacancies without laying off people and we're down to a point where we have relatively few positions that would still be affected by a lay- off and by October 1 when the new budget goes into effect it will be even less than that. Mayor Ferre: Mr. Grassie: pretty close. So you're doing it by attrition. Yes, cutting as close as we can, you know we're cutting Mr. Gary: Also, the effect of the ten lay-offs because of the CETA policy that if you're going to lay-off in the General Fund position all like positions in CETA must also follow, it would be an effect of 30 positions in CETA, as Mr. Grassie said, as those reductions occur. Now as Mr. Grassie said earlier we have some outstanding issues as it relates to this budget. The first is that we do not have included in this budget any provisions for union increases. Secondly, the uncertainty about Countercyclical Revenue Sharing, what's going to be the fate of that - whether we lose an additional 1.7 or we lose the total 2.6. The next thing is the uncertainty about the CETA, and I'm browsing through this and Mr. Grassie can give you further explanation but the CETA question is, we haven't talked about it as of yet, but Congress is discussing or considering reducing the program by one billion dollars which means that that would have to be absorbed by all the jurisdictions within the country which means you have less positions. In addition to that they are talking about how much a city or a juris- diction can supplement CETA positions. The house is talking about a $2,000 ceiling with an additional $2,000 for those high wage areas. The Senate is talking about no supplement at all and that may be damag- ing to departments if we first of all reduce positions and off -hand we cannot supplement positions. Mayor Ferre: How many CETA positions does the City have right now? Mr. Grassie: General Fund by departments, working in departments? Mayor Ferre: Yes. These are not in programs you know outside but in the City of Miami. Mr. Grassie: 1,100, of course, that fluctuates, it is always up and down. Mayor Ferre: And what is the average of what those 1,100 people make? 14 SEP 131978 UNIDENTIFIED SPEAKER: $9 , 200 . Mayor Ferre: Ok, so if we go to an $8,000 we'll be all right provided there is a two thousand something acceptable except in some cases where we'll be hurt. Mr. Grassie: No, we won't be all right, it will mean that more than 50% of the people will be ineligible..., Mayor Ferre: Tell me how, if your average is $9,900 and it would be at 8,000 as I understand it plus a 2,000 supplement. Isn't that what they said? mow Mr. Grassie: About 50% of your positions will be ineligible, you know, about half. Mrs. Gordon: You mean the ten can be dropped down to eight? Mr. Grassie: Well, that's one possibility that the Mayor is postu- lating. Mayor Ferre: Well, Congress is talking about it, all the things they're talking about.... Mr. Grassie: But that's the most extreme thing I think they're talk- ing about. Mayor Ferre: Yes, I think what the problem is is that there has been so much scandal and it's not only in Miami, and the Miami Herald has really been the leader in the nation in trying to in my opinion muck rake this thing way out of proportion because out of all the CETA programs there may be 10% and even John Baldwin admitted to me yester- day that he realized that it maybe was only 10-15% of the total but, of course, you know that's not what the Herald writes and that's not what Time Magazine picked up and that's not how these things are per- ceived a`nd tat affects congressmen in Nebraska and what have you as they look at these things. And then the Herald's stories have spread because it's only the Herald but it's in Atlanta and Washington, D. C., for example Sterling Tucker got himself caught in a mess because he had some supposed relatives or in-laws or somebody who was on the CETA positions and that kind of stuff is front page in the Washington newspapers and St. Louis and California and everywhere this is going on and that is affecting congress's attitude and one of the things tat they're doing is figuring ways to squeeze on this, to lower it and make it for the poverty sector. The problem is that if they squeeze enough there are going to be a lot of cities throughout the United States that are going to go bankrupt or not be able to render the services they've been rendering in past years. The City of Miami is not alone in this situation. ISWia Mrs. Gordon: Some of them are a lot worse. Hartford, Connecticut is one, it depends entirely on CETA - not entirely, but they utilized CETA a long time before we did in a manner that we were considering last year and didn't proceed with, they felt that an acceptable pro- cedure. Mayor Ferre: So there is a serious problem and I think it is import- ant for us to every time we run into Dante Fascell and Claude Pepper and Bill Lehman and others to impress upon them that CETA is not only something that takes care of poor people it also is keeping the City of Miami and other cities including Metropolitan Dade County alive. And if it weren't for CETA, if we didn't have CETA there would be 1,100 jobs we would have less.... Mr. Grassie: That we couldn't finance. Mayor Ferre: ... that we couldn't finance and our corresponding ser- vice to the community would have to be reduced by that,But where does the CETA Act, where is it now in congress? Mr. Grassie: It is still being debated. Mayor Ferre: Is it in Committee or has it passed the Senate? SEP 13 1978 UNIDENTIFIED SPEAKER: It has passed the Senate, it is going baoR to the house and will eventually end up in conference. Mayor Ferre: Before the October recess? UNIDENTIFIED SPEAKER: That's debatable, sir, it's debatable. may not make the October recess. Mayor Ferre: Fine. UNIDENTIFIED SPEAKER: Will there be a continuing resolution? UNIDENTIFIED SPEAKER: Yes, either a continuing resolution...possibly some time in January. That probably is owing to the fact that there are so many state and local elections this year and they want to get over the November hump. Mayor Ferre: Mr. Grassie: Mayor Ferre: Which means that we're playing with a time bomb here. That's why it's one of the major outstanding issues. And what are you assuming in this budget, Mr. Grassie? Mr. Grassie: We are assuming, as I say in my covering letter, we are assuming that we are going to have to modify this budget as we go along in the year and that's the basic policy question that we're were talking about a minute ago. In the case of CETA, for example, we probably won't know how it is going to impact us for three months and when we do know we will probably have six months of a sort of a phase -out. Mayor Ferre: Assuming it broke down. Mr. Grassie: No, assuming that the rules have changed they will probably give us about six months to get our employment pattern in compliance with the new rules. Mayor Ferre: They, the Department of Labor. Mr. Grassie: They, the Department of Labor. Mayor Ferre: Well, let me ask specifically this: Last year the CETA Program was $93,000,000, this year the proposal is $75,000,000. Right? Mr. Grassie: That's correct. Mayor Ferre: That's a decrease of almost $20,000,000 which is about 22%, 23% decrease. Now that's what they're projecting as of now, they're guessing - it might be higher, it might be lower. Now my question to you is did you project a 20% decrease or are you taking the CETA positions that are being removed from the program that are not ours. Is that why you have a freeze on some of these CETA posi- tions? Mr. Grassie: Just as we have a freeze on our own CETA positions... (interrupted). The assumption, this budget is not impacted by the CETA question except for the supplement that we have to provide so long as the CETA Program is in place. The way we are impacted.... Mayor Ferre: That's not my that the CETA Consortium is account in this budget, yes question. There is a 20%, 22% decrease looking at, have you taken that into or no? Mr. Grassie: We do not have to take it into account in this budget. Mayor Ferre: Why? Mr. Grassie: Because what we provide in this budget is the supple- ment to pay the extra for the CETA positions that we anticipate getting. Now, the positions that we anticipate getting are reduced. Mayor Ferre: Well, that's my question. Mr. Grassie: But that affects service, it does not affect this budget. Mayor Ferre: No, that's not so. If you have 1,100 CETA employees ��' SEP 131978 1111111111111111101111111111111111111111111111111 111111111111111111111111111111111111111111111111111111111 and you have to reduce 20% and you're knocking off 200 CETA employees and you're supplementing them that's going to affect your budget. Mr. Grassie: We are providing, maybe the answer that you're looking for is that we are providing supplements for fewer salaries in this budget. Mayor. Ferre: By 30? Mr. Grassie: By 30 what? Mayor Ferre: You said 30 CETA positions will be abolished, Mr. Grassie: Oh yes. Mayor. Ferre: 0r is it by more? Mr. Grassie: No, it's by much more than that. Mayor Ferre: Well, then that's my question. How much?; assumption here? Mr. Grassie: Well, I'd have to go through every budget and add. Mayor Ferre: Look, in the simplest terms when you say you've got three uncertainties in this budget represented, (1) What's going to come out of negotiations, (2) How about the Humphrey Bill, the Counter - cyclical stuff and (3) the uncertainty about CETA. I'm asking you about CETA. Mr. Grassie: Yes, but you have to understand that the uncertainty about CETA affects us this way - it does not affect us in the sense that the dropping of CETA causes any appropriated money to be lost. Mayor Ferre: But that's questionable, I don't see that. ... You have to fill in by putting in people that we've got to pay out of our own budget or are you saying that you are going to reduce services? Mr. Grassie: Well, that's how it affects us. You see, when the CETA Program drops out what it means in terms of this appropriated budget is that you're going to end up with a little money that you don't hive to spend because you don't have to spend the supplement for the person you don't have. However, you also lose the person so at that point if you lose 40 people or 80 people out of your Park Program then you have to come back to your budget and say, "Can I afford to have a Park Department without these 80 people and if I can't then I've got to take money from some place else and put it in Parks. Mayor Ferre: 0r turn Parks over to Metropolitan Dade County. Mr. Grassie: That's the way it is going to affect us. Mayor Ferre: Well, I think we have to face reality where we may be heading and talk about these things because these are alternatives that we've got to be aware of. I mean you know the City of Miami is at a very critical point and I think that we as elected members of this Commission have got to understand where we're at. Rev. Gibson: Let me ask, in turning over to Metropolitan Dade County, aren't they similarly situated? Mayor Ferre: Yes. Mr. Grassie: In my opinion they are. Mayor Ferre: They can't turn it over to us but we can turn it over to them. Rev. Gibson: Let me raise it this way: Homestead says, well, we want to get rid of our Fire Department, Metropolitan Dade County has made its budget and made no allowance for it and so then what happens? Mr. Grassie: They didn't take it just as they have not taken the Beach's Fire Department. • Rev. Gibson: igeii then..:. Mayor Ferre: That's not a solution if they don't a.fteit it, obviously unless we just decide to unincorporate. Mat? They did take the Homestead Fire Department? Mr. Grassie: But they haven't taken the Beach Fire Department have they? UNIDENTIFIED SPEAKER: No, sit. Rev. Gibson: But they said... Okay, he said they took it.... Mayor Ferre: Well yes, what he said is that Metro took Homestead but they didn't take the Beach Fire Department. Of course, what happens is that they like to take things with corresponding moneys like you know they wanted to take over our Library System or the Water and Sewer Board because they make money on that but you try to give them something that doesn't make any money. Rev. Gibson: But 1 thought they said in Homestead that they did not have the money appropriated. That's what the news said. Mayor Ferre: That Homestead didn't or the County didn't? Rev. Gibson: That the County did not have the money available to take over the Homestead Fire Department. Mayor Ferre: But the County has a billion dollar budget and I think the Homestead Fire Department is a relatively small thing within a billion dollar budget, give or take 2 or $3,000,000. Rev. Gibson: Yes. Mayor Ferre: They'll find it. Mr. Grassie: But back to your principle policy question that we were talking about, the choice that we have is between proposing to you a budget which would cut hundreds of people now not knowing what the problem was going to be and proposing a budget which is inbalanced recognizing the uncertainties that we have to face. Now each one of these has to be faced up to. The CETA question may affect us 9 or 10 months from now because of the lag that we talked about. The Countercyclical question we were just talking about when that is likely to get resolved, may affect us in November or December, three or four months from now. The union negotiating question could affect us in three weeks, a month, you know depending on how quickly those three processes take place. So what I'm saying is (1) we don't have certainty about any one of these problems, (2) They're spaced out in your next budget year and the only intelligent course of action that we can see is that we've got to deal with each one of those as they come up and we should not penalize people in the short run because of what might happen to us. Mayor Ferre: Or might not happen. Mr. Grassie: And may not happen. Now that's the basic choice that we had to make. Mayor Ferre: Mr. Grassie, let me ask you this question just so that we know the extent of pendulum's swing on all this. How much were the negotiated employee or the total employee increases in the last budget? Mr. Grassie: Well, you can use the round figure of $2,000,000 assum- ing that everybody was about equally treated and so on. Mayor Ferre: Now how much.... Mr. Grassie: Countercyclical is 2.6 million. Mayor Ferre: Right, and CETA you say is a question of reducing ser- vices, Mr. Grassie: Yes, that's real tough but that could affect us for 2 or $3,000,000. 1LL99�'j SEP 1 3 1978 Mayor Ferre: So what we're talking about is passing a $115,000,000 budget of which 97 is the General Fund and which what we're talking about is from 4 to $6,000,000 that we don't know.... Mr. Grassie: Probably could impact us, that is correct. But we know that they're likely to be, some of them are going to be a prbb= lem. Rev. Gibson: (inaudible) $6,000,000. Mayor Ferre: You see, the difference is this, when Bob High was Mayor and when you were on the Zoning Board the City of Miami was pretty self-sufficient in that it depended pretty much on ad valorem taxes but the City of Miami's budget when I first came to the City... Mrs. Gordon: (inaudible) Mayor Ferre: Yes, but the City of Miami's budget, Rose, the first budget that I approved as a Commissioner in 1967 as you recall was 20 or $30,000,000. Now we're at $115,000,000. So when you're talking about $30,000,000 and you're talking about revenues coming in from your ad valorem taxes and that was 20 some odd million dollars and you get Cigarette Tax and you get this and that, there was no Revenue Sharing, there was relatively little federal money coming in but the City of Miami was a different kind of an entity. Now you're talking about a government that has over 4,000 employees, of which a thousand are CETA, $115,000,000 budget, we get $17,000,000 in debt repayment which we didn't have in those days and the fact is that if you look at where the money is going to come from the money is not going to come from ad valorem taxes because ad valorem taxes only makes up for about 307 of the total amount. So in effect if the City in 1978-79 were being run the way the City was being run in 1968 you would prob- ably have a budget of about 50 or $60,000,000 but it isn't. And the point is that we've now become dependent on federal and state revenues and before the tax assessor would send us an estimate and Mr. Reese would sit down and sit down with the department heads and say, alright, how much are we going to, you know who is going to spend what and you hammer that out, work out with the employee unions, etc. and we had certainty. Now we've got a situation where we don't have any certainty because only 30% of our total revenue comes from that certain source called ad valorem taxes. The rest of it comes from all different kinds of places. The fact that we could have a swing in business and com- mercial and Florida Power and Light of 4.8 million dollars is just something that we didn't count on. We weren't figuring that, it's just manna from heaven. If it weren't for that we'd be in serious trouble. So this is a precarious existence. Mr. Grassie: Yes, we have to keep trying to balance our bond fund programs, the things we can do that way, the things we can do with federal moneys and grant programs and try and stay afloat in terms of our flexible money which is the General Fund. INAUDIBLE Mayor Ferre: Now give us the good news. Mr. Grassie: What is the good news? Rev. Gibson: Is there any? Mr. Grassie: Well, the only good news I guess is that in the short run we may be able to get by without laying -off a lot of people, you know that's the good news and that was pretty hard to accomplish. Now that's short run good news but you know we've been working towards that by this modified freeze that I told you about so we really have some vacant positions for departments to work with. We have gone through the basic summary of the budget. It may be useful for you and I would like for you to tell me if you don't think that it helps you. It may be useful for us to simply go through the summary pages which start on page 11 of your book so that you can see what we are trying to present for you here. These summaries are basically designed to help you understand this 300 pages of stuff. Do you want to run through these summaries, Howard, and simply explain each one? 19 SEPI3197B Mr. Gary: Beginning on page 11 we have what we call the Revenue Summary and it really by major categories shows you the revenue sources as well as those revenues we are going to receive from those sources. As opposed to last year this year we are showing you the adopted figure for 77-78 as well as the amended figure and those amended figures represent those changes mainly that you have made dur- ing the course of the year. Then we have the proposed figure. Now the reason we show you the amended figure is because budgets change constantly. Whenever you adopt a budget the next day it will be out of date, if you pass an ordinance the next day to add money and increase expenditures. The comparison in this budget shows the real comparison in terms of what we actually are doing now or what is actually happen- ing now and what we are proposing for next year between the amended and the proposed. Mr. Grassie: Now if you will both chime in here as we go along, if you use those two last columns then I think that you will be able to pick out some of the things that we've been talking about that you may want to remind yourself of from time to time. For example,in the General Fund you see, we're on page 11, the last line tells you about anticipated Salary Savings to be earned, you can see that that goes from a million and a half down to a million. That's one of those things that we talked about. You can also see when you get down to the General Obligation Bonds that the ad valorem requirement goes from 11,700,000 to 17 1/2 million and that shows you what the size of our problem is. But you can also the Fund Balance, for the current year we appropriated over $3,000,000 from Fund Balance, this year we've got virtually nothing. That's where part of the problem is. Mr. Gary: In addition to showing you the General Fund and also the General Obligation Debt Service we also show you other funds that we have within the budget namely the Enterprise Fund, the Intragovernmental Service Fund, the Debt Service Fund other than General Obligation Debt Service, the Trust and Agency Fund. Now if you want to get an overview of the entire city you have to look at all of these funds but in terms of the tax rate there's really the General Fund and General Obligation Debt Service funds. So these are the revenue and the revenue sources on this page. Now if you turn to page 12 what this does is take that summary of revenue by sources and breaks it down to detail so you'll know where we're getting, you know we take a major category and break it down to detail. For example, if you look at the property taxes that's a major category as we have in the front but if you look at service charges we've broken down each individual source of revenues from the service charges, an example is the Police Department reports. You can see here if you look at the amended column as opposed to the estimated column you'll see that we are falling down in that area. That contributes to the reduction in revenues for service charges. I'd like to also if I may give you an example of what I showed you on the chart. If you go to page 13, the next page over you'll see Utility Service Tax about half way down the page, the lower half. You'll see that we had 12.7, approximately 12.8 in the budget for this year. On the chart I showed you that it had gone up about 4.4 million dollars and this way you'll see it right here, the detail. It has gone from 12.8 up to 17 million 2 approx- imately. So this is a detail of the revenue for the General Fund. Now if you go to page 15 we're now going into the Enterprise Fund. Mr. Grassie: Excuse me. But as you go along you see these pages give you an easy way to pet some of idea of where you money is coming from. You know that you re talking about a total budget of 115, or if you talk about including the Enterprise Fund, $118,000,000. You can easily see that your property tax is getting you about $39,000,000 total, that's all you get from the Real Estate Tax for the whole City. You can also see how important your federal funds are, they're in here for $10,000,000 but your business and commercial which includes the FP & L money, that's almost $27,000,000 and basically the franchise fee is the big thing in here. And your state funds are about $12,000,000. You're actually getting more from state funds than you are from federal funds as far as the General Fund is concerned. Mayor Ferre: Say that again? Mr. Grassie: You're actually getting more from state funds Mayor Ferre: Than we are from the federal. Mr. Grassie: Yes, in terms of the General Fund. 20 SIP 1 3 1978 Mayor Ferre: Yes, but, of course, the state funds a lot of them ccirie from the federal govenuuent themselves. Mr. Grassie: Well, these are basically state generated funds. Mayor Ferre: Yes. let me ask you this: Do you think that in item 6 here that the $10,000,000 we're getting from the federal government is our fair share of what the federal government has to give out? Mr. Grassie: Well, in terms of General Fund support the answer is probably yes. Keep in mind that this does not include federal moneys for CETA, it does not include federal moneys for CD. Mr. Fosmoen: Just as a comment, the major portion of that is in Federal Revenue Sharing, the State of Florida is in the bottom five of the states in terms of ics return of the Revenue Sharing because of our state tax effort. We're way down at the bottom state -wise in the num- ber of Federal Revenue Sharing dollars coning into the state. Mr. Grassie: That's getting into a pretty complex kind of question. You see.... Mayor Ferre: You're talking about the federal funding that comes from Washington to Florida is about the lowest in the nation proportionate because our tax number is very low, we don't tax our people enough - it's a formula. Mr. Grassie: The tax effort, Mr. Mayor, if you don't tax yourself the federal government says.... Mayor Ferre: 0r if you don't help yourself I'm not going to help you, if you want me to help you you go and help yourself. And since the state of Florida is about one of the lowest in taxation of its citizens, therefore, the formulat does not give the State of Florida much money. Now the only way to remedy that, of course, is to increase our taxes then we get into a California situation. Mr. Gary: Well, most people have state income taxes and they get more money but we don't have a state income tax. Mayor Ferre: That's where it's Mr. Grassie: But I just wanted to point out to you since you know there is a general feeling that there is a big dependence on the federal government for the General Fund I wanted to point out to you how you can check some of these things. Mayor Ferre: In other words the point you're making is that we actually get more from the state than we get from the federal government. Mr. Grassie: That's correct. Mayor Ferre: We get 10,000,000 from one and 12,000,000 from the other, from the state. Mr. Grassie: In the General Fund, that's correct. Mayor Ferre: Now my question to you is again are we getting in your opinion our fair share, is that $10,560,000 pretty representative of what we ought to be getting? Mr. Grassie: For what is eligible in the General Fund, yes. Mayor Ferre: Do we get an "A" in our grade, are we, you know put it to me in simple terms. Mr. Grassie: In most areas of federal grant getting we're doing reasonably well. I'd say that we'd get an 80 on the scale of 100. There are some areas particularly in economic development and some Public Works Grant areas where we're not doing very well. Mayor Ferre: But that doesn't come into the General Fund, I'm talking about the General Fund. 21 BEP 131978 Mr. Grassie: In the General Fund I think we're doing, we're at least at the 80% level. Mayor Ferre: In other words there's not much, were not leaving any dollars on the table up there. Mr. Grassie: $45,000 here Mayor Ferre: Mr. Grassie: We could get a few little categoricals here, you know and you know that kind of thing. Is Federal Revenue Sharing on a yes. Mayor Ferre: So there's not way or the other. formula basis? a damned thing we can do about it one Mr. Gary: (INAUDIBLE) Mayor Ferre: Ok, how about at the state level? Mr. Grassie: Well, there's relatively little we can do except apply for some of the special grants. Mayor Ferre: Are we getting our fair share, again hundred? Are you going to give us 80 on that one? Mr. Grassie: We are getting our fair share, we're our fair share in terms of the formula grants... Mayor Ferre: Of the State Revenue Sharing, I'm talking beyond that. Mr. Grassie: But we are not getting as much as we should in some of the parks, open space development grants from the state. Mayor Ferre: That again doesn't impact the General Fund. Mr. Grassie: That's correct, those are special project moneys. Mayor Ferre: I've got to interrupt for a minute, why don't you just keep on going and I'll be back in a while. Mr. Gary: If you'll turn to page 15, what we've done here is we're giving you a comparison of the revenues to expenditures for the Enter- prise Fund. Mr. Grassie: Excuse me, one other thing on page 14 just so we cover some of the things that you can get out of these kinds of summaries, if you look at items 10, 11 and 12 on page 14, that's at the bottom of the page I think again you can see how you can use these summaries. Item 10 tells you that your carry over balance from the General Fund is going down significantly. Item 11 tells you that you had a one time take-out from the Street Lighting Fund which you don't have and you can see... from zero to a getting absolutely Mayor Ferre: We also don't have increased street lighting. How much are we spending on street lighting? Mr. Grassie: No, that's not true. The Street Lighting Program is on schedule. Mayor Ferre: Well, you mean on a new schedule because we have reduced it several times. Is that right, Vince? Mr. Grimm: Yes. Mr. Grassie: But we are moving about as quickly as FP & L can build, they've got some problems in terms of construction. Mayor Ferre: What does that amount to, it is under a million dollars a year isn't it? Mr. Grimm: Oh sure, your Street Lighting Budget now is 3,1 and your completed program will probably be somewhat over 4. Mayor Ferre: So we're talking about an 8, 9 year program for street lighting. SEP 131978 22 Mt. Gritn : Yes. MY. Grassie: Do you think so, Aimee, nine yeah? Mr. Grimm: Not from now, from when you started, Mayor Ferre: Well what is it from now? Mr. Grassie: Well we're six years into a ten year program at least, six or seven years. We've got either three or four years to go to finish the whole city. Mr. Gary: This year for. the Enterprise Fund, page 15 shows you the Enterprise Fund Summary. It shows you by facility the revenues that will be generated by each facility, how much they're going to expand in the surplus and the debts for each Enterprise Fund. Now unlike lar,:t year we separated out each Enterprise Fund. Last year we had Stadiums and Marinas, we lumped all the stadiums together and all the marinas together. This year we've detailed out each facility so that we will be able to show you what revenues will be generated from each facility and how much is going to expand as well as a deficit. Now if you look at the bottom line you will see that the revenues for the Enterprise Fund will fall short of its anticipated expenditures by approximately $305,000. Comparing this to last year, last year we had $485,000 contributing to the Enterprise Fund, this year we reduced that by approximately $180,000 so the contingency of the Enterprise Funds on the General Fund contribution has gone down from last year this year and hopefully it will continue to go down. Mayor Ferre: Boy, that Marine Stadium is an expensive thing isn't it? I'm amazed that that's all we get in revenues, $55,000. Wow: Mr. Grassie: Not enough utilization. This whole business of utiliza- tion of our facilities ought to be a major emphasis for this coming year so that we try to get this fund in balance. Mr. Gary: Now if you look at the bottom of the page it shows you what capital improvements we have planned for the Enterprise Fund. For the Orange Bowl we plan to do approximately $100,000 worth of capital improvements, at the Dinner Key Marina $150,000. Mayor Ferre: Is that included in the total budget request? Mr. Gary: Yes, it is. Mayor Ferre: So when we look at the Orange Bowl and the million one forty-five, that includes $100,000 of capital improvements. Mr. Gary: Yes it does. Mayor Ferre: And the Dinner Key Marina? Mr. Gary: That's in accordance with the ordinance that was passed that we would use those funds for Capital Improvements. Now on the other side of the balance sheet if you turn to page 16, you know we've talked about the revenues, this shows the appropriation by fund and by department. You will see in the General Fund we have all the depart- ments listed, we show the adopted and amended and the requested then we also show the General Obligation Bond. These are the appropriations that balance the other side of the revenues then we show the Enter- prise Fund then we come up with a total. And one thing you should note, at the bottom you will see what I just mentioned to you earlier that last year we contributed 485,000 to the Enterprise Fund to make up that deficit, this year it is only $305,000 and the bottom line ties to what we had with our revenues so we do have a balanced budget. Mayor Ferre: You know, it used to be, explain to me how the police goes up by $6,000,000. It used to be, I used to use a rule of thumb that the police would cost us $25,000,000 and the fire was 15 and I kind of added that.... Mr. Grassie: You were right but your figures did not include pensions which were always budgeted in a separate account. Mayor Ferre: So what are you saying, that the Pension Fund in police is significantly more than the fire? 23 Mr. Grassie: No, no, what we are saying is that for the first time because of the change in the state accounting procedure that instead of budgeting these costs for pension separately some place else in the budget they are no reflected in the department and that is the major reason, the single most important reason for the Police Depart- ment going from $22,000,000 to $29,000,000. Mr. Gary: May I continue with this, because it may help you to under- stand the budget? If you have a question like that what I would sug- gest that you do is go to the detail and let's take Police for example. If you'll go to page 87 in your budgets and if you look at the budget highlights and you look at the second asterisk it says that because of reallocations of appropriations the Police Department's budget has increased by $7,000,000. That's mainly due to pension that we prev- iously had budgeted in some other department that's now budgeted there. In reality the Police Department decreased if you compare apples and apples last year to this year by $418,000 so there's not a real increase. Mrs. Gordon: That's in all departments now across the board. Mayor Ferre: Sure. Mr. Gary: It's across the board. So if you look, you know that's what we were going to use, we look at the inccrease and you want to know why, you go right to each individual department budget and it will tell you what the real increase or decrease is comparing apples to apples as well as what that increase is attributable to. In most cases because of pension you know we've now put certain things in Salaries and Wages that weren't in Salaries and Wages before, certain things in Special Programs and Accounts that are now departmental budgets. We're really putting costs where they're being incurred. Mrs. Gordon: I'm looking at the deficit that we incur in the Marine Stadium, it's kind of sickening - a quarter of a million dollars. Mr. Grassie: Yes, we absolutely have to work on the program of that facility and get more utilization, more paid utilization. Mayor Ferre: Plummer has been talking about that for the last four years. Mr. Grassie: We get a lot of free utilization of it. Mrs. Gordon: Yes, but I mean we can't afford anymore of it. Mayor Ferre: Suppose we assume that posture that in the future you know I'm sorry for the Spark Plug Race and all of that. Mr. Grassie: The Spark Plug pays for itself, it happens to be one that does. Mrs. Gordon: Which are the operations that we have that causes this kind of deficit to come about, and is there a situation where Dade County should become a contributor to that facility by way of dollars for public use? Mr. Grassie: The only way that I could see that they would do that is if you turn it over to them. Mrs. Gordon: No, I don't mean that. I mean it is servicing people of every part including and yet we're picking up the entire deficit. Mr. Grassie: If the thing is made to pay for itself, that is if we do not give free services but make people who use it pay for it then the people who use it, of course, will pay the costs irregardless of where they are from. Mrs. Gordon: We have to take a hard line on that then, Mayor Ferre: Can that happen..., Mr, Grassie: Over a period of a couple of years, 24 SEP 131978 • Mayor Ferre: See, tray question is this: We're losing a quarter of a million dollars which is a lot of money especially for the City at this juncture. Now we're subsidizing all kinds of regattas and races and all that kind of stuff. If you actually said, "All right, Rowing Regatta you're going to have to pay your fair share, that's $3,000", would that just kill it? Mr. Grassie: Yes, it would put them out of business as far as that example is concerned. Mayor Ferre: So in other words so we wouldn't have race so they end result is less utilization.... Mr. Grassie: The only way you get around that is to promote commercial utilization. In other words put in rock shows and stuff that pays. Mayor Ferre: Well, didn't you actually hire a guy to do that speci- fically, wasn't that the guy? Mr. Grassie: Yes, and he turned out to be no good for us. Mayor Ferre: He was a real turkey wasn't he? And then what? Mr. Grassie: We are now on a different tack which I'm just getting started, I'm talking to five people, leaders in the industry, in the entertainment industry and promotion industry to see if they will get involved with the City to help us at least on an advisory basis. We're going to look at each one of the facilities. Mayor Ferre: But your argument is true of all facilities, the Orange Bowl is greatly under -used. Mr. Grassie: I'm not talking about just this one, I'm talking about all of them. Mayor Ferre: And isn't that true of the baseball stadium? Mr. Grassie: Well, less of the stadium because we have been working on the stadium more. We have gotten the stadium to the position where you know it is a little healthier. It's still not.... Mayor Ferre: ....position but is it really paying us what we ought to be getting out of the facility? We're talking about a $40,000,000 facility.... Mrs. Gordon: ..offset some other deficits, it ... But I would personally address myself to the two greatest loss facilities and see how we can make them pay for themselves and that I think is the Municipal Auditorium and the stadium. Mr. Grassie: Well Municipal Auditorium is strictly a question of you know we just give it away - we never charge anybody, everybody uses it free. Mrs. Gordon: That's very nice but you know how long can you continue to do that? Mayor Ferre: Yes, but see, the next question, Rose, is this: Will the German American Club, most of the people who come to it live in Hollywood, Dania and Hialeah, really will they come back next year if you tell them, "Ok, you can't have it free this year you're going to have to pay us a thousand dollars?" Mrs. Gordon: Then we have to say what our alternatives are. Are we going to be able to raise it by making this facility pay for itself or are we going to have to find another taxing source from our own residents? Mayor Ferre: One thing is for sure is that the citizens of Miami cannot afford to pay for the Letter Carriers and the German American and the Puerto Rican Democratic Club to have their dances there. Mr. Grassie; Well, that's the situation we have. 25 SEP 131918 Mayor Terre: Well, has somebody looked unto it? What would happen if we just said.... Mr. Grassie: Yes, we've looked into it but the answer is.... Mayor Ferre: What do we charge these people? Mr. Grassie: In most cases we charge them nothing except out direct, so-called direct extra costs. That is if we have to bring somebody in overtime to provide them service we charge them for that but that's all. Mrs. Gordon: See, it's difficult to change doing things for somebody, we're giving them something and then you take it away. They think you're cheating them but on the otherhand we, I feel that we have hit the wall and have to bite the bullet. We just have to do it. Mr. Grassie: If you would entertain a policy of minimum charges to which make no exceptions - I mean no exceptions - because if you make one you're in big trouble. Mrs. Gordon: You're dead. Mayor Ferre: Yes, because then they'll say, "You've favoring the Puerto Ricans and you won't do the same thing for the German -Americans or you're doing it for the Letter Carriers." Mrs. Gordon: You've got to go across the board. Mr. Grassie: And I would suggest that if we're going to do it that we start with a reasonable, not a high, you know and it's not going to pay all our costs the first year but start with a reasonable, but apply it to everybody. Mayor Ferre: Do the Firefighters hold their annual ball there, this year? Did you do it last year? Just out of memory, do you recall whether you paid, did you pay at all for the hall? Mrs. Gordon: Did they charge an admission to that? UNIDENTIFIED SPEAKER: No, just for the use of the band. Mayor Ferre: Just for the band? You charged admission to pay the band. UNIDENTIFIED SPEAKER: Right, but our's is a little bit different situation. The City of Miami uses our facilities quite often for sewering programs and things that they utilize for the City which we have no problem with. Mr. Grassie: There's no reason why we shouldn't pay if we use them, if we use somebody's facilities we ought to pay too. UNIDENTIFIED SPEAKER: So it was kind of a, you know that was the kind of agreement. I have no problem with what you're saying. Mayor Ferre: In other words if we use the facility we ought to pay for it. Mr. Grassie: Whose ever it is. Mrs. Gordon: Some of the organizations I believe do charge admission and make it as a fund raiser, at the same time... Mr. Grassie: Yes, the F.O.P. Lodge rents out its place. Mayor Ferre: Well, the F.O.P. doesn't use our... UNIDENTIFIED SPEAKER: We haven't made any profits on that at all... Mrs. Gordon: Well aren't talking about, Don, your organization partic- ularly we're talking of an overall concept. Mayor Ferre: Yes, but I think we may have to think about how we treat our own City... 26 SEP 131978 ■ • Mrs, Cordon: `ie11 we should consider our own people as being something special, as part of our family. No really, that is the only... Mr. Grassie: That's the first exception. Mrs. Gordon: It may be an exception but it's not, it is an accomoda- Lion of people who are slaving and laboring for us, the City. We're talking about other non-profit agencies wham utilize this as a fund raising mechanism for whatever -• they're worthwhile charities I'm sure, all of them are. Mr. Grassie: Muscular Distrophy. Mrs. Gordon: I'm saying they all are worthwhile charities but I think you know. Mayor Ferre: See, but the question is if they don't, you know the O.D.P., the Puerto Rican Organization, if they don't go use the auditor- ium where are they going to go? They're not going to go to DuPont Plaza because Skippy Sheppard isn't going to give it to them for free. Mrs. Gordon: Nobody is going to give anything for free. Mr. Grassie: They don't get telephone service free, you know nobody gives them their envelopes free. Mayor Ferre: Well, I think you ought to kind of have somebody look at it and see, and go back over the last year and see if we made a unit rule for everybody without any exceptions and charge a reasonable fee as compared to the private sector what we would have and (2) you may as well pull off to the side the City of Miami organizations whether it be Firefighters, Police and other City oriented. Mrs. Gordon: City functions or City personnel functions. Mayor Ferre: It may not amount to that much. Mr. Grassie: But you know what happens then is the pressures on you, for the City to sponsor something because when the City in name spon- sors something they get free rent. The best example of this is what happened to us at the Marine Stadium, you remember, with Dade County Teachers or Teamsters or somebody, you know the affair that we had. They got us to sponsor it and they got everything free. Now that's what's going to happen to you. What I'm saying is if you're going to apply the rule across the board.... Mayor Ferre: Well, Ok, .... Mrs. Gordon: Give it to us on paper and let us understand it. Mayor Ferre: The point is that it is costing us a half a million dollars and I guess the message that you're getting from this Commis- sion as I understand it, Father we haven't heard from you, is that's all very nice but we can't afford it anymore. Mrs. Gordon: Yes.. Mayor Ferre: Do you agree? Rev. Gibson: Sure. Mayor Ferre: So why don't you put it down and see what we can do on that. And understand that you're not going to solve it in one year. Mr. Grassie: No, I think that we ought to, if we go this direction, we ought to do it in increments, in small steps. Mrs. Gordon: Yes, it won't hurt so bad. Mayor Ferre: Okay. Mr. Gary: Okay, if you turn to page 18 what we've done here is show you the appropriation by major categories to show you how much we in the General Fund are appropriating for personal services, operating expenses, capital outlay, debt service, etc. This is in compliance 27 SEP 131978 with,.., Mr. Grassie: Excuse me, have you jtu ied over page 16 and 17? tJe11, 1 guess that the point that we ouht to make here is again you know how do you get an overall picture of what is going on. In the General Fund you've got the 97 million that we talked about. You also have the 17 million in General Obligation Bonds, that gives you that total appropriation of about 115 million that we've been t,aLkfng about. Now when you con- tinue down that last column you can see that the Enterprise Funds, that's what we've been talking about most recently, add another almost $4,000,000 so you're up to 118 1/2 for your total overall. Mrs. Gordon: Is there any economy that could be put on those same Enterprise facilities? Is there any way we could cut down the expenses of operation? Mr. Grassie: Yes, we have considerably and that's why we've picked up - although their costs are going up - we have reduced the subsidy on them by $180,000. Mrs. Gordon: I'm talking about particularly like for instance the Marine Stadium has 318,000 budgeted to it. Is there any way that could be reduced somewhat? ...smiling because I don't know whether that means you can or you can't. Mr. Gary: No, the reason I'm saying that is because he cut them so badly during the budget they probably think they're at the bones now. Mr. Grassie: But I think that the answer to your question is going to need to be yes that they're going to have to be cut more because I don't think that we're going to get them to balance if we don't cut them more but I don't want to cut them to the point where they can't generate any revenue. Mrs. Gordon: Ok. Mayor Ferre: But let me ask you a question on page 16. Now we know that there are a whole bunch of CETA positions in Parks and I look at the Parks budget and it says 4,230,166 and then I flip over to page 111 to Parks and I see how that's broken down you know in the follow- ing pages. That doesn't take into account the CETA positions. Mr. Grassie: That is correct. Mayor Ferre: So in other words when I look at Al Howard, or whoever is doing that, it isn't 4,231,000, it is 4,231,000 plus a lot of other things that are not, is there anyplace where we can see that here? 'Ir. Grassie: Yes, not in dollars but in amounts on page 112. Is that where you're looking? Mayor Ferre: But you see 112 doesn't really tell me that because all 112 tells me is.... Mr. Grassie: I say not in dollars but in positions. Mayor Ferre: All 112 tells me is that out of 267 positions 104 of them are CETA. Mr. Grassie: That's correct. Mayor Ferre: You know when I say we've got a $4,000,000 Parks system it isn't a $4,000,000 Parks system it is probably a 5 1/2 or $6,000,000 Parks system. Mr. Grassie: Sure, if you put $10,000, for example, on each one of those hundred CETA positions. Mr. Grassie: Of course. Mr. Gary: This only includes the supplement, it doesn't include the amount that CETA contributes. Mayor Ferre: If we get some federal funding for the Parks which we don't have I guess that doesn't go into the general revenue, that would go into capital. 28 SEP 131978 Mr. Gary: It all depends. Mr. Grassie: Well, if you're talking about federal funding £or a capital improvement it would not go into the .... Mayor Ferre: Well, let's take the Police Department which is easier, All right, we get LEAA funding. Okay? Now you say here that the Police budget is 28,959,000. Mr. Grassie: Un huh. Mayor Ferre: Does that include all the stuff we're getting from LEAA and the federal? Mr. Gary: No. Mayor Ferre: So it isn't $28,000,000, I mean it's not $28,900,000 because you've got to take the pension out of that first of all as far as the operating expense but what are the other, do we have any- where in this budget - this is a recurring question that I have every year as to what other sources are available to that particular depart- ment that are being utilized to the benefit of that department - state, federal, LEAA Grants? Mr. Grassie; Well, in the case of LEAA you can turn to page 23 and each one of those programs is listed: the U.S. Department of Justice is listed in the middle of the page there. Mayor Ferre: Yes, but see what this is is this is a total grant sum- mary. Mr. Grassie: Yes. Mayor Ferre: I'm not asking you about you know, I'm very happy that you have the grant summaries outlined here - that's wonderful and that you've got them detailed. That's not my question. Mr. Grassie: Do you want them gathered by operating department? Mayor Ferre: Yes. Mr. Grassie: So that we have grants, CETA and General Fund grants. Mayor Ferre: Yes, well I'm looking at that Police Chief and asking him a question, I know that he has a total budget, you know. Now in the Downtown Development Authority we got into this kind of a problem last year. Mr. Grassie: Uh huh. Mayor Ferre: And Mel Jacobs and Hood Bassett and all those people said wait a moment, you know we're responsible - this Commission, this authority is responsible for the whole development and don't come telling me you've got one budget for us and one budget for what you're really working with and what I'm saying is that I understand that the Police Department, we're working with this budget but I'd like to know somewhere along the line what is that Police Chief really working with. He's working with this plus this plus and I need to know what it is. Mr. Grassie: So what we're talking about not a fund breakdown which is the kind of breakdown we have to have by state law for the budget. But what you're looking for is a different kind of report which we can provide for you which takes it by department and takes all of the different funds and joins them by department. Mayor Ferre: The fact is that Kenny Harms isn't working with $28,000,000 he's working with $28,000,000 less the pension plus all this other stuff that he gets from all over. Now you say, "Well, that isn't fair because those are all ear -marked moneys for special projects". Mrs. Gordon: Most budgets are set up that way, you take everything that comes in - I know, but most - and then you say well ok, every- thing came in and everything is going out. 29 SEP 131978 Mr. Grassie: Well, two things: (1) We should understand that We don't have any discretion about reporting financially to you this way, you know we have to do it this way. What you're ask- ing for is a different kind of a report which we'd be happy to prepare for you which we can do - it won't be your bduget, we won't prepare the budget that way but it will be a separate financial report to you which takes every department and gathers all of these different fund moneys. Mrs. Gordon: Well isn't that a procedure you generally follow? Aren't you supposed to do that? Rev. Gibson: Well, can't you do this.... Mr. Grassie: Well, we know it. Mrs. Gordon: We know what they're receiving? Mayor Ferre: They know it, we don't know it. Mr. Grassie: It's just for budget purposes you can't present it that way. Mrs. Gordon: Why not? Mr. Grassie: Because the state mandates a - get into.... Mrs. Gordon: It's not discretionary, anything else. Mr. Grassie: ... technical.... Mrs. Gordon: But technically they're City. being brought into the Mr. Grassie: The state mandates that we report our budget to you and everybody based on a fund structure. We have to divide it up by funds. The funds have legal definition to them and you know we have to prepare the budget on that basis. Now what you're asking for is a different cut. What you're saying is that's fine but let's take a different cut at this, let's look at it a different way which we can do. We'll bring that to you. Rev. Gibson: But what you're telling me in this budget right now as I'm looking, Police Department costs me out of your pocket $25,000,000, additionally from the federal government $15,000,000, total $40,000,000. Mayor Ferre: Well see, they have it here the problem is that for us to get it you've got .... and then you've got to add it and you know. Mr. Grassie: What you want is that tabulated and we can do that. Rev. Gibson: Right. And what I'm saying is don't give it to me tomorrow, put it right there. You know one of the easiest ways to hide it is write it so you know if I have to go to ten different places to look for it you know what I mean. So as soon as you tell me that you know, you put up there additionally and since this is only coming to us you put it in our book and after we're through we'll take it out and you know. In other words you could do this right now this is the state requirement, additionally you could add that page for us. That's what the Mayor is saying. Then we get a comprehensive concept. That's what we're saying. Mr. Grassie: No problem producing that sort of thing. Mayor Ferre: Let me editorialize for a couple of minutes here and tell you another point that I think is important as to where we're at. The reason why some people want consolidation so bad, and I think it is something that we have to understand, is it isn't the ad valorem taxes of which we get $38,000,000 as I recall. 30 SEP 131978 Mr, Gary: $30,000,000. Mayor Terre: Yes. It's the other stuff, it's the $26,000,000 that we get from Utility Service Tax and business and commercial. It's all these goodies that we're getting, it's the 10,000,000 we're getting from the feds, it's the 12,000,000 we're getting from the state and if you divide that into portions to the number of people that we have, we have 350,000 roughly people to serve, if we went into consolidation and that were distributed and it went into the total the people of Miami_ would really get shortchanged. Mrs. Gordon: There's some question as to whether all of those would be transferred to a larger unit of government. Mayor Ferre: Well, let's just assume that the feds would give Metro the $10,000,000 and that the state would give them the $12,000,000 and you know. But whether or not you're right, for example, cigar- ette taxes and some of these other things that may not be transferr- able but you know the City of Miami is getting in proportion to where our ad valorem taxes are and an awful lot of goodies that Metro really covets, you know they really want. And if you look at their budget their total budget is a billion, what? Mr. Grassie: Just a billion. Mayor Ferre: But out of that you've got Jackson Memorial Hospital? • Mr. Grassie: Yes. Mayor Ferre: See, and that's not apples and apples so you've got strip Jackson Memorial out of that, that's $400,000,000, right? That includes .... to Mr. Fosmoen: ....includes the contractual cost of Jackson. Mayor Ferre: Just the deficit, not the total budget. Mr. Fosmoen: I think it is the contractual cost for indigent services. Mayor Ferre: And the same thing with the airport and all that. But if you start subtracting all those things on apples to apples you know, and someday I'd like to - I know this is not the time, Howard, and I'm not saying that you've got to do it now but sometime in the beginning of next year before you get into the heavy budgetary process for the next year that I'd really like to take the Metro budget and the City budget and kind of put them next to each other and compare and I think the message has not really gotten across clearly to a lot of people that if the City were consolidated with Metro that the people who live within the boundaries of the City of Miami would really be giving up something. It's not only that they won't get the same police service and the same fire service unless a taxing district is set up, it's that all these goodies that amount to 80 or $90,000,000 that we're getting like right here from the Department of Housing we're getting $28,000,000. Would we really get that? And they say, well Metro would give it to us. Well it wouldn't you know. Rev. Gibson: Let me ask a question. I see on page 16 you have on there Board of Commissioners ....request from 1.54 to .... Does that take into account since you writing this budget and we're adopting it, I know budgets change just like you said change from day to day, are you taking into account the possibility that you may need more money? Mr. Grassie: No, we have not provided for that. That is one of those uncertainties that we'll simply have to adjust. That I think is going to be easier to adjust than some of the other ones that we have but we have not provided for it to answer your question. Rev. Gibson: Well, if we are talking about budget why aren't we raising and why aren't we making provisions? I was always told when you made a budget and you know that this is a possibility you put it there. 31 SEP 131979 Mr. Grassie: if you have enough money to afford that luxury youdo but you see the only way we can provide money for four more commis' sioners if they appear on the scene would be to cut that money from somebody who is now using it so that means we would have to cut the known need in order to provide for a possible need which doesn't seem to make sense. Now we may be in that position some time but we should only do it when we know we have to do it. Rev. Gibson: Yes, but i hope the rest of the Commissioners understand how I react and feel because I need, if I need a hundred thousand dollars now I know that's a possibility. I hear what you're saying and I follow that but why am I not raising it now so that you perceive forthwith to tell me where that money is coming from rather than sur- prise later on? Mr. Grassie: Well., I guess it is so relatively on the scale of the other problems that we have, it is much more manageable because these problems are million dollar problems. The problem that we're talking about now is about $100,000. So you know within that scale that's much less than what we are going to have to do. Rev. Gibson: I hear what you say but the only thing I can't see is you need $100,000 right now, that's facing you. The likeliness is you have it, you have it facing you. How are we going to get it? Mr. Grassie: When, Father, would that be due? When would we actually need that? Assume that the proposition passes in November,when would the people be seated? When would they be up for election? Would that be before the next November? Mayor Ferre: No, it obviously won't be, it's not this year's budget because the election wouldn't be until November of 1979 so it doesn't affect this budget. Mr. Grassie: So it would be at least a year off. Rev. Gibson: Is that what you're telling me, that they would not take seat until November of 79? Mayor Ferre: They wouldn't be elected until then, it doesn't affect it this year. Rev. Gibson: All right, I just want to make sure, you know I don't want to go to the people, I'm glad for this explanation. I don't want to go to the people and ask people to do this and then after they do it you know. Mrs. Gordon: Your point is well taken, Father because what you're saying is that you're going to have to face up to the facts that there are no new sources for income that people don't pay for that we know of. It's a good point. Mayor Ferre: The way I approach it is this: That what we're talking about will cost less than one -tenth of one percent of the total budget so in relationship to the totality of our problem you're talking about it's not that it is insignificant, I mean $150,000 is always signifi- cant - but you're talking about a tenth of one percent. You know it is like Metro absorbing the Homestead Fire operation. Rev. Gibson: Well, I'm going to make this final comment and hush. You know if I get one -tenth of a percent here and one -tenth percent over here and I get a two percent over here pretty soon I will have 25%. Okay? Mrs. Gordon: And the most critical part of what you're doing now and what all of us need to consider is the inflationary factor of operat- ing the City and where are we going to get that from? We have .... Mayor Ferre: And then the other factor is the relative value of these things because if we can afford to spend $250,000 to keep a Marine Stadium operating - but we do - then you know all these things are relative - it is all a question of relative value. What do you get out of it? If you get nothing out of it then I agree $150,000 expen- diture is absurd. If on the other hand you get something out of it then is it worth it? You know, we're getting for example in the 1980 32 SEP 131978 census we will end up with 3 or 4 more congressmen in the State of Florida. Is it worth it? Well, maybe not, what the hell do we need 18 congressmen for, 15 don't seem to be able to get us enough money. Rev. Gibson: Yes, but I learned also that when you get that number of congressmen, I had to learn this the other day, that that would mean Idaho would have one congressman Jess and that would mean that A:c i.zoc.a would have one congressman Less but we'll get to add another over in Florida because the people have moved here. Mrs. Gordon: And we may get more appropriated to Florida. Rev. Gibson: Right So you see the argument is there. Mayor Ferre: No, if they get less it is because their population has gone down but not because we're going to take it away from theta because the size of congress is going to increase after the 1980 census. See, that's an argument that I'm familiar with because of the charges that if Puerto Rico becomes a state that we're going to be taking, Puerto Rico will take seven congressmen away from other states. That's not so, there would be an increase in congress. Mrs. Gordon: That would be but I don't think the others would be, the others are reapportionment. Mayor Ferre: Depending on whether or not the population has increased or decreased, if the population has decreased... Mrs. Gordon: Yes, the shift of population will send the government to where the people are. Mayor Ferre: Sure, I mean that's right. Mrs. Gordon: But that's not where Puerto Rico stands. If Puerto Rico becomes a state it is a new entity, it is not going to take away congress people or anybody from other states. Mayor Ferre: The point is that people of New Jersey are moving to Miami.... Mrs. Gordon: That's different, that's the reapportionment and I believe that that is a logical thing.... Rev. Gibson: That's what I was saying. Mrs. Gordon: Yes. Mr. Grassie: Well, the only other thing that I wanted to point out on page 17 is that at the top of the page you've got the Intergovern- mental service funds. Now these are moneys that we spend but we budget them in what we call the operating departments. So these budgets are really incorporated within other departmental budgets and we put them here simply so that you can see them for your inform- ation but you don't appropriate them separately. And again the Debt Service Account is here for your information. The Trust and Agency Account I think is worth looking at at the bottom of page 17 because it indicates what's happening in the Self Insurance Fund, the Trust Fund now is at $9,000,000 and, of course, you have your Pension Account which is over $15,000,000. Mrs. Gordon: I have a question. Where was this money before? Mr. Grassie: What was called Special Programs and Accounts in the General Fund. Mr. Gary: The pension was in a Pension Department within the General Fund. Mrs. Gordon: Yes, true, but what I'm trying to find out is the income that is generated by these funds, it was still plowed back in to in- crease the fund itself, the Pension Fund, the income wasn't used for the General Fund... 33 SEP 131978 • • Mt. Grassie: of the fund? Mr s . Gordon: Mr. Grassie: in the fund? No, ?otttre talking about the interest on the dollars Dollars that are laying in the trust fund, yes. Have at least for the last how many years been retained As far as we know for the last 20 years, 30 years? Mr. Gunderson: Yes. Mrs. Gordon: Just a question for clarification and simply a question that needs answering since the Trust and Agency Fund is a new way of setting it up, in effect what you're telling me is it's not really new, it is a new title but it is the same financial.... Mr. Grassie: Yes, it is a little more segregated, a little more pro- tected, separately identified. Mrs. Gordon: Yes, financial effect is the same on the funds. Okay. Mayor Ferre: Let me understand this right. Now you take, for example, the Motor Pool. Mr. Gary: It's in Building and Vehicle Maintenance. Mayor Ferre: Building and Vehicle, that's 7 million 8. Now the Police Department is charged for their proportionate share so there is a trans fer of funds, let's say that they spend $2,000,000 on vehicles, that's part of their budget. Mr. Gary: Yes. Mayor Ferre: So in effect it's in here twice because.... Mr. Grassie: No, sir, that's the point. Mayor Ferre: And that's my question because if it isn't twice then why do you add it up to $172,000,000? Mr. Grassie: Well, but that's, the point that I was making with you was that this page is not appropriated by you. Mayor Ferre: I realize that. Mr. Grassie: So it is added up to $72,000,000 simply so that you have a total for the page. Mayor Ferre: But that doesn't make any sense. You know I have to back to Accounting 101, I don't follow the logic of it that's double. Mr. Gary: I understand, scratch the book. Mr. Grassie: No, seriously, what you appropriate is $118,000,000. Mayor Ferre: I understand that, Joe, I'm not questioning that. Mr. Grassie: This is here for your information. Mayor Ferre: Yes, but I think it is a misleading thing for a news- paper man who hasn't had Accounting 302 to look at this and say, well ycu know these people are spending $172,000,000 and that isn't so because the vehicle maintenance, the $3,000,000 that the Police Depart ment is paying for is included in here. So how can you add it here and come to $97,000,000 and then add it here and come to $172,000,000 as a total? You're counting it twice. Mr. Grassie: Yes. Mr. Gary: What this is attempting to show you is what each spending agency is going to spend, what is being spent - twice. I agree with you that you know we are not appropriating $172,000,000 because some of the money comes from one fund into another. Mayor Ferre: But the point is that it is a misleading thing because by adding it I wouldn't have a total because by having a grand total you're confusing thin gs. We're not spending $172,000,000. 34. SEP 131918 1 Mr. Crassie: That's true. Mayor Ferre: Is that true of all these other itetns , for eXattpi.e Utility Service Tax? Mr. Gary: That's true of Utility Service Tax also. This 17.3, a portion of it pays for the debt, the remainder goes back into the General Fund so ... . Mayor Ferre: So it's in here and itt here. Mr. Gary: Right. Mayor Ferre: So the total amount of the difference between 118 and 172 which is roughly about 50 some odd million dollars, $54,000,000 really is already in here and it would just be putting it over here another time. Mr. Grassie: Yes. Really instead of having this footnote here which you see at the bottom of page 1 asterisked, that really ought to be more of a title to the page so that it is clear that these funds are distributed in the rest of.... Mayor Ferre: Yes. Mrs. Gordon: All of them are. Mayor Ferre: Yes. Mrs. Gordon: Then why do you have a total 4 Mayor Ferre: That's the point. In other words I wouldn't mind you having a total, it says $54,000,000 but I do think that having $172,000,000 is misleading. Mr. Grassie: It's a good point, we ought to change it. Mrs. Gordon: I want to compliment you on the style of this, I like it. Mr. Grassie: The rest of the pages.... Mayor Ferre: Did we print this in our own shop? Mr. Grassie: Yes. Mayor Ferre: Was that in the budget? Mr. Gary: We paid for it. Mr. Grassie: (INAUDIBLE) Save a little money. Well, pages 18 19, 20, 21, these conform with state law again in terms of reporting on funds. They're not awfully informative in my estimation but you know we've got to put them here so you can see. Mayor Ferre: Yes. What else have you got, Mr. Grassie? Mr. Grassie: Well, would you like to go through the grant summaries, pages 23, 24 and so on? Howard, do you want to go ahead? Mr. Gary: Sure. ?That we've done here is we've separated arated out the grants for those approved and we've done it by the or state ME funding source or the other funding source, the name of the grant, the contract period and the total amount so that you can always tell how much money we get from each federal source, what's the purpose of it and the dollar amount. Now the thing to be cautious about, the In grants award is that in a lot of cases because their fiscal years do not coincide with ours and they overlap you may see a figure of 2.6 ■ million dollars, for example in Community Development Block Grant. II It says the contract period is 5/16/75 to open, that's the first one on your sheet. Mrs. Gordon: What do you mean by "to open"? i SEP 131978 • Mr, Gary: Well, until the money is expended, Mrs. Gordon: How tnuch of the 2.6 is still available, or is that wh le amount available? Mr, Fosmoen: About 10`0 of the first year is still unspent, Mrs. Gordon: I'd like to know that. Is there anywhere in here that we can find that: information? Mr. Fosmoen: [1o, not in here, we have those.... Mrs. Gordon: Could we have that as a memorandum in add statement? Mr, Fosmoen: On C,D,? Mrs. Gordon: Yes. Mr. Grassie: Is that going to be covered in the Capital Improvement Program so that the City Commission can understand exactly? Mrs. Gordon: I hate to go from one book to the other, it is so much easier for me to.... Mr. Grassie: Well, when you see the size of the Capital Improvement Program I think you'll want to have it in two volumes. Mrs. Gordon: Well, I'm just talking about this one item about the C.D. balances available from the previous years. Mr. Grassie: We'll get that but in addition to that you will also get the Capital Improvement Program which we are trying to re -do in a more understandable format and you will have that kind of informa- tion for everyone of our major improvements available to you but we'll also give you.... Mrs. Gordon: When willwe receive that? Mr. Grassie: The Capital Improvement Program? out of whack by asking them to reformat it and do it differently. Mrs. Gordon: When does that mean we'll get it? Mr. Grassie: The end of October I would say. Mrs. Gordon: Ok, then in the meantime you can give us a summary. Mr. Grassie: (INAUDIBLE) Rev. Gibson: Something keeps at my mind, that on page 18... What you're going to do is this sheet over, is that it? Mr. Grassie: We certainly can if you don't like the way it's presented to you. Rev. Gibson: We have a grand total of 172, or 85 or 28,''you know. Mr. Grassie: We'll change it. Rev. Gibson: Yes, well I just want to make sure that we get a new sheet since we did it in our shop, you know. Mayor Ferre: You know over in Debt Services which is 22 I think that is a little confusing too. Your title is Debt Service then you see the nomenclature is confusing if you're talking about operating expenses. Well, you know, what you're saying is operating expenses of Debt Service but that, you know that's very confusing. Then you have Debt Service as a sub. That's like having under Miscellaneous Miscellaneous. I've thrown the schedule 36 SEP 1319/8 ■ CMM ■ ■ ■MM ■ _■ ■MM ■ MM ■ ■ ■ ■ ■ • Mrs Gary: Well, it's in the State Uniform Accounting System too. Mr. Grassie: Yes, it's state terminology but it isn't very clear. It should be, I don't know how much flexibility we have to change that sort of thing. Mayor Ferre: I saw a statement once that had under Miscellaneous a subtitle called Miscellaneous and then when you went to the break- down it had a further Miscellaneous so they had three Miscellaneouses. Mr. Gary: If I may, Mayor, this is useful, what it is saying here is that we're hitting 17.7. If I may, you can turn to page 17. You can see total Debt Service on there, you see 17,746. Okay? Now, I can switch you back - 594 of that goes to pay off principle and inter- est. The other funds, a portion of the 17,000,000 we talked about goes into the General Fund. That's what we're doing here to show you how much of the money that goes into those funds is for the Debt Ser- vice, principle and interest paid is how much for the General Fund. Mayor Ferre: Now on the 17,152,000 that goes into the General Fund... Mr. Gary: Yes, that goes into the General Fund. Mayor Ferre: That's for debt payment? Mr. Gary: Yes. No, it's not the debt payment, if I may, the Utility Service Tax... Mayor Ferre: This is Debt Service, the appropriations by major object codes. Mr. Grimm: Mr. Mayor, if I may I think what's probably confusing is that that is not debt service that's coming out of General Obligation Bond Funds, that's above and beyond General Obligation Bond Funds and that's maybe where the confusion comes in. Those are things that are paid for by special bond funds like Florida Power and Light or.... Mr. Gary: Utility Service Taxes. Mr. Grimm: ... And those two numbers are so close together that you... Mayor Ferre: Oh, that's why I'm confusing them. 0f course, that isn't Debt Service that we're paying. Mr. Gary: That's not General Obligation Debt Service. Mayor Ferre: No, see the thing that confused me is that the other one is $17,000,000 too. Mr. Grassie: How much flexibility, Jim, do we have, what can we do with that? Mr. Gunderson: Well, you have their Debt Service only it isn't supported by ad valorem tax. That's the distinction and of the $17,349,000 almost all of the 17,000,000, 150,000 of it is over and above the requirement for Debt Service and is used by the General Fund in total. Mayor Ferre: This is incoming. Mr. Gunderson: Yes. Mr. Grassie: This is FP & L money basically, mostly. Mayor Ferre: Well, why don't we call it non -ad valorem income? Isn't it income? Mr. Grassie: Yes, and we treat it as a revenue. Mayor Ferre: Or revenue, I guess we don't call it income around here. Mr. Grassie: Here it happens, this is basically a fund statement. 37 SEP 131978 • ui•uiiiiiii111111l Mr. Gunderson: It can be cleared up easily, the 17,349,000 really should show in the General Fund as a total and not from the General Fund transferred over here just to pay the Debt Service. Mayor Ferre: Well, I see 17,746,000, what are you talking about? Mr. Gary: Out of 17.7 you have to pay Debt Service. Ok, that Debt Service then has been dedicated to come out of those funds. The money comes in from Utility Service Tax into the Trust and Agency_ Fund, we automatically pay the Debt Service, the balance is 17 million. Mayor Ferre: (INAUDIBLE) Mr. Gunderson: You've got some bonds outstanding. Mr. Grassie: Mr. Gunderson: bonds. Mayor Ferre: Mr. Grassie: The Orange Bowl Warehouse Bonds..., The Orange Bowl Warehouse Bonds, you've go And that's out of the other Debt Service. That's correct. Mrs. Gordon: In that 17,349,000, for instance, is that revenue portion here? Mr. Gary: Yes. Mrs. Gordon: In its entirety? Mr. Gary: A portion of it, no. 17,152 is because a portion of that goes to pay off the debt. Let me just turn you to the page where you can see that in specifics. Mayor Ferre: All right, but before you do that, Vince was saying something. Vince, what were you going to say? Mr. Grimm: Well, remember you sold a series of about 6 different bonds, you identified them as A, B, C, D and E and all of those were paid for out of Florida Power and Light Franchise Bonds and most of them have already been spent for improvements like the Orange Bowl... Mayor Ferre: So we have more than one debt, we have an ad valorem or general obligation bond debt and then we have debt that comes out of utilities. For example, just as an example if we were to go ahead with the Watson Island Project and we had to pay some of the utilities out of that it would show up here. Mr. Grassie: Yes. Mr. Gary: If I may, if I may clarify this if you turn to page 271 you will see your bottom line of 17,349,370. This was the figure Commissioner Gordon was asking about. From that 197,250 was taken automatically off the top of debt service. The balance of 17,152,120 goes into the General Fund and the debt service schedule is right below. It tells how much we have to pay out from Utility Service Tax first before we can use those funds for the General Fund. Mayor Ferre: But you see what's confusing to me is you've got debt service three times. The title of page 22 is called Debt Service then out of that you strip 594,000 that you also called Debt Service and then on page 271 you strip further 197,000 and you call that Debt Service. So within one general category you've got three classifi- cations called Debt Service. Now would you tell me what the differ- ence is between page 271 Debt Service of 197,250 and what page 22 of 594 Debt Service, why aren't they all in one place? Mr. Fosmoen: 197 is part of the 594, sir. Mayor Ferre: I realize that, I mean that's self evident, Mr. Grassie: If you go to page 273 you'll find the rest of the money that makes up the 594, that's an additional 176,000... 388 SEP 131978 Mayor Ferre: My question is a general question: Why do you have on a category Called Debt Service which amounts to $594,000 and then on page 270 again you take the top figure there of 17 to fur- ther strip 197,000 in debt? And would you distinguish what Debt Service is on one page and the other? Mr. Gary: If I may Ind like to start on page 17. 17 is categorizing funds by purpose. What we are trying to show you here is all of the Debt Service other than that Dept Service that comes from taxes. Under there you have by detail what that Debt Service is, each cate- gory. That's a summary, tells you all of the Debt Service, comes to 17,746,000. Now if you come to page 22 what we have attempted to do here is to show you out of the funds for Debt Service how much is paid specifically for Debt Service. Now we get 17,746, however, only 594,020 goes for Debt Service. Mayor Ferre: Well, in other words there are bonds like the Orange Bowl Warehouse... Mr. Gary: Incinerator Debt Service which is this detail here. Mayor Ferre: Ok, you've already explained that so this is the second time you've done it, you don't need to do that. Mrs. Gordon: Then what happens, what are we doing with 17,152? Mr. Gary: The 17,152 goes into the General Fund which is reflected on my Utility Service Taxes. Remember when I showed you the 4.8 million dollar increase? Mrs. Gordon: Yes. Mr. Gary: Ok, our Utility Service Tax has gone from 12.8 to 17 That 17.2 is this same 17.152, I've rounded it. Mrs. Gordon: That's the extra money. Mr. Gary: Yes, that's the money that we put in the General Fund to use for General Fund purposes. Mayor Ferre: I lost the page back here, page 200 and what did you say? Mr. Gary: 271. Mrs. Gordon: If we're really depending on this money to the extent that $17,000,000 for General Fund operation - we are really depending in our General Fund on this money to the extent of $17,000,000, these are franchise dollars. Mr. Gary: Yes, Utility Service Tax dollars. Mrs. Gordon: 0f both Southern Bell and Florida Power and Light? Mr. Gary: Yes, gas companies, all of your utility companies. Mrs. Gordon: Ok. Now what happens.... Mr. Grassie: Where you will see that is on page 13. Mrs. Gordon: Ok, what happens if you know the franchise is gone, renewed or the people refuse or, you know? Mayor Ferre: You still haven't answered my question. Before you get over on what Rose is talking about, on page 271 I see whre you jump over from page 222 and what you've got is 17,152,120. Now there is a further classification of Debt Service of 197,250. Now why is that here, why wouldn't that be as part of the 594? Mr. Grassie: It is. Mr. Gary: It is. You're looking at the detail now. These are the detail budgets here. You go from the summary, the front of your bud- gets are summaries. You're looking at detail here. If l may, Mayor, 39 SEP 131978 1 ■ Mr. Gary: Yes they are, if you turn to the next page, if I may, will you put your finger on 267. Ok, now flip back over to page 17. Ok? Now Mayor, and Commissioners, the first one that says Orange Bowl Warehouse Bonds the detail is on page 267. That's how much we paid ME for Debt Service. If you turn to page 269 that 135,000 plus the 275 E. for other expenses equals 185,475. That corresponds to your Incin- erator Debt Service on 17. This is just a detail. If you go to page im 271 you will see 17,349,370. That corresponds to page 17 - 17,349,370. Mr, Grassie: Just like the departmental detail. Mayor Ferre: In other words the 197 is part of the 594, Mr. Gary: Yes. Mayor Ferre: But the rest of them are not here. Mrs. Gordon: Ok, that's clear. ■ • Mr. Gary: Now the 594, if you get every line that I've just gone through, each one of those detailed budgets, add up all the Debt Ser- vice payments on it that's 594. That's what goes for Debt Service, principal and interest. The difference is 17,152, that goes into the General Fund. Mrs. Gordon: On the FP & L Franchise dollars that we were holding as security for revenue bonds for Watson Island, where do I find that? Mr. Gary: Ok, that's not in here. Mr. Grassie: It's in the capital program, where you're holding that is in your capital program. Mrs. Gordon: How much are we holding? How are we allocating it is all in the General Fund? INAUDIBLE COMMENTS Mrs. Gordon: But I don't understand something and I need it clarified for me. You've got the whole income that's coming in from these Utility Taxes shown in here, right? Mr. Gary: No, see you're confusing the FP & L Capital Improvement Fund with the Utility Service Taxes. Ok? Mayor Ferre: Well, what is this? MI Mr. Gary: This is the money from the Utility Service Tax ■ ■ mm MI MI Mr. Gary: No, this is different. Watson Island comes from the Florida Es Power and Light Franchise fees. Mayor Ferre: Well, isn't that what's being earmarked for Watson Island? Mayor Ferre: And the franchise fees is not in here? ■ Mr. Gary: No, it is not. mm Mrs. Gordon: None of it? Mr. Gary: No. Mrs. Gordon: Well how; are we supposed to know what we're talking about? ■ Mr. Gary: Ok, all franchise dollars goes into the Capital Improve- ■ ment Fund. ■ ■ mm ■ Mayor Ferre: That's been traditional, right? Mr. Gary: Right, that's in the Capital Budget. Ok, this year we're anticipating getting 4.8 million dollars from that. It goes into the Capital Improvement Fund firstly. We retire all the debt, we fund the Capital Budget and a portion of it, if I can show you the page, 3 million 6 comes into the General Fund. Mr, Grassie: Which is that increase that was made about three years ago using FP & L.... Mayor Ferre: Is that 4.8 million dollar increase that you got there, part of that? Mr. Gary: Yes, it is. Mr. Fosmoen: Part of what, part of the franchise or part. ity....? Mr. Gary: Part of the Utility Service Tax. Mayor Ferre: The Utility Service Tax which is not the one that used for... Mr. Gary: Watson Island. Mrs. Gordon: Explain that to me, will you? This is as as any. Mayor Ferre: You'd better get to know it before you get to Tallahassee or you're going to be very embarrassed. Mr. Gunderson: Ten percent on all utilities. Mrs. Gordon: Mr. Grassie: Mrs. Gordon: And we get it. On your electric bill you know you pay 10% Yes, right. good a time Mr. Grassie: We get $17,000,000 out of that. The reason up by 4.4 million dollars... Mayor Ferre: It's called Utility Tax. Mr. Grassie: Mrs. Gordon: Mayor Ferre: Mr. Grassie: Mrs. Gordon: Mr. Grassie: Mrs. Gordon: Mr. Grassie: Mrs. Gordon: Yes. What proportion do we get of it? All of We get We get it. 10%. the whole ball game. Yes, that is collected within the City. Of everything that is serviced within our City. That's correct. Ok, does the County get the same? it has ' gone Mayor Ferre: Well now I want to tell you about that. What the County did was they did not get it in the past so they used to get very upset about that so then they went up to tallahassee, as I recall. Does anybody remember that? Then they got a 10% Utility Tax out in the County now that didn't exist three or four years ago and then they went out and they got it passed by the Florida Legislature and then they got it, I don't know how they got it here but they ended up putting it on three or four years ago and now there is a 10% Utility Tax in the County. Mrs. Gordon: In the county and they're getting that. Mayor Ferre: But I'm not too sure that it's for the electric bills, Rose, I think it is only for gas and fuel. Mr. Gunderson: The 10% extends in our case across those same lines, Mayor Ferre: That 10% in Miami is for the electric bill, telephone bill, fuel, gas, everything but the County doesn't get 10% of every- thing, they only get 10% of certain things because they weren't able get it past the legislature. Now what and where I don't know. Mr. Crassie: But we haven't finished explaining to you what the difference is. Ok, we get the 10% on your utility bill.... Mrs. Gordon: And then you get the franchise fee on top of that. Mr. Grassie: And the franchise fee is separate. The franchise fee is what traditionally has been devoted to the capital program. Mrs. Gordon: Yes. Mr. Grassie: However, about three years ago you gave a salary increase using that source of money. Mrs. Gordon: I know. Mr. Grassie: Now we're stuck with its Mrs. Gordon: So the consumer pays two separate items, they pat the 10% plus the franchise. Mr. Grassie: That's correct. And the franchise fees for Dade County was challenging. Mrs. Gordon: The franchise fee was what they were challenging. Mr. Grassie: Yes, not the utility tax but the franchise fee is what they were challenging. Mrs. Gordon: Do they get the utility tax too? Mr. Grassie: No, that's what the Mayor was talking about but they have not been able to extend it to FP & L but they apparently .... Mrs. Gordon: And do they get the franchise fee? Mayor Ferre: I think, Rose, they get it in fuel but they don't it on electricity and why I don't remember, and I may be wrong on that but they didn't used.... Mrs. Gordon: Do they get a franchise fee in the County? Mayor Ferre: I think they do, yes, they have a franchise fee and that's why they wanted to take it away from us. Mrs. Gordon: They wanted to get our's, they wanted to get the thing. Mayor Ferre: Yes, they said that that belonged to them. Mrs. Gordon: I know, they wanted to get everybody, all the municipal- ities. Mayor Ferre: I think they get their's in the unincorporated areas and I guess what they were claiming is that that belongs to them period and not only the unincorporated areas. Did we ever take that to court, George? Mr. Grassie: Miami Springs took it to court ... Miami Gardens.., Mrs. Gordon: They won the case which effectively we all won. Mayor Ferre: Didn't we join them? Mr. Knox: We filed an amicus curiae I believe. Mayor Ferre: Did that go all the way to the Supreme Court? Mr. Knox: I know it left the Third District Court of Appeal, I'm not sure.... Mr. Grassie: But the County Commission has as a policy said that they would not carry the case further. So the County Commission has said that they're not going to push it any further. 42 SEP 131978 • ktett. Gibson: es. Mr. Knox: I don't know whether, it's not significant at this point but they did that pursuant to a resolution. They adopted a policy of not pursuing it with a resolution. Mr. Grassie: You mean it's not an ordinance, George? Mr. Knox: No. Mr. Grassie: Well, ate you suggesting that they could ehaftge`their mind? Rev. Gibson: Sure. Mayor Ferre: They can dogs lie right now. Mr. Grassie: Yes. Mr. Grimm: Yes, but what he's trying to tell you that that implies is that's a club hanging over your head in 1984.` Mayor Ferre: Of course it is but what else is new? Mrs. Gordon: Ok. Mr. Grassie: Well, we have a Summary of Grants that we've talked about.... Mrs. Gordon: Just another on that same point again, for the salary portion that we need to use in the General Fund from the franchise fees, is that shown in here? Mr. Gary: Yes. It's on page... Mrs. Gordon: The only thing that's not shown here is the portion that was set aside for development such as the Watson Island. Mr. Grassie: That stays in the Capital Program. Mr. Gary: Turn tc page 13. You'll see in the first category it says Franchise Taxes, you'll see an estimate for 78-79 of $3,615,000. Mrs. Gordon: And that's the portion that we're utilizing. Nr. Gary: Right. Mayor Ferre: Tell me again? Mr. Gary: $3,615,537. Mrs. Gordon: Anywhere in here does it "showthe total? Mr. Gary: No, it doesn't. Mrs. Gordon: It only shows the total that we're putting in the General Fund. Mr. Gary: Right. ... So the reason it's not shown here is because it goes into the Capital Improvement Fund first which is a Trust and Agency Fund and that fund pays to the General Fund. Mayor Ferre: Well, I guess the question is the Commission wants to know what is the total franchise tax that the City of Miami receives going everywhere and anywhere. Mrs. Gordon: And where is it going... being held out for.... Mayor Ferre: All franchise taxes. Mr. Grassie: The franchise fee is producing... Mayor Ferre: Taxes. 43 SEP 13 Mr. Grassie: Well that is a distinction I want to make for you, The franchise fee is up above and that's giving you 3.6 million. The Utility Tax is down about the middle of that page.... Mayor Ferre: No, sir, if you look at the category, the sub -paragraph Business and Commercial, that's five on page 13 then the sub -title is Franchise Tax and then under that you have FP & L Franchise and then at the bottom it says Total Franchise Taxes. Now I guess what I'm asking is what ie; the real - will The real total franchise tax please stand up. Mr. Grassie: It's about 4.8 million. Mayor Ferre: No, it's not so because you're telling me.... Mr. Grassie: But it is so. Mrs. Gordon: You know I feel uncomfortable, I really do, when I don't have the total amount of money that the City receives. Mayor Ferre: That's the point. Mrs. Gordon: I understand that we have to hold it for Capital Improve- ments and I understand we're going to have a complete report on that at the end of October but at this point in time I'd like to sure the devil know what that figure is, not how it's going to be spent but what that figure is in here somewhere on a separate sheet. Ok? Mayor Ferre: Well, see you're saying that the total is 4.886 and the fact is that it isn't the total because that does not include the Florida Power and Light Franchise total that is going to the capital. Mr. Gary: Right, capital purposes. Mayor Ferre: And how much is that? Mr. Gary: Last year, 77-78, we received in July 4.8 million dollars. Mayor Ferre: Oh I see, I get you now. So assuming we receive the same out of the 4.8, 3.6 is coming here and the rest is going there. Mr. Gary: Yes. Mayor Ferre: I get you. Is there any other sum like that, for example gas? Mr. Gary: Well, the Utility Service Tax is another example, the 17.2 which we just discussed and after you pay off the debt of 197,000 the balance goes into the General Fund. Mrs. Gordon: Yes, but that's not set up somewhere else where we don't see it. Mayor Ferre: See, that comes in here. What she's asking for is.... Mrs. Gordon: ....what we don't see is what I want to see. Mayor Ferre: What she's asking for is are there any other sources of franchise taxes, Dodge Island, Taxi for Hire, Telephone Franchise, Gas Franchise, Florida Power and Light Franchise that go into any other budget like Capital Budget that is not shown in the General Fund? Mr. Grassie: No. Mayor Ferre: So the only one is.... Mrs. Gordon: Well, if it isn't franchise fees that are coming in that are not all shown here are there any other moneys of any other kind of revenue that the City receives that is not reflected in the budget? Mr. Grassie: Yes. All of your CD funds, for example.,.. Mayor Ferre: Well we've gone over that. Mrs. Gordon: We've got that. 44 SEP 131978 Mr. Grassie: All of Mrs. Gordon: We've got that in here, C.b Mr. Grassie: No, the C.D. moneys that you spend for projects don't show in here. Mayor Ferre: For example the Little Havana Community Building that we're going to innaugurate in October or November is not in here. Mr. Grassie: That's correct, that's all in your Capital Program. The revenue bond moneys that you may have, the federal categorical grants for the construction, for the renovation of Dinner Key.... Mayor Ferre: No, it is in here. mmMrs. Gordon: Yes, I saw it. Mr. Grassie: You know those things are all in the Capital Program. • Mayor Ferre: But it is in here, it's also in here. I just saw it. Mr. Grassie: Well, in a grant summary, yes, but not in anything that you appropriate. Where you appropriate it is in the Capital Program. Mrs. Gordon: Ok, whatever comes in to those dollars from those sources whatever comes in goes out. • Mr. Grassie: That's correct. Mayor Ferre: Yes, but the point, Rose, is it is true in the Grant Summary as far as federal funds coming in but it's not true of the FP & L Franchise because it's not in any grant summary, there's no page where that's summarized. So you know to really get the total impact of it you'd need to have.... Mr. Grassie: If I understand what you're looking for it is some kind of a summar::' which will cut across the Capital and the General Fund Budgets and bring these things togEther maybe on one page. Mrs. Gordon: Yes, give us a clear - in my opinion - precise mental picture of where we are, what comes through the City. Mr. Grassie: From every source. Mrs. Gordon: It would be a very important thing for me to understand in my mind, not that we need it in order to pass the budget, it's a matter of understanding the picture. Mr. Grassie: No, Ok, I see. And that would include, for example, CETA moneys, C.D. moneys? Mrs. Gordon: I would assume anything that we get that comes into that. • Mayor Ferre: Joe, this isn't the first time we've gone through this I must say that there hasn't been a year that I haven't gone through this very same exercise in this very same discussion when we've asked for the very same thing. There is absolutely not one thing that's new today, not one including the Florida Power and Light Utility and the Franchise and all of that has been discussed before - just our memories may not cover it but we've gone through this before. Mr. Grassie: I have to take your word for it. Mayor Ferre: And it isn't only with you it goes back to Paul and it goes back even to Mel Reese. Mr. Grassie: Haven't made it yet, huh? Mayor Ferre: Haven't made it yet. Mrs. Gordon: I have to say that I have to leave at 12:00 O'Clock. 4 SEP 13197a • Ret' t ibson : mention it Mayor Ferre: Did anybody hear what I heard about, and the reason 1 )u said about the taxi franchise tax? The taxi franchise that we get $70,000? Rev. Gibson: Yes. I heard there is a move afoot to want to turn all that business over to Metro. Mayor Ferre: Well, that's been going on for years. Rev. Gibson: Yes, but I understand it has really raised its head again. INAUDIBLE Rev. Gibson: Some of the people in the business. Mrs. Gordon: Who would take it? .., they pay it to us, to them. Rev. Gibson: Yes, when it comes remember I told you so. Mayor Ferre: Well I've got to run, is there anything else you need to point out at this stage of the game, and if not when is our next session? Mr. Grassie: We have an official yearing in front of you on the agenda tomorrow that is really simply to get our calendar moving, is not a working session but your next real session is Friday. Mrs. Gordon: How long do you think Friday's will take? Mr. Grassie: I would anticipate all day. Mayor Ferre: Well, I've got to catch a plane for Venezuela some time in the afternoon so all day means around 4:00 O'Clock. Mr. Grassie•: Mrs. Gordon: Mayor Ferte: Fifteen department heads coming. Can we assume that we will be through by 4:00? Well, let's just assume it, Rose, and let's just say.... Mr. Grassie: We'll quite when you're done, you know when you say we're done we're done. Mrs. Gordon: Then we'll continue the next time we meet. Mr. Grassie: Monday. Mrs. Gordon: I would prefer to break at 3:00 on Friday if be possible. Mayor Ferre: All right. Mr. Grassie: Excuse me, you did get the two memorandums I sent out on the dates and cr. locations? Mayor Ferre: I'll be ready to respond to that tomorrow. You checked it out with all of our calendars? Mr. Grassie: Yes, it was not, as you know, easy to get all of you but yes we have checked it out with your calendars. The thing tomor- row is simply, you know you receive the budget officially and it gets the calendar moving.... Mayor Ferre: Mr. Grassie, I would like to request that what you've done with us today that you do it with the two commissioners that were not present, I think just perhaps the two of you should meet with Plummer and Reboso together. Mr. Grassie: We'd be happy to if we can arrange it with their schedules. Mayor Ferre: I think I'd like to with them almost insist that they do that, and I'm not saying that they don't read the budget, we all 46 SEP 131978 read the budget but you know sometimes it's not that easy to tinder,. stand. Mrs. Gordon: Okay, Friday and we break at 3:00 O'clock? Mayor Ferre: Yes. Mr. Grassie: If that's your determination. Thereupon the City Commission adjourned its Special Workshop. Session at 11:45 O'Clock A.M. A1'rrbf: RALPH G. ONGIE City Clerk MATT,/ HIRAI Assistant City Clerk 1MACE A. FERRE Mayor �tttt1 �eul