HomeMy WebLinkAboutSubmittalCity of 4liamt
August 30, 2005
The Honorable Mayor, Members of the City Commission
and Chief Administrator
3500 Pan American Drive
Miami, FL 33133
RE: Budget 2006 Estimating Conference Recommendation
JOE ARRIOLA
City Manager
SUBMITTED INTO THE
PUBLIC RECORD FOR
ITEM e4.3 ON 9-077-05;
In accordance with the City of Miami Financial Integrity Ordinance (Ordinance), the City
conducted a Budget Estimating Conference on August 30, 2005 to review the
assumptions used in developing the Fiscal Year 2005-2006 Operating Budget. As
required by the Ordinance, a Budget Estimating Committee (Committee) was formed and
consisted of one principal staff member each from the City's Finance Department and
Office of Strategic Planning, Budgeting and Performance, and included a minimum of
two outside professionals with public financial and accounting experience. The members
of this year's conference included the following:
Richard A. Berkowitz, JD, CPA — Berkowitz Dick Pollack & Brant, Certified Public
Accountants & Consultants, LLP
Maggie Manrara, CPA — Miami Shores Village Charter School
Linda Haskins — CFO, City of Miami
Larry Spring — Chief of Strategic Planning, Budgeting & Performance, City of Miami
Below please find a summary of the comments and recommendations made by the
Committee.
Committee Comments and Recommendations
➢ The Committee expressed concerns with the proposed increase in the Police
Department sworn personnel staff. Although there will be a need for more levels
of service as a result of projected population growth and density increase within
the City, the Police Department's existing hiring and attrition history should be
factored into the budgeting decision and whether increased budget expenditures
will in fact be expended. The Committees comments in this area were driven by
the concern regarding the overall level of conservatism in the budget.
STRATEGIC PLANNING, BUDGETING AND PERFORMANCE
444 S.W. 2nd Avenue, 5th Floor Miami, FL 33130 (305) 416-1011 Fax: (305) 416-2150
Mailing Address: P.O. Box 330708 Miami, FL 33233-0708
�11e_ Ds- • CEO Q P-Ca. p.
Estimating Conference Report
Page 2
➢ The Committee expressed a general concern regarding the overall level of
conservatism used in preparing the revenue forecast, specifically given the limited
reliance on fund balance the City realized over the past few years. As a result, the
Committee recommended the City pursue a forecasting model, which is more
aggressive on the use of current -year revenues, and limits the reliance on fund
balance to balance the budget. Additionally, the Committee recommended more
reliance on estimates prepared by the State of Florida Department of Revenue
(i.e., State Revenue Sharing, Half Cent Sales Tax, Local Option Gas Tax, etc).
The City has historically applied a 5% collection discount to these estimates.
➢ The Committee agreed with the proposed allocation of providing additional
resources to review compliance with the City's enacted fees (i.e., Private Hauler
Franchise Fees). It was also recommended that more focus be placed on ensuring
all revenues, to be received by the City from outside sources, be reviewed by the
applicable City staff for proper accounting and collections of said fees and
charges (specific focus was placed on the Private Hauler Fees).
➢ The City's total pension fund currently has an unfunded liability of approximately
$313 million ($145 million in G.E.S.E. and $168 million in F.I.P.O.). These
amounts were actuarially -determined. The Committee strongly recommended the
City review the factors considered in the actuarial reports to address the impact of
increasing pension costs and the methodology being utilized to fund the unfunded
pension liability.
➢ The Committee strongly questioned the timing of the reduction of the millage rate
and fire fee, and the decision to maintain a static solid waste fee when the budget
is showing a significant use of fund balance. The Committee recommended that
these rates and fees not be reduced or remain constant for prolonged periods of
time. This will allow these rates and fees to adjust to increasing economic and
inflationary costs. The City is currently experiencing a period of substantial
economic growth. However, the Committee believes this period of extraordinary
economic growth will decline in time and current financial decisions should be
based on sound fiscal principles. Rates and fees should be reduced in fiscal years
when there is no need to use fund balance to balance the budget.
The Committee appreciates the opportunity to participate in this very important process.
It is hoped that the comments and recommendations indicated above will help the City of
Miami achieve and maintain its financial and strategic goals. The Committee would like
to commend the City' budget staff and particular its Director for their hard work, sound
budget assumptions and the strategic approach utilized in the budget process.
The Budget Estimating Committee
Fiscal Year 2006
Budget Presentation
J
SUBMITTED INTO THE
PUBLIC RECORD FOR
lTEM6.3 ON 9-a7-o5-
Budget Overview
• Achieved a balanced budget
• Provided for tax relief
• Continue our investment back into our capital
infrastructure
• Enhancing our delivery of service
• Utilized the strategic objectives to guide
resource allocation decision
}
September 27, 2005 2
Revenue vs. Expenses
Category
FY 04 Actual
FY 05
Amended
FY 06 Difference Btw
Proposed FY'05 and FY06
a Change
TAXES
LICENSES AND PERMITS
INTERGOVERNMENTAL REVENUE
CHARGES FOR SERVICES
FINES AND FORFEITS
MISCELLANEOUS REVENUE
NON -REVENUES
INTERNAL SERVICE FUNDS
REVENUE TOTAL
SALARIES & WAGES - FIXED
FRINGE BENEFITS - FIXED
OPERATING EXPENSES - FIXED
OPERATING EXPENSES - VARIABLE
CAPITAL OUTLAY - VARIABLE
TRANSFERS TO OTHER FUNDS
EXPENSE TOTAL
REVENUErEXPENSE TOTAL:
$188,529,731
$10,300,374
$47,231 ,982
$103,575,934
$4,584,623
$15,297,344
$3,182,336
$47,931 ,721
$420,634,045
$203,998,532
$10,124,852
$34,356,278
$96,561 ,686
$4,410,000
$15,412,070
$51 ,939,431
$43,363,187
$460,166,036
$239,292,592
$9,804,100
$36,899,366
$98,763,061
$4,422,500
$14,919,580
$35,884,727
$51 ,778,734
$491,764,660
$35,294,060
($320,752)
$2,543,088
$2,201 ,375
$12,500
($492,490)
($16,054,704)
$8,415,547
$31,598,624
17.30%
-3.17%
7.40%
2.28%
0.28%
-3.20%
-30.91 %
19.41 %
6.87%
$202,453,023
$21 ,618,460
$85,736,470
$71 ,675,790
$4,039,568
$40,120,311
$425,643,623
$213,109,147
$23,366,332
$93,640,198
$97,460,515
$1 ,907,052
$30,682,792
$460,166,036
$220,435,503
$26,712,892
$104,052,600
$96,611,901
$1,348,230
$42,603,534
$491,764,660
$7,326,356
$3,346,560
$10,412,402
($848,614)
($558,822)
$11,920,742
$31,598,624
3.44%
14.32%
11.12%
-0.87%
-29.30%
38.85%
6.87%
($5,009,578)
$0
$0
$0
i
September 27, 2005 3
Changes from first hearing
> Reduce Fire Fee an additional 15%
> Model City Trust $616K
> Virginia Key Beach Trust by $90K
to $990
> Added 1 FTE to Office of City
Attorney
September 27, 2005 4
Estimating Conference
• More aggressive revenue forecasting
models
• Review pension liability and develop a
methodology to fund the unfunded
liability.
➢ Timing of the millage and fee reduction
• Sound budget assumptions and good
strategic approached
i
September 27, 2005 5
Summation
• Budget proposal addresses our strategic
needs and priorities
• We continue to focus our attention on
improving business processes and service
delivery
• We continue to fulfill our commitment to
providing sustainable tax relief
• We continue to strive to reach our vision of an
international city that embodies diversity,
economic opportunities, effective customer
service, and a highly rated quality of life
}
September 27, 2005 6