HomeMy WebLinkAboutSubmittal-FY'09 1st Hearing Presentation SpeechFY'09 BH.3 Appropriations -City of Miami
Show Title Slide
Good evening Commissioners, Mayor, City Manager, and residents
of the City of Miami, this evening before I present to you the
fiscal year 2009 Proposed Budget for the City of Miami I need to
first provide you with a floor amendment detailing the fiscal
year 2009 budget.
Pass out new BH.3 and read the amendments
Next Slide
The focus of the fiscal year 2009 Proposed Budget was to prepare
a structurally balanced general operating budget with recurring
revenues supporting recurring expenditures.
To provide a budget, which conform to GAAP as applicable to
local government.
To present a budget using current financial resources and
providing allocations based on a modified accrual basis of
accounting as reported in the City of Miami's Comprehensive
Annual Financial Report.
And, most importantly, to receive citizen feedback to ensure the
proposed budget is consistent with the needs of our citizens.
Next Slide
Major budget issues in preparing the fiscal year 2009 Proposed
Budget were: the continued effects of property tax reform from
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o8- oioo7- Subroitta. I-- FY0? f
Submitted into the public
record in connection with
item BH.3 on 09-11-08
Priscilla A. Thompson
City Clerk
State of Florida House Bill 1B, the adoption of Amendment 1, the
restrictions related to Senate Bill 1588 -Glitch Bill, and the
increasing impact of fuel and utility costs. Next Slide
As presented to you during the Budget Workshop, once again, in
fiscal year 2009, the operating millage rate approved by the
City Commission will be limited by the type of vote required
under House Bill 1B.
In fiscal year 2009, House Bill 1B will limit the growth in the
City's millage rate to the change in statewide per capita
personal income with a majority vote of the City Commission. The
change in per capita personal income provided by the Department
of Revenue is 4.15%.
This millage rate can be increased up to 10% with a 4/5th vote of
the City Commission and can be increased greater than 10% with
either a unanimous vote of the City Commission or voter
referendum.
In October 2007, the City of Miami was removed from the list of
municipalities under special financial concern as a result of a
Special Session of the State Legislature.
The removal of the City from the list of municipalities under
special financial concern reduced the maximum allowable millage
rate in fiscal year 2008 from 7.2999 mills to 6.6429 mills.
Although the millage rate approved by the City Commission was
the maximum allowable at the time of the vote, the removal of
the City from the list of municipalities under special financial
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Submitted into the public
record in connection with
item BH.3 on 09-11-08
Priscilla A. Thompson
City Clerk
concern changed the calculation of the majority vote and 4/5th
vote millage rates in fiscal year 2009.
The maximum allowable millage rate with a majority vote was set
at 6.9764 mills and the 4/5th vote millage rate to 7.6740 mills.
The 7.6740 millage rate was used in the formulation of the
fiscal year 2009 Proposed Budget. The overall impact of removing
the City from the list represents a 9.4% reduction in both the
majority vote and 4/5th vote millage rates. Next Slide
Additional relief to property owners was provided on January 29,
2008 when voters approved Amendment 1.
Amendment 1 in fiscal year 2009 will provide homestead property
owners with an additional $25 thousand in exemption on the 3rd
$25 thousand in assessed value, provide a $25 thousand exemption
on personal business property Next Slide, and provided
portability of Save Our Homes up to $500 thousand.
The impact of Amendment 1 on the City's preliminary gross
taxable values reduced it by $1.2 billion from $40.9 billion to
$39.7 billion in tax year 2008. This made the overall year-to-
year change in the City's preliminary gross taxable values 1.6%
compared to 14.5% in tax year 2007. Next Slide
To limit the impact Amendment 1 will have on the City's rolled
back rate and calculation of the majority vote millage rate, the
State Legislature passed Senate Bill 1588 also known as the
Glitch Bill.
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Submitted into the public
record in connection with
item BH.3 on 09-11-08
Priscilla A. Thompson
City Clerk
The Glitch Bill removed the effects of Amendment 1 from the
calculation of the City's rolled back rate and reduced the
majority vote millage rate by 0.2251 mills from 6.9764 mills to
6.7513 mills. 6.7513 mills is the majority vote millage rate
established for fiscal year 2009. Next Slide
The City of Miami, like others Cities, is forecasted to pay more
for motor fuel in fiscal year 2009. The weekly price of regular -
grade gasoline, which peaked at an average of $4.11 per gallon
on July 14th, is forecasted to average $3.82 per gallon in fiscal
year 2008-2009 compared to $2.81 per gallon, at the start of
fiscal year 2008.
Diesel fuel, which fell from an average of $4.76 per gallon to
$4.35 per gallon on August llth, is forecasted to average $4.27
per gallon in fiscal year 2009 compared to $2.88 per gallon at
the start of fiscal year 2008.
Based on the forecasted changes in fuel prices per gallon and
the City's current motor fuel expense trend, fuel expenses are
forecasted to increase over 40% from $5 million at the start of
fiscal year 2008 to $8 million in fiscal year 2009. Next Slide
On July 1st, the Florida Public Service Commission approved
Florida Power and Light request to adjust the pass -through fuel
surcharge on customers' bills in order to recover $746 million
in unanticipated fuel costs. FPL is expected to recover 50% of
this cost between August and December 2008 and the remaining 50%
in 2009.
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Submitted into the public
record in connection with
item BH.3 on 09-11-08
Priscilla A. Thompson
City Clerk
Additionally, consumption of electricity is expected to increase
by an average of 1.2% between 2008 and 2009 and electricity
prices in the South Atlantic Region of the U.S., which includes
the City of Miami, is anticipated to increase 15% from $8.6
cents per kilowatt hour at the start of fiscal year 2008 to 10.1
cents per kilowatt hour in fiscal year 2009.
Based on the uncertainty in fuel prices, the possibility of
weather -related events, and the City's current utility costs
trend, utility costs are forecasted to increase 20% from $10.5
million in fiscal year 2008 to $12.6 million in fiscal year
2009. Next Slide
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Submitted into the public
record in connection with
item BH.3 on 09-11-08
Priscilla A. Thompson
City Clerk
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Submitted into the public
record in connection with
item BH.3 on 09-11-08
Priscilla A. Thompson
City Clerk