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Legislation
Ordinance
City Hall
3500 Pan American
Drive
Miami, FL 33133
www.miamigov.com
File Number: 11-01166 Final Action Date:
AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER 18/
ARTICLE IX/DIVISION 2 SEC 18-542 (5) ENTITLED "FINANCE/FINANCIAL
POLICIES/FINANCIAL INTEGRITY PRINCIPLES" BY ADDING A PROVISION
RELATED TO ACTIONS TO BE TAKEN BY THE CITY MANAGER WHEN THE
UNASSIGNED FUND BALANCE FALLS BELOW A CERTAIN THRESHOLD;
CONTAINING A SEVERABILITY CLAUSE AND PROVIDING FOR AN IMMEDIATE
EFFECTIVE DATE.
WHEREAS, the City of Miami ("City") recognizes it has made improvements in its financial position
through adherence to financial "best practices;" and
WHEREAS, the City has formalized a series of financial principles, many of which are currently
utilized by the City, which will serve as the basis for governing the City's finances in the future; and
WHEREAS, the City desires to clarify and expand the financial integrity principles it -had adopted
and implemented to comply with required federal standards;.
NOW, THEREFORE, BE IT ORDAINED BY THE COMMISSION OF THE CITY OF MIAMI,
FLORIDA:
Section 1. The recitals and findings contained in the Preamble to this Ordinance are adopted by
reference and incorporated as if fully set forth in this Section.
Section 2. Chapter 18/Article IX/Division 2, entitled "Finance/Financial Policies/Financial Integrity
Principles," is amended in the following particulars:{1}
"Chapter 18
FINANCE
ARTICLE IX. FINANCIAL POLICIES
DIVISION 2. FINANCIAL INTEGRITY PRINCIPLES
City of Miami Page 1 of 3 File Id: 11-01166 (Version: 1) Printed On: 12/2/2011
File Number: 11-01166
Sec. 18-542. - Financial integrity principles.
(5)
Reserve policies. The following three reserve policies categories are established for the general
operating fund of the city:
a.
Current fiscal year contingency. A "contingency" reserve level of $5,000,000.00 shall be budgeted
annually. Such contingency reserve shall be available for use, with city commission approval, during
the fiscal year, to fund unanticipated budget issues which arise or potential expenditure overruns which
cannot be offset through other sources or actions. The unused portion of the budgeted contingency
reserve in any fiscal year shall be reflected as unassigned fund balance reserves until such time as the
city has funded 50 percent of the liabilities of the long-term liabilities (excluding bonds, loans, and
capital lease payables) as reflected in the city's comprehensive annual financial report (CAFR).
Amounts not needed to satisfy the 50 percent requirement shall be considered general fund
unassigned fund balance reserve and be treated in accordance with subsection (5)b.
b.
General fund unassigned fund balance reserves. The city shall retain unassigned fund balance
reserves equal to a threshold ten percent of the prior three years average of general revenues
(excluding transfers). Amounts designated as "contingency" reserve in subsection 5a. shall be
included in the calculation of meeting the ten percent of the prior three years average of general
revenues for the unassigned fund balance category. Such reserves may only be used for offsetting an
unexpected mid -year revenue shortfall or for funding an emergency such as a natural or man-made
disaster, which threatens the health, safety and welfare of the city's residents, businesses or visitors.
Any time these reserve funds fall below the ten percent threshold, the city commission shall adopt a
plan to achieve the threshold within two fiscal years —and the City Manager shall present an oral report
at the second commission meeting of every month, except during the month of September, regarding:
i) the status of the current fiscal year budget and ii) the proposed budget for the subsequent fiscal
year. Such oral report shall appear on the City Commission agenda as a discussion item under the
agenda category titled "Budget." Amounts in excess of the ten percent threshold may be used for
capital improvements, unanticipated expenditures necessary to assure compliance with legal
commitments, and for expenditures that will result in the reduction of recurring costs or the increase in
recurring revenues of the city.
c.
General fund assigned fund balance reserves. The city shall retain assigned fund balance reserves
equal to ten percent of the prior three years average of general revenues (excluding transfers). Such
reserves shall be used for funding long-term liabilities and commitments of the city such as:
1.
Compensated absences and other employee benefit liabilities, including liabilities related to
post -retirement benefits;
2.
Self-insurance plan deficits (including workers compensation, liability claims and health insurance);
3.
Anticipated adjustments in pension plan payments resulting from market losses in plan assets and
other unanticipated payments necessary to maintain compliance with contractual obligations.
Payment for compensated absences and other employee benefit liabilities and self-insurance plan
deficits may be drawn from this reserve during the fiscal year and shall be replenished each year until
50 percent iof such the liabilities are funded. Other designated reserves may be drawn upon without
the need for replenishment.
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Section 3. If any section, part of section, paragraph, clause, phrase or word of this Ordinance is
declared invalid, the remaining provisions of this Ordinance shall not be affected.
Section 4. This Ordinance shall become effective immediately after final reading and adoption
thereof.{2}
APPROVED AS TO FORM AND CORRECTNESS
JULIE O. BRU
CITY ATTORNEY
Footnotes:
{1} Words/and or figures stricken through shall be deleted. Underscored words and/or figures
shall be added. The remaining provisions are now in effect and remain unchanged. Asterisks
indicate omitted and unchanged material.
{2} This Ordinance shall become effective as specified herein unless vetoed by the Mayor within
ten days from the date it was passed and adopted. If the Mayor vetoes this Ordinance, it shall
become effective immediately upon override of the veto by the City Commission or upon the
effective date stated herein, whichever is later.
City of Miami Page 3 of 3 File Id: 11-01166 (Version: 1) Printed On: 12/2/2011