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HomeMy WebLinkAboutExhibit - Assessment Report9a. PE.addJNlu RESOURCE NETWORK ❑uw TO i*1 City of Miami, FL Assessment Report October 9, 2014 NATIONAL RESOURCE NETWORK ■ 10 G STREET NE, SUITE 580 * WASHINGTON, DC 20002 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE TABLE OF CONTENTS Overview 4 Summary of Findings 6 The Need for Network Assistance 8 Recommendation for Network Assistance 10 Appendix 16 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE OVERVIEW vpu . _1mow. RESOURCE ETWORK OVERVIEW OF THE NATIONAL RESOURCE NETWORK DIRECT ASSISTANCE PROGRAM The National Resource Network (Network) will develop and deliver innovative solutions to American cities that are rounding the corner on some of their toughest economic challenges. The Network will work with mayors and other local leaders to identify practical solutions, sharing real -world expertise and best practices, and will help cities develop the tools and strategies they need to grow their economies and more effectively use existing federal investments. Cities that receive assistance from the Network will serve as laboratories for innovation and learning that will also strengthen federal policies and programs moving forward. The Network will deliver on the ground direct assistance to individual cities from a team of experts that will work side -by -side with a city for up to 12 months. Teams will assess local needs, provide recommendations, and help cities identify and execute on strategies that align with their economic recovery. Teams also will work with cities to identify potential opportunities for funding and strategic partnerships with foundations, nonprofits, and local businesses to help them achieve their economic goals. The direct assistance program is based on the following principles: • The Network will prioritize assistance to cities that demonstrate both significant levels of need and a demonstrated commitment to promoting and executing strategies to grow their economy. • The Network will provide an assessment of the City's needs, evaluating economic development, housing, land use, infrastructure, crime, schools, budget, and city operations. • Based on these assessments, the Network will propose customized direct assistance strategies. MIAMI ASSESSMENT TEAM From April 28-29, 2014, a Network assessment team visited Miami that included representatives from the following organizations: • Enterprise Community Partners. For more than 30 years, Enterprise has introduced solutions through public -private partnerships with financial institutions, governments, community organizations and other partners that share the vision that one day, every person will have an affordable home in a vibrant community. Manuel 0choa, a Program Director, represented Enterprise Community Partners on the Miami assessment team. • Public Financial Management. The PFM Group of companies is a national leader in providing independent financial advice as well as investment advisory, management, and consulting services to local, state, and regional government and non-profit clients. PFM helps clients meet their financial challenges with a broad array of products, backed by unquestioned professionalism and outstanding service. Chris Arlene, a Senior Analyst, represented PFM on the Miami assessment team. • HR&A Advisors. HR&A is an industry -leading real estate, economic development and public policy consulting firm. HR&4 has 30 years' experience working with cities across the country to create economic growth through rigorous analysis, hands-on assistance and creative strategies that tap local assets. Stockton Williams, a Managing Principal, represented HR&A Advisors on the Miami assessment team. Assessment Report City of Miami, FL Overview Page 4 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE , L L\ RESUME NETWORK AT DEAL MIAMI ASSESSMENT METHODOLOGY The Network has developed a systematic approach to the assessment process that includes data collection and analysis, interviews with key leaders and the development of a tailored set of findings and analysis for each city. Review of Baseline Conditions The first phase of the Miami assessment focused on reviewing budgetary, operational, economic, and related information provided by local officials and publically available demographic information identified by the Network to better understand and assess current priority challenges and opportunities. On -Site Interviews The second phase of the Miami assessment consisted of on -site interviews. Over the course of two days, the Miami assessment team met with senior leaders and department directors to further clarify key challenges facing Miami and identify potential opportunities for direct assistance that would be most catalytic or transformative. In Miami, the assessment team met with the following individuals: • Tomas Regalado, Mayor • Christopher Rose, Director of Management and Budget • Fernando Casa -Mayor, CFO • Vanessa Acosta, City Manager's Office • Enrique Torre, Public Facilities Director • Francisco Garcia, Planning Director • Peter Bockweg, OMNI/Midtown CRA Executive Director • Manuel Orosa, Chief of Police • Jaap Donath, Beacon Council Senior Vice President • Maurice Kemp, Fire Chief • Lillian Blondet, Grants Director • Javier Betancourt, Downtown Development Authority Deputy Director • Alfredo Duran, Office of Community Development Deputy Director Recommendation for Direct Assistance The third phase of the Miami assessment consisted of developing this report, which provides recommendations for direct assistance from the Network. These recommendations are based on an evaluation of Miami's baseline conditions, priority issues and opportunities identified during on -site interviews, additional research and evaluation . of. Miami's primary challenges and follow-up conversations with Miami's leaders after the on -site interviews. Assessment Report Overview City of Miami, FL Page 5 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE SUMMARY OF FINDINGS RESOLIRCE NETWORK The following is a summary of the assessment team's findings and the recommended technical assistance from the National Resource Network for Miami, Florida. The findings and recommended assistance are based on the Network's research on Miami, a two-day assessment visit to Miami on April 28th and 29th and experience working with communities similar to Miami. ASSESSMENT FINDINGS • Miami has emerged from the Great Recession with an improving balance sheet: the City has closed the last three fiscal years with a budget surplus and has an improving credit outlook. As both a cause and effect of the City's sounder financial footing, it is experiencing a real estate boom, concentrated primarily downtown and in higher income residential areas, as evidenced by15,000 condominium units planned or in development and construction cranes dotting the downtown skyline. Foreign investment fuels Miami's current growth, a reflection of the City's enduring and perhaps growing global appeal. • Notwithstanding these positive trends, Miami faces serious and worsening poverty and income inequality. Nearly one in three Miamians lives below the poverty line. Households in the bottom 20th percentile in the City have annual income of roughly $10,400, just $11 per person per day on average for a typical sized household. Miami has the third -highest gap in the U.S. between households at the 20th percentile of the income scale and those at the 95th percentile. More than 40 percent of Miami's low- and middle -income renters pay more than half their income just for housing, the highest share in the country. • Educational attainment in Miami is lower than in Miami -Dade County and in the region as whole. Only 22 percent of Miami's population has a bachelor's degree or higher, compared to 26 percent for Miami -Dade County and 29 percent in the region. Fully 30 percent of Miami's population lacks a high school diploma, compared to 21 percent in the County and 16 percent in the region. • The City also faces serious transit and infrastructure challenges. City officials and local economic development leaders universally described worsening traffic, and a need for better mass transit. These are difficult issues for the City to address since the County controls most of the relevant resources and authorities. • Local officials also described a variety of redevelopment needs and challenges in capital planning with respect to City -owned assets, due to dispersed authority across multiple agencies and outmoded data systems. As one example, the Office of Public Facilities manages $1 billion worth of real estate, but apparently lacks sufficient systems for most optimally tracking lease payments. Without a comprehensive and updated inventory of its major capital assets, including City -owned land and buildings, the City may miss opportunities to deploy its capital assets more strategically to promote more development in the communities where it is most needed. Assessment Report Recommendation for Network Assistance City of Miami, FL Page 6 CONFIDENTIAL WORKING DRAFT. SUBJECT TO CHANGE E NETWORK RECOMMENDED TECHNICAL ASSISTANCE FROM THE NEiORK Based on these findings, the Network proposes to work with the City of Miami to develop a neighborhood revitalization strategy- and action plan. The plan will be based, in part, on a comprehensive and updated inventory of the City's major capital assets. Develop a Neighborhood Revitalization Strategy and Action Plan The Network will work with the City to develop a neighborhood revitalization strategy and action plan that will focus on addressing some of the major economic challenges facing the city, including poverty, income inequality and the lack of affordable housing. The Network will work with the City and community stakeholders to identify specific goals during the development of the strategy and plan. The Network developed strategy and action plan would function as a blueprint for future City investment and can be used as a catalyst to develop public -private partnerships to support implementation. Elements of the plan might include recommendations for capital investment in transportation, parks and other infrastructure, as well as programs to develop new housing and other community development initiatives. Develop an Inventory of Key City Property, Land, and Infrastructure Assets An essential tool for the development of the Neighborhood Revitalization Strategy and Action Plan is an inventory of assets currently owned or controlled by the City. At present, this information is difficult to access and - as a result - the City is unable to fully maximize revitalization opportunities in certain neighborhoods. The Network will work with City Manager staff and City agencies to identify, map, and summarize key capital planning data (e.g., location, age, physical condition, more recent improvements, next scheduled improvements, lead City agencies) for the City's major land, buildings, and infrastructure assets. The Network will assist Miami in populating the inventory with updated information on City -owned or controlled property, and would ensure that City staff are trained on the maintenance and use of the inventory. Assessment Report Recommendation for Network Assistance City of Miami, FL Page 7 ARTlDIt CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE RESOURCE ETWORK THE NEED FOR NETWORK ASSISTANCE While the appendix provides a more detailed and comprehensive analysis of some of demographic and socioeconomic conditions in Miami, the following section details the primary specific factors leading to the Network's recommendation. M1AM1 HAS HIGH RATES OF POVERTY AND LOW RATES OF EDUCATIONAL ATTAINMENT Poverty Rate and Income Disparity Despite a strong financial district and booming downtown with approximately 40 development projects either underway or in planning stages, six zip codes have an unemployment rate exceeding 10 percent. While Miami has an international brand and image, nearly one-third of its residents live in poverty - almost twice as high as the region's overall rate. Nearly half of Miami's young people Miami - 46 percent -live in poverty, compared to 28 percent in Miami -Dade County and 24 percent in the region. 50% - 45% - 40% - 35% - 0 30% - a 25% - 20% - • m 15% - 10% - 5% - 0% � � 3 Miami -Dade County Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate A map of the City of Miami's poverty rate across Census Tracts demonstrates the income disparity - the third highest in the nation - with 75 percent of the City's residents living at or below 80 percent of the area median income. A vast majority of the City's Census Tracts have a poverty rate either in excess of 25 percent, or below 5 percent. Similarly, a map of median household income shows that most areas of the City have an annual household income above $75,000 or below $35,000 - very few Census Tracts have an average in between. Assessment Report Recommendation for Network Assistance Page 8 City of Miami, FL CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE REsouRrE NEPNORK Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Per Capita Income & Median Household Income These income disparities may be overshadowed by the high percentage of residents with very -low incomes, especially when compared across the region. The per capita income in Miami of $20,104 is 11 percent lower than per capita income in Miami -Dade County and 28 percent lower than per capita income throughout the region. Similarly, the median household income in Miami of $49,640 is 22 percent lower than the level seen in Miami -Dade County and 28 percent lower than the level seen throughout the region. The difference between these two indicators is due in part to the fact that the average household size in Miami (2.67 persons) is smaller than the average in the County (3.04) or in the MSA (2.78). Per Capita Income and Median Household Income Miami Miami -Dade County ® Per Capita Income ®Median Household Income Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Assessment Report City of Miami, FL Page 9 Recommendation for Network Assistance CONFIDENT/AL WORKING DRAFT. SUBJECT TO CHANGE ESOU E.. NETWORK Affordable Rental Housing and Cost Burdened Renters The City of Miami and the region have enormous affordable housing needs particularly for the City's neediest residents and young professionals. Among renters, Miami has one of the highest percentages of cost -burdened households in the nation, with over 65 percent of residents paying more than 30 percent of their income in rent. Miami also had a 29 percent change in rent from 2000 to 2011 (inflation adjusted) - 11th highest among large cities in the nation. Extreme cost burden is even higher for very low-income renters in Miami, with the average household spending 74 percent of their income on housing. As the map below indicates, few rental units are affordable for low- and moderate income households - those making less than 80 percent of the area median income. Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Educational Attainment Educational attainment in Miami is Tower than in Miami -Dade County and in the region as whole. Only 22 percent of Miami's population has a bachelor's degree or higher, compared to 26 percent for Miami -Dade County and 29 percent in the region. Conversely, 30 percent of Miami's population did not graduate from high school, compared to 21 percent in the County and 16 percent in the region. Assessment Report City of Miami, FL Recommendation for Network Assistance Page 10 CONFIDENTIAL WORKING DRAFT. SUBJECT TO CHANGE RESOURCE NETWORK Percent of Population 100% - 90% - 80% - 70%- 60% - 50% - 40% - 30% - 20% - 10% - Miami iE Bachelor's Degree or Higher ® High School Graduate Educational Attainment Miamt-Dade County Miami MSA ®Associate's Degree/Some College eLess than High School Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate A COMPREHENSIVE AND UPDATED CATALOGUE OF Clip -OWNED CAPITAL ASSETS IS CURRENTLY UNAVAILABLE Local officials described a variety of redevelopment needs and challenges in capital planning with respect to City -owned assets, due to dispersed authority across multiple agencies and outmoded data systems. Without a comprehensive and updated inventory of its major capital assets, including City - owned land and buildings, the City may miss opportunities to deploy its capital assets more strategically to promote more development in the communities where it is most needed. The Office of Public Facilities, for example, manages $1 billion worth of real estate, but apparently lacks sufficient systems for most optimally tracking lease payments. The Department of Planning and Zoning has an antiquated paper -based permit system that makes it difficult to access timely data on projects, assess emerging market issues, and leverage GIS mapping capabilities to provide a clear snapshot of development opportunities that the City may be able to initiate. Both the City's General Services Administration and the Park Department expressed a need for a computerized inventory of the City -owned property under their jurisdiction and facilities management plan to prioritize repairs and maintenance and plan for natural disasters. Assessment Report Recommendation for Network Assistance City of Miami, FL Page 11 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE RECOMMENDATION FOR NETWORK ASSISTANCE goba NETWORK Based on these findings, the Network recommends that it work with the City of Miami to develop a neighborhood revitalization strategy and action plan that will focus on addressing some of the major economic challenges facing the city, including poverty, income inequality and the lack of affordable housing, The Network will work with the City and community stakeholders to identify specific goals during the development of the strategy and plan. The Network developed strategy and action plan would function as a blueprint for future City investment and can be used as a catalyst for public - private partnerships to support implementation. Elements of the plan might include recommendations for capital investment in transportation, parks and other infrastructure, as well as programs to develop new housing and other community development initiatives. To support development of the strategy and action plan, the Network will work with the City to develop an Asset Inventory. The Inventory will include descriptive information (e.g., location, age, physical condition) of the City's major land, building, and infrastructure assets in one central location. Once the inventory is developed, City -owned assets can be mapped easily and merged with existing community development plans. The asset inventory is an essential tool for the City to leverage city - owned property in the creation or modification of neighborhood revitalization strategies. PROJECT KiCK-OFF AND PRELIMINARY DEPARTMENTAL MEETINGS The Network Team will schedule a kickoff meeting with Miami leadership and coordinate with a designated City point of contact to schedule an on -site meeting with City officials (generally, key mayoral staff and department and/or division heads). This meeting will be the start of work on both the neighborhood revitalization strategy and action plan and the asset inventory. Based on the meetings and data collected as part of the assessment team visit, the Network project team will develop a request for additional data and information such as the Capital improvement Plan (CIP) and current neighborhood plans. Task Goals • Establish consensus on the process, key tasks, participants, and timeline with the agencies involved in developing the inventory and action plan for utilizing City property for community and economic development. • Gather and evaluate key planning and capital improvement documents EVALUATION OF CURRENT CONDITIONS AND PRACTICES With information gathered from the Project Kick -Off, the Network will meet with community stakeholders and elected officials to understand current neighborhood needs and priorities. These early stakeholder meetings will begin the process of developing goals for the neighborhood revitalization strategy and action plan. The team will also begin comparing current community and housing needs with existing neighborhood plans and the current CIP. At the same time, the Network will meet with representatives from key City agencies (e.g., Planning, IT, CRA) to gain an understanding of how City -controlled property and capital asset information is catalogued, updated, maintained, and used. The team will determine if multiple databases are maintained by different agencies, document how these databases are populated, and evaluate any asset management inventory systems currently in use by City agencies. Based on the information collected and analyzed, the Network will evaluate whether the City should expand an existing database or create a new Excel or Access -based database. Recommendations will be presented to the City for review and input. Assessment Report Recommendation for Network Assistance City of Miami, FL Page 12 RATIONIL, CONFIDENTIAL WORKING DRAFT SUBJECT TO CHANGE RESOURCE ETWORK Task Goal • Get Input on key community development and housing priorities from key community stakeholders and elected officials • Assess current practices for asset management information and choose a solution (e.g., Excel) for creating the asset inventory DEVELOPING AND BUILDING THE ASSET INVENTORY The Network Team will develop a template for the asset inventory applicable to all city -owned property. Generally, the inventory will include data "fields" such as location, size, use, age, physical condition, recent capital improvements, next scheduled improvements, as well as other "fields" of use and interest to the City. After testing the template with three agencies and making any necessary refinements, the Network Team will work with each agency point of contact to populate the template with each agency's capital asset information. Finally, the Network Team will aggregate each agency's information into a single database (inventory). The Network team will also work with and train an employee of the City of Miami, so that the Network can build and transfer the capacity to operate and maintain the Inventory to the City. Additionally, multiple check -ins will occur with City staff via conference call or WebEx, and a set of preliminary and final findings will be presented directly to City leadership. Task Goal • Complete and deliver asset inventory to the City. • Ensure that City personnel are trained to use and update asset inventory. MAPPING OF PROPERTY INVENTORY OVERLAY WITH KEY COMMUNITY ASSETS The Network will work with the City's GIS staff to map both the property Inventory as well as key assets that can be used to leverage the value of this City property. This asset map of major City - owned capital assets will assess at a high level current market conditions and major redevelopment activities planned or underway in each neighborhood. The Network team will then identify a set of specific opportunities to use City -owned assets for catalytic community development in the near term. The Network will also provide a series of community maps that will help illustrate demographic, economic, and social indicators. This includes physical assets such as transit and health facilities as well as recreation and cultural assets. This work will inform both the property inventory action plan and the strategy for developing linkages to both catalyze neighborhood redevelopment and provide for broader economic opportunity for residents throughout the city. Task Goal • Develop asset map that identifies City property inventory • Identify key assets in each neighborhood that can be used to leverage redevelopment and re- use opportunities ACTION PLAN FOR DEPLOYING CiTY-OWNED CAPITAL ASSETS FOR COMMUNITY DEVELOPMENT Concurrent with the development of the asset inventory and mapping, the Network team will work with City to develop overall criteria for assessing and developing key city assets for community development. Supported by the data -driven analysis of neighborhood indicators and key capital assets, the Network will assist the City in identifying activity and development deemed to be catalytic in specific neighborhoods. The team will also recommend a strategy that assists the City in determining whether to hold, sell, or redevelop key city assets, based on local market conditions and the opportunity to leverage private and other public resources. Combined with the analysis of the current Capital Improvements Plan (CIP) and Neighborhood Plans, the team will be able to help Assessment Report Recommendation for Network Assistance City of Miami, FL Page 13 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE RESOURE :ETWORK identify which City property are best suited for housing and community development activities, and which neighborhoods provide the best opportunity for catalytic community development. The Network team will meet with agency heads, neighborhood planners, and elected officials to review and revise the city asset strategy. The Network will also work with the City to convene community stakeholders that focus on housing and community development needs for feedback on the asset development strategy, This work will support Miami's efforts in tying its asset redevelopment strategy to a broader strategy for creating economic opportunity across the City, and the integration of these two initiatives will amplify the City's efforts on utilizing capital assets for neighborhood revitalization. Finally, the Network will help the City identify corporate, non-profit, and foundation partners to encourage public -private partnerships that will help integrate the proposed strategy and action asset plan to existing strategies and initiatives that foster greater economic opportunity across Miami. Task Goal • Provide City with a strategy document that outlines priority recommendations for property redevelopment and re -use • Assist the City in presenting the asset development strategy to key corporate, non-profit, and foundation partners PROJECT DURATION AND ESTIMATED COST The project team will begin work on the project by late November and anticipates project completion by the end of May 2015. The proposed timeline and key milestones to complete the project are: • Late November 2014 o Project kickoff, interviews, and initial document review o Begin discussions on design for property inventory iT solution. o Begin discussions on City priorities for neighborhood redevelopment activity • Early December 2014 o Begin data collection with agencies for inventory development o Finalize plan for how asset inventory will be reported (e.g. use of existing software, Excel or Access) o Begin analysis of key City data and neighborhood indicators to identify opportunities for catalytic community development activities • Mid -December 2014/Early January 2015 o Begin population of property inventory o Begin training of city staff on use of property inventory, including maintenance and updating o Begin outreach to neighborhood planners and city commissioners o Review Capital Improvements Plan and Neighborhood Plans • Late January/Early February 2015 o Finalize work with agencies on inventory o Finalize training of city staff on use of property inventory o Add community assets to property inventory GIS map Assessment Report Recommendation for Network Assistance City of Miami, FL Page 14 Ii4T10EliAL. CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE o Begin convening of community stakeholders for input on economic and community development needs .OE NETWORK • Early March 2015 o Finalize criteria for assessing City property included in inventory o Complete asset inventory and present to.City leadership o Begin outreach to private partners on linkages to broader economic opportunity • Late March 2015 o Begin development of outline for linkages to specific projects and partners • May 2015 o Complete integration strategy for city -owned assets and broader economic opportunity o Present integration strategy to City and key private and funding partners The total projected cost of the engagement is estimated to be approximately $200,000 plus an estimated $22,000 in travel costs. The Network will fund $150,000 of the cost of the engagement, along with 75 percent of all travel costs. The City of Miami will be responsible for funding, or raising funds from third parties in the amount of, $50,000 of the cost of the engagement and 25 percent of all travel costs ($5,500), for a total of $55,500. The budget for each task is as follows (including travel costs): Development of Neighborhood Revitalization Strategy and Action Plan: $128,000 Creation and mapping of city -owned Asset Inventory: ' $94,000 Total: $222,000 Network's share of expenses (75%): City of Miami's share of expenses (25%): $166,500 $55,500 Assessment Report Recommendation for Network Assistance City of Miami, FL Page 15 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE APPENDIX REVIEW OF BASELINE FINANCIAL CONDITIONS 4i7GR11L'.3 �c RESOURCE NETWORK Revenue and Expenditure Trends From FY2009 to FY2013, the City's General Fund revenues grew 14 percent, from $471.5 million to $538.4 million. Over the same period, expenditures declined 8 percent, from $526.6 million to $482.2 million. In FY2009 and FY2010, the City finished the year in deficit with expenses outpacing revenues. In each instance, the City made up the imbalance primarily by drawing on its fund balance reserves. This trend began to reverse in FY2011 as revenues began to outpace expenditures and the City was able to begin restoring its fund balance reserves ($75.5 million in FY2013). In FY2014, the City has an adopted operating budget of $524.9 million. $600 0 0 i $550 $500 $450 $400 $350 $300 General Fund Revenues vs. Expenditures, FY2010 - FY2013 526.6 471.5 538.4 482.2 FY2009 Actual FY2010 Actual FY2011 Actual FY2012 Actual FY2013 Actual ®General Fund Total Revenues Fund Total Expenditures The City's primary revenue source is property taxes, which comprised 39 percent of its FY2013 General Fund actual revenues. Franchise and other taxes and charges for service both comprised 19 percent, respectively, of FY2013 General Fund revenues. As is the case with many local governments, funding for public safety operations accounted for the majority of Miami's General Fund expenditures, at 57 percent for FY2013. Funding for general government operations and public works, at 20 percent and 13 percent respectively, accounted for most of the City's remaining General Fund expenditures. Assessment Report City of Miami, FL Appendix Page 16 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE General Fund Revenue Sources, FY2013 Actual Charges for Service 20% Intergovernmental Revenues 11% Fines and Forfeitures 2% Licenses and Permits 7% Investment Earnings 0% Franchise and Other Taxes 20% Property Taxes 40% Source: City of Miami, FY2013 Comprehensive Annual Financial Report General Fund Expenditures by Type, FY2013 Actual Parks and Recreation Public Facilities b% Public Safety 57%;<� _rT Public Works 13% General Government 20% Planning and Development 3% Source: City of Miami, FY2013 Comprehensive Annual Financial Report RESOURCE RU N Assessment Report City of Miami, FL Appendix Page 17 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE RESOU E NETWORK Pension and OPEB Trends The Citysponsors two primary retirement plans that cover its employees: the City of Miami Fire Fighters and Police Offers Retirement Trust (FIPO) and the City of Miami General Employees and Sanitation Employees Retirement Trust (GESE). From FY2009 to FY2013, the combined cost to the City for these plans has increased 17.9 percent, from $120.4 million to $142 million. The City's pension costs rose sharply between FY2009 and FY2010, increasing by $18.1 million or almost 50 percent. The City Commission adopted pension reforms in 2010 that have resulted in a reduction in costs; pension contributions decreased by 10 percent or $15.7 million between FY2010 and FY2013. During the last five fiscal years, the City has consistently contributed the full annual required contribution (ARC) for both plans. Based on 2012 actuarial valuations, the FIPO plan is 73 percent funded and the GESE plan is 65 percent funded. $60 c 0 E. $50 Pension Funding Trends, FY2009 - FY2013 y. $40 $30t $20 $10 = _ ,, x.� mac • [[�. FY2009 • FIPO ARC FY2010 MI FIPO Contribution FY2011 • GESE ARC • GESE FY2012 FY2013 Contribution Source: City of Miami, FY2010-FY2013 Comprehensive Annual Financial Reports The City also provides retiree healthcare benefits to eligible retirees and their dependents through two plans: one plan is for retired police officers and the other plan is for all other retired employees. The City funds OPEB on a pay-as-you-go basis. In FY2013, the City contributed $5.6 million to fund OPEB for police retires, compared to an annual cost of $32.7 million, and contributed $3.6 million to fund OPEB for non -police retirees, compared to an annual cost of $14.6 million. OPER Funding Comparison FY2013 Actual Police Contribution Non -Police ARC Non -Police Contribution Source: City of Miami, FY2013 Comprehensive Annual Financial Report Assessment Report City of Miami, FL Appendix Page 18 AMINE CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE NETWORK Bond Rating Trends Both Moody's and S&P recently affirmed or maintained adequate to strong ratings for the City's long- term general obligation bond rating, though Moody's affirmed its A2 rating with a negative outlook due to high fixed costs, recent turnover in key finance positions and an SEC investigation. As Moody's notes: "despite two years of positive financial operations, a projected operating deficit for fiscal 2013 and a budgeted operating deficit for fiscal 2014 points to renewed structural imbalance." Moody's A2 / Negative 4/24/ 2013 1. Major trade and service center for the Southeast 2. Reduced, but still sizable, tax base 1. Maintaining structural financial balance and rebuilding services 2. Severity of housing market correction 3. Key city management turnover S&P BBB / Positive 11/26/ 2013 1. Strong regional economy 2. Increased budget flexibility and performance 3. Strong liquidity 1. Weak management conditions 2. Very weak debt and contingent liabilities position Sources: S&P 11/26/2013 and Moody's Investor Service 4/24/2013 REVIEW OF BASELINE ECONOMIC CONDITIONS Unemployment Trends Unemployment rates in Miami have closely mirrored but remained higher than unemployment rates in Miami -Dade County or the Miami -Fort Lauderdale -Pompano Beach MSA. The City's annual average unemployment rate peaked in 2010 at 13.6 percent, and subsequently dropped to 9.5 percent in 2013,.a decrease of over four percentage points. During the same time period, Miami -Dade County and the MSA saw comparable percentage point decreases, resulting in 2013 average unemployment rates of 8.4 percent and 7.3 percent respectively. From 2009 to 2013, the annual unemployment rate in Miami improved from 12.5 percent to 7.6 percent. Over this time, Miami -Dade County experienced a drop in unemployment from 11.9 percent to 6.8 percent. The MSA's unemployment rate dropped from 10.9 percent to six percent during this period. As of May 2014, Miami's unemployment rate was 8.9 percent. Assessment Report City of Miami, FL Appendix Page 19 1.0101. CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE Source: US Bureau of Labor Statistics, Annual Average Unemployment Rate 2003-2013 NETWORK EMPLOYMENT BY INDUSTRY TRENDS Between 2002 and 2011, the Miami MSA saw significant growth in the Education and Health Care sector, which increased by 42 percent, or roughly 104,000 employees. The MSA also saw strong growth in the Knowledge and Office sector, which grew by roughly 129,000 employees, a 32 percent increase. Conversely, the region saw a significant decline in the Agriculture, Mining, Utilities and Construction sector, which decreased by roughly 36,000 employees, a 32 percent decline. The Manufacturing, Wholesale and Transportation sector also decline by roughly 42,000 employees, a 14 percent drop. Source: US Census Bureau, Country Business Patterns US Employment Data 2002 and 2011 REVIEW OF BASELINE DEMOGRAPHIC CONDITIONS Population Change 2000 to 2010 Between 2000 and 2010, population growth in the Miami region outpaced the nation: the city's population increased 10.2 percent, Miami -Dade County's population increased 10.8 percent and the MSA's population increased 11.1 percent. As of the most recent one-year population estimate for 2013, Miami has a population of 417,650. Assessment Report City of Miami, FL Appendix Page 20 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE 11.5% 1 1.0% a 10.5% - s U. u 10.0% - 9.5% - 9.0% Miami Population Change, 2000 - 2010 Miami -Dade County Miami MSA USA Source: US Census Bureau, 2000 and 2010 Decennial Census RESOD NETWORK Population by Age In Miami, 59 percent of residents are under the age of 44 - essentially the same share of population as in Miami -Dade County (60 percent) and the MSA (58 percent). In general, Miami has an older population than the County, the MSA, or the nation. Only 16.3 percent of the City's population is younger than 16 years old, compared to over 19 percent in the County and MSA and 21.2 percent nationwide. The senior population (over 65 years) represents 16 percent of the City's residents, compared to 14.1 percent in the County and 13 percent nationwide. Source: US Census Bureau, 2010 Decennial Census Assessment Report City of Miami, FL Appendix Page 21 CONFIDENTIAL WORKING DRAFT SUBJECT TO CHANGE RESOD E N TWR Per Capita Income & Median Household Income The per capita income in Miami of $20,104 is 11 percent lower than per capita income in Miami -Dade County and 28 percent lower than per capita income throughout the region. Similarly, the median household income in Miami of $49,640 is 22 percent Tower than the level seen in Miami -Dade County and 28 percent lower than the level seen throughout the region. The contrast between these two indicators is due in part to the fact that the average household size in Miami (2.67 persons) is smaller than the average in the County (3.04) or in the MSA (2.78). $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 Per Capita income and Median Household Income Miami Miami•Dade County Per Capita Income ©Median Household Income Miami MSA Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Poverty Rate At 32 percent, the poverty rate in Miami is significantly higher than in Miami -Dade County and throughout the region. Most strikingly, 46 percent of Miami youth live in poverty, compared to 28 percent in Miami -Dade County and 24 percent in the region. 50% - 45%- 40% - t 35% - m 0 30% .c 25% - y 20% - u a 15% - 10% - 5% - Miami Poverty Rate Miami -Dade County Miami MSA El All people ® Under 18 years ® 65 years and over Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Assessment Report City of Miami, FL Appendix Page 22 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE REseuRGE NETWORK Median Horne Value Homeownership costs tend to be significantly higher in the City of Miami compared to the County or the MSA. The median home value in Miami of $202,100 is seven percent higher than in Miami -Dade County and 1 percent higher than in the MSA. Miami's elevated median home value is particularly noteworthy because the City housing supply also has a lower median number of rooms (3.9) compared to the County (4.6 rooms) and the MSA (4.7 rooms). As a result, in terms of home value per room, the City's median ($51,820) is 27 percent higher than the County's median and 33 percent higher than the MSA's median. Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Median Rent The median rent value in Miami of $922 is 13 percent lower than the median rent value in Miami - Dade County and 16 percent lower than the median rent value in the MSA. However, the city's relatively high proportion of low income renters undermines this relative housing affordability. According to the 2010-2012 American Community Survey, 57.8 percent of Miami renters had gross housing costs that exceeded 35 percent of their income, compared to 56.8 of County renters and 54,1 percent of MSA renters. $1,100 - $1,050 - $1,000 - $950 - $900 - $850 - $800 Median Rent Miami Mlami-Dade County Miami MSA Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Assessment Report City of Miami, FL Appendix Page 23 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE Age of Housing Stock Across Miami, Miami -Dade County and the MSA, 26 percent to 29 percent of the housing stock was built after 1990. However, 27 percent of Miami's housing stock was built prior to 1949, compared to 10 percent of the County's housing stock and just five percent of the region's housing stock. These findings indicate that the City experienced a housing development boom in the last 20 years that was comparable to that of the rest of the region, but that between the 1950s and the 1980s most housing construction activities occurred in the growing suburbs. 100% 90% 80% 70% 60% - 50% - 40% - 30% - 20% - 10% - 0% Age of Housing Stock Miami Miami -Dade County Miami MSA is Pre 1949 tg 1950 - 1969 ®1970 - 1989 D Past 1990 Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Percentage of Renters vs. Owners Only 32 percent of occupied housing units are owner -occupied in Miami, compared to 56 percent in Miami -Dade County and 63 percent in the region. 100% 90%- 80% - 70% - 60% - 50% - 40% - 30% - 20% - 10% - 0% Miami -Dade County ® Owner -occupied ® Renter -occupied Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Assessment Report City of Miami, FL Appendix Page 24 CONFIDENTIAL WORKING DRAFT SUBJECT TO CHANGE RESOURCE NETWORK Educational Attainment Educational attainment in Miami is lower than in Miami -Dade County and in the region as whole. Only 22 percent of Miami's residents over the age of 25 have earned a bachelor's degree or higher, compared to 26 percent for Miami -Dade County and 29 percent in the region. Conversely, 30 percent of Miami's population did not graduate from high school, compared to 21 percent in the County and 16 percent in the region. 100% - 90% - 80% - 70% - 60% - 50% - 40% - 30% - 20% - 10% - 0% Miami Miami -Dade County Miami MSA ®Bachelor's Degree or Higher ElAssociate's Degree/Some College ®High School Graduate IS Less than High School Source: US Census Bureau, American Community Survey 2010-2012 3-Year Estimate Graduation Rate Recent graduation rates for Miami -Dade County Public Schools - the school district that serves city residents - have improved from 71 percent to 77 percent in the last three years. M-DCPS graduation rates have also slightly outpaced the statewide average from 2011 to 2013. Source: Florida Department of Education Assessment Report City of Miami, FL Appendix Page 25 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE taloAdak RESOURCE NETWORK ACT Scores The average ACT score for M-CDPS students from 2011 to 2013 is 18, compared to 19.3 statewide duringthis period. Source: Florida Department of Education State Assessment Test Scores: Reading The most recent scores for the reading assessment given in 4th and 8th grades for M-CDPS students roughly mirror the statewide average. 41 percent of M-DCPS 4th grade students and 45 percent of M- DCPS 8th grade students score below satisfactory or inadequate. .., +T.._. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ®Inadequate le Below Satisfactory ®Satisfactory tE Above Satisfactory Ma story Source: Florida Department of Education Assessment Report City of Miami, FL Appendix Page 26 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE R. . E ETWORK State Assessment Test Scores: Math State test scores for the math assessment given in 4th grade show that M-DCPS students perform at roughly the same level as school districts statewide. However, the math assessment given in St" grade shows a significantly larger portion of M-CDPS students scoring inadequate, 37 percent, than school districts statewide: only 1 percent of M-CDPS St" grade students scored at the mastery level. "'i%a .fir--'-1 - - - 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Ili Inadequate Et Below Satisfactory ®Satisfactory DAbove Satisfactory °Mastery Source: Florida Department of Education Property Crime Rate From 2002 to 2012, Miami's property crime rate decreased 24 percent, from 7,050 crimes per 100,000 residents to 5,375 crimes per 100,000 residents. During this time, Miami -Dade County's property crime rate - not including crimes reported by the Miami Police Department or Miami's population - declined 44 percent and was significantly lower than the city's property crime rate. It is also worth noting that the City experienced a spike in property crime in 2010 and 2011 that was not accompanied by a comparable spike in County property crime. 8000 7000 0 0 6000 — 0 m 5000 — c 2 4000 — a ce 3000 — 2000 c 1000 ' 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 °Miami Police Department ■Metro -Dade Police Department Source: FBI Uniform Crime Reporting Statistics 2002-2012 Note: Miami -Dade per capita rate is based on Miami -Dade County population without Miami city population Assessment Report City of Miami, FL Appendix Page 27 m 0 m le u` CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE Violent Crime Rate From 2002 to 2012, Miami's violent crime rate declined 39 percent, from 1,907 crimes per 100,000 residents to 1,172 crimes per 100,000 residents. Duringthis time, Miami Dade County's violent crime rate - not including crimes reported by the Miami Police Department or Miami's population - declined 55 percent and was significantly lower than the city's violent crime rate. 2500 c. 0 e 2000 0 0 0 0 m 1500 c 1000 a 500 Violent Crime Rate, 2002-2012 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ®Miami Police Department ■Metro -Dade Police Department Source: FBI Uniform Crime Reporting Statistics 2002-2012 Note: Miami -Dade per capita rate is based on Miami -Dade County population without Miami city population Murder Rate From 2002 to 2012, Miami's murder rate declined 2 percent, from 17.1 murders per 100,000 residents to 16.7 murders per 100,000 residents. Duringthis time, Miami Dade County's murder rate - not including crimes reported by the Miami Police Department or Miami's population - declined 23 percent (from 4.8 per 100,000 to 3.7 per 100,000) and was significantly lower than the city's murder rate. 25.0 e 20.0 a- 0 0 0 00 15.0 • 10.0 ▪ 5.0 Murder Rate, 2002-2012 0.0 " =� =+ (i r» = , 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Miami Police Department III Metro -Dade Police Department Source: FBI Uniform Crime Reporting Statistics 2002-2012 Note: Miami -Dade per capita rate is based on Miami -Dade County population without Miami city population Assessment Report City of Miami, FL Appendix Page 28 CONFIDENTIAL WORKING DRAFT: SUBJECT TO CHANGE RESOURCE 4ETWORK Health Outcomes It appears that Miami -Dade County's health outcomes are roughly in line with the state's health outcomes. When compared to top national performers, Miami -Dade County has a higher rate of premature death (years of potential life lost before age 75 per 100,000 population), has a higher rate of the population experiencing poor or fair health, and has a higher low birth rate. Premature Death Poor or Fair Health Low Birth Rate edit comes, w Miami -Dade County Florida 5,916 16% 9% 7,310 16% 9% �. Top U.S. Performers 5,317 10% 6% Source: Robert Wood Johnson Foundation, County Health Rankings and Roadmaps 2014 HEALTH BEHAVIORS Indicators of health behaviors in Miami -Dade County indicate the County's population is roughly in line with the State's overall population. Adult obesity in the County is four percent lower, while the rate of physical inactivity is the same. The teen birth rate in the County is slightly lower than the State's rate, though it is higher than top national performers. Adult Obesity Physical Inactivity Teen Birth Rate Miami -Dade County Florida 22% 24% 32 26% 24% 38 Top U.S. Performers 25% 21% 20 Source: Robert Wood Johnson Foundation, County Health Rankings and Roadmaps 2014 CLINICAL CARE Miami -Dade County has a relatively high proportion of residents without health care insurance (34 percent), which may correlate to comparably weak access to medical care. For example, only 57 percent of eligible Miami -Dade women receive a mammography screening compared to 68 percent statewide, and the number of preventable hospital stays (Hospitalization rate for ambulatory -care sensitive conditions per 1,000 Medicare enrollees) was almost 40 percent higher than the corresponding statewide figure. nical Gate a . _ . __ -:• _ .. ., Uninsured Population Preventable Hospital Stays Mammography Screening Miami -Dade County Florida 34% 89 57% Top U.S. Performers 25% • 11% 64 46 68% 71% Source: Robert Wood Johnson Foundation, County Health Rankings and Roadmaps 2014 Assessment Report City of Miami, FL Appendix Page 29