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HomeMy WebLinkAboutO-14152City of Miami Ordinance 14152 Legislation City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com File Number: 13191 Final Action Date: 2/23/2023 AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER 18/ARTICLE IX/DIVISION 2 OF THE CODE OF THE CITY OF MIAMI, FLORIDA, AS AMENDED ("CITY CODE"), TITLED "FINANCIAL INTEGRITY PRINCIPLES," MORE SPECIFICALLY AMENDING THE RESERVE POLICIES, FINANCIAL OVERSIGHT AND REPORTING, EVALUATION COMMITTEES, BASIC FINANCIAL POLICIES, AND OTHER PROVISIONS OF SECTION 18-542 OF THE CITY CODE; CONTAINING A SEVERABILITY CLAUSE; PROVIDING FOR AN IMMEDIATE EFFECTIVE DATE. SPONSOR(S): Commissioner Manolo Reyes WHEREAS, pursuant to Section 18-541 of the City of Miami Code of Ordinances, as amended (City Code"), the City of Miami's Financial Integrity Principles shall be reviewed and updated as necessary; and WHEREAS, the City of Miami ("City") believes that it is in the best interest to adopt these amendments to and update the City's Financial Integrity Principles; 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 of the Code of the City of Miami, Florida, as amended, is amended in the following particulars:1 "CHAPTER 18 FINANCE ARTICLE IX. FINANCIAL POLICIES DIVISION 2. FINANCIAL INTEGRITY PRINCIPLES 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. City of Miami Page 1 of 7 File ID: 13191 (Revision:) Printed On: 6/26/2025 File ID: 13191 Enactment Number: 14152 Sec. 18-542. Financial integrity principles. The following financial integrity principles are hereby adopted: (1) Structurally balanced budget. The city shall maintain a structurally -balanced budget. Recurring revenues will fund recurring expenditures. (2) Revenue estimating conference process. The city shall adopt budgets and develop its long and short-term financial plans utilizing a professional revenue estimating conference process. Conference principals shall include, but not be limited to one principal from the city's budget office; one principal from the city's finance department; and two non -staff principals with public finance expertise. Interfund borrowing. The city shall not borrow or use internal fund transfers to obtain cash from one fund type or reserve to fund activities of another fund type or reserve unless such use is deemed lawful, and unless the revenue estimating conference has determined that (a) the funds to be loaned will not be needed during the lending period, and (b) the funds for repayment will be available within a two-year period. Any actions taken to borrow funds under these conditions must be separately presented to and approved by the city commission and the term of such borrowing shall not extend beyond the last day of the subsequent fiscal year. Recognizing that some programs are funded by grants or other entities on a reimbursement basis, the city shall apply for such reimbursements on a timely basis to minimize the period that city funds are used as float. In the event loans/float for these reimbursements extend beyond the end of a fiscal year, such reimbursements shall be reflected as receivables in the comprehensive annual comprehensive financial report (GACFR) to the extent allowed under accounting principles generally accepted in the United States of America (GAAP). The department of finance shall make a quarterly determination of the amount of expenses incurred which may not be reimbursable under these programs. A quarterly report of expenses incurred but not reimbursable shall be presented to the city commission, together with the actions needed to avoid project deficits. (4) For purposes of this section: "city-wide surplus for any fiscal year" is defined as the increase in unreserved general fund balance as reflected in the city's GACFR; "city- wide deficit for any fiscal year" is defined as the decrease in unreserved general fund balance as reflected in the city's GACFR; and "budget surplus of any office, department or elected official" is defined as the excess of budgeted expenses over actual expenses in any fiscal year. Notwithstanding anything to the contrary in this section, the total amount of budget surplus to be added to designated reserves and special revenue funds pursuant to this section (together, the "rollover amounts") is limited to city-wide surplus for any fiscal year. In the event the rollover amounts would result in a city-wide deficit, then each budget surplus within the rollover amounts shall be reduced proportionately so the city's GACFR} will reflect no change in undesignated, unreserved general fund balance. In the event that a city-wide deficit would result before effecting the rollover amounts in any fiscal year, then no rollover amounts shall be available. a. Budget surpluses in an elected official's budget in any fiscal year shall be reflected as designated reserves at the end of the fiscal year in which such surplus arose and be appropriated for discretionary use of such elected official for the following fiscal year. (3) City of Miami Page 2 of 7 File ID: 13191 (Revision:) Printed on: 6/26/2025 File ID: 13191 Enactment Number: 14152 (5) b. Budget surpluses of the parks and recreation department shall be allocated, as of the end of the fiscal year in which such surplus arose, to a parks and recreation department special revenue fund. Allowed expenditures from the parks and recreation department special revenue fund shall be limited to the purchase of parks recreational and maintenance equipment, capital improvements for the city's parks, and the direct operations of recreational programs in and for the city's parks, subject to appropriation by the city commission. c. Budgeted surpluses of the department of real estate and asset management shall be allocated, as of the end of the fiscal year in which such surplus arose, to a public facilities special revenue fund. Allowed expenditures of the public facilities special revenue fund shall be limited to capital improvements for the city's public facilities, subject to appropriation by the city commission. d. Budgeted surpluses of the department of innovation and technology shall be allocated, as of the end of the fiscal year in which such surplus arose, to an IT strategic plan special revenue fund. Allowed expenditures of the IT strategic plan special revenue fund shall be limited to expenditures, excluding those related to permanent city staff, necessary for the implementation of the city's information technology strategic plan, subject to appropriation by the city commission. Department names may change from time to time. This section shall be applicable to those departments regardless of its designation in a given fiscal year. 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 fifty percent (50%) of the liabilities of the long-term liabilities (excluding bonds, loans, and capital lease payables) as reflected in the city's GACFR3. Amounts not needed to satisfy the 50 fifty percent (50%) requirement shall be considered general fund unassigned fund balance reserve and be treated in accordance with subsection (5)b below. b. General fund unassigned fund balance reserves. The city shall retain unassigned fund balance reserves equal to a threshold ten percent (10%) of the prior three gj years' average of general revenues (excluding transfers). Amounts designated as "contingency" reserve in subsection 5a. above shall be included in the calculation of meeting the ten percent (10%) of the prior three j 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 (10%) threshold, the city commission shall adopt a plan to achieve the threshold within two (2) 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 City of Miami Page 3 of 7 File ID: 13191 (Revision:) Printed on: 6/26/2025 File ID: 13191 Enactment Number: 14152 (6) (7) titled "Budget." Amounts in excess of the ten percent (10%) 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 designated fund balance reserves. The city shall retain designated fund balance reserves equal to ten percent (10%) of the prior three j years average of general revenues (excluding transfers). The designated fund balance reserves shall be classified as either non -spendable, restricted, committed, or assigned and such designation shall be based on standards and guidance established, and amended from time to time, by the Governmental Accounting Standards Board (GASB). 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 fifty percent (50%) of such the liabilities are funded. Other designated reserves may be drawn upon without the need for replenishment. Proprietary funds. The city shall establish proprietary funds only if the costs to provide the service are fully funded from the charges for the service. Multi -year financial plan. The city commission shall annually adopt a five-year financial plan by September 30 of each year, reflecting as the base year, the current year's budget. For fiscal year 2004 the multi -year financial plan will be adopted no later than thirty 1301 days after the completion of labor negotiations. Such plan will include cost estimates of all current city operations and pension obligations, anticipated increases in operations, debt service payments, reserves to maintain the city's officially adopted levels of reserves and estimated recurring and non -recurring revenues. This plan will be prepared by fund and reflect forecasted surpluses or deficits and potential budget balancing initiatives, where appropriate. (8) Multi -year capital improvements plan. a. Annual review and adoption. The city commission shall annually adopt a capital improvements plan ("CIP") simultaneously with the adoption of the city's final budget pursuant to F.S. § 200.065. The CIP shall address cost estimates for all necessary infrastructure improvements needed to support city services, including information technology, with an adequate repair and replacement ("R&R") component. Funded, partially funded and unfunded projects shall be clearly delineated. The CIP shall be detailed for the current fiscal year and for five additional years and, if practicable, additional required improvements aggregated for two gj additional five-year periods. To the extent feasible, department heads shall be required to submit independent needs assessments for their departments for use in preparing the CIP. The CIP will include and identify revenue sources and unfunded projects. The CIP shall include estimates of the City of Miami Page 4 of 7 File ID: 13191 (Revision:) Printed on: 6/26/2025 File ID: 13191 Enactment Number: 14152 (9) operational (including maintenance) impacts produced for the operation of the capital improvements upon their completion. The CIP shall include a component reflecting all on -going approved capital projects of the city, amount budgeted, amount spent since the start date, remaining budget, and estimated completion date. Approved projects shall be reviewed and addressed in the CIP annually. Beginning in fiscal year 2019-2020, all future capital project funding amounts shall be budgeted and reflected in the CIP in $1,000.00 increments. Delegation of authority to city manager regarding completed projects and cancelled projects; quarterly reporting. The city commission hereby delegates to the city manager the authority, on a quarterly basis, to sweep funds from the project accounts of all completed projects and all cancelled projects with remaining fund balances of less than $100,000.00 in unexpended funds into the citywide non -departmental capital outlay reserve accounts. The city manager shall endeavor to move such funds into active, capital projects with current shortfalls within the same commission district from which the funds had previously been budgeted. The city manager and the budget director shall provide written quarterly reports for the previous quarter just ended to the city commission of all such amounts of unexpended funds from the project accounts of all completed projects and all cancelled projects that have been swept from such project accounts into the citywide non -departmental capital outlay reserve accounts. Debt management. The city shall manage its debt in a manner consistent with the following principles: a. Capital projects financed through the issuance of bonded debt shall be financed for a period not to exceed the estimated useful life of the project. b. The net direct general obligation debt shall not exceed five percent (5%) and the net direct and overlapping general obligation debt shall not exceed ten percent (10%) of the taxable assessed valuation of property in the city. c. The weighted average general obligation bond maturity shall be maintained at fifteen (151 years or less. d. Special obligation debt service shall not exceed 20 twenty percent (20%) of non - ad valorem general fund revenue. e. Revenue based debt shall only be issued if the revenue so pledged will fully fund the debt service after operational costs plus a margin based on the volatility of the revenues pledged. (10) Financial oversight and reporting. The city shall provide for the on -going generation and utilization of financial reports on all funds comparing budgeted revenue and expenditure information to actual on a monthly quarterly and year-to-date basis. The finance department shall be responsible for issuing the monthly reports to departments, the mayor, and city commission, and any information regarding any potentially adverse trends or conditions. These reports should be issued within thirty 1301 days after the close of each month. The independent external auditor shall prepare the city's GACFR by March 31 st of each year. The single audit and management letter of the city shall be prepared by the independent external auditor by April 30th of each year. The independent external auditor shall present the findings and recommendations of the audit, single audit, and City of Miami Page 5 of 7 File ID: 13191 (Revision:) Printed on: 6/26/2025 File ID: 13191 Enactment Number: 14152 management letter, to the mayor and city commission at a scheduled commission meeting prior to July 30th of each year. Financial reports, offering statements, and other financial related documents issued to the public, shall provide full and complete disclosure of all material financial matters. (11) Basic financial policies. The city shall endeavor to maintain formal policies, that shall be reviewed and updated as necessary, which reflect "best practices" in the areas of: a. Debt. Such policy shall address affordability, capacity, debt issuance, and management. b. Cash management and investments. Such policy shall require 24-month gross and net cash -flow projections by fund and address adequacy, risk, liquidity, and asset allocation issues. c. Budget development and adjustments. Such policy shall establish proper budgetary preparation procedures and guidelines, calendar of events, planning models by fund, budget adjustment procedures, establishment of rates and fees, indirect costs/interest income and the estimating conference process. The proposed budget should be scheduled to allow sufficient review by the mayor and city commission while allowing for sufficient citizen input. The city budget document reflecting all final actions as adopted by the city commission on or before September 30th of each year, shall be printed and made available within sixty (601 days of such adoption. d. Revenue collection. Such policy shall provide for maximum collection and enforcement of existing revenues, monitoring procedures, the adequacy level of subsidy for user fees, and write-offs of uncollectible accounts. e. Purchasing policy. Such policy shall establish departmental policies and procedures and provide appropriate checks and balances to ensure that city departments adhere to the city's purchasing policies. (12) Evaluation committees. a. Solicitations. (i) The city commission, as the governing body of the city, shall establish an independent external auditor selection committee in accordance with the requirements of, to undertake, and to follow the processes and procedures required by F.S. § 218.391(1) (3), as amended, and by Sec. 18-122 of this Code, for solicitations through requests for proposals, evaluations, rankings, and recommendations to the city commission for the city's independent external auditors to conduct the City's annual financial audit required by F.S. § 218.39, as amended. On each occasion that there is a competitive solicitation for selection of an independent external auditor pursuant to this section, the city commission will appoint one of its members, on a rotating basis, to serve as the chair of the selection/evaluation committee. The city commission shall then follow the requirements of F.S. § 218.391(4) (6) and (9) as am d for selection of and contract negotiations rind minima im �7 a-�-�rrTeicrvr �cn.. ccrorr-vrurrcrcvrrcra cc-rrcyv crurry contract terms, conditions, and provisions For an y fiinal contract executed pursuant to F.S. § 21-8.39147) and (8) as amended ^,ith ran„ inrlor endent external auditor selected to conduct the city's annual financial audit required in F.S. § 218.39, as amended. City of Miami Page 6 of 7 File ID: 13191 (Revision:) Printed on: 6/26/2025 File ID: 13191 Enactment Number: 14152 (ii) For all other solicitations, an evaluation committee, consisting of a majority of citizen and/or business appointees from outside city employment, shall be created, to the extent feasible, to review city solicitations ("requests for proposals," "requests for qualifications," etc.). The recommendation(s) of the evaluation committee shall be provided to the mayor and city commission on all such solicitations prior to presentation to the city commission for official action. b. Collective bargaining agreements. The city's finance committee, established pursuant to city commission resolutions nos. R-98-631,.a R-98-767, and R-03- 1216, and the budget director shall review and provide recommendations to the city manager regarding all memorandums of understanding (M.O.U.$) entered into between the city and any collective bargaining unit that amend, alter, or modify any existing collective bargaining agreement and that may have a fiscal impact of $500,000.00 or more, and all collective bargaining agreements. The finance committee shall provide its recommendations regarding such M.O.U.s and collective bargaining agreements to the city manager not less than fourteen 041 days prior to consideration by the city commission of any said M.O.U. or collective bargaining agreement for ratification. In the event that the finance committee is unable to meet within the timeframes provided herein, then the city manager shall proceed to the city commission for ratification. (13) Full cost of service. The city shall define its core services and develop financial systems that will determine on an annual basis the full cost of delivering those services. This information shall be presented as part of the annual budget and financial plan." Section 3. If any section, part of a 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 upon adoption by the City Commission.2 APPROVED AS TO FORM AND CORRECTNESS: ndez, City ttor ey 1/17/2023 2 This Ordinance shall become effective as specified herein unless vetoed by the Mayor within ten (10) 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 7 of 7 File ID: 13191 (Revision:) Printed on: 6/26/2025