HomeMy WebLinkAboutO-13852File Number: 5383
City of Miami
Legislation
Ordinance: 13852
City Hall
3500 Pan American Drive
Miami, FL 33133
www.miamigov.com
Final Action Date: 7/11/2019
AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER
18/ARTICLE IX/DIVISION 2/SECTION 18-542(8) OF THE CODE OF THE CITY
OF MIAMI, FLORIDA, AS AMENDED, TITLED "FINANCIAL
POLICIES/FINANCIAL INTEGRITY PRINCIPLES/FINANCIAL INTEGRITY
PRINCIPLES/MULTI-YEAR CAPITAL IMPROVEMENT PLAN," BY AMENDING
AND UPDATING THE INTEGRITY PRINCIPLES TO DELEGATE CERTAIN
CAPITAL PLAN AUTHORITY TO THE CITY MANAGER; CONTAINING A
SEVERABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, pursuant to Section 18-541 of the Code of the City of Miami, Florida, as
amended ("City Code"), the City of Miami's ("City") Financial Integrity Principles shall be
periodically reviewed and updated as necessary; and
WHEREAS, the City Commission believes that it is the City's best interest to adopt these
amendments to 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 of the City Code is amended in the following particulars:'
"CHAPTER 18
FINANCE
ARTICLE IX. FINANCIAL POLICIES
DIVISION 2. FINANCIAL INTEGRITY PRINCIPLES
Sec. 18-542. - Financial integrity principles.
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: 5383 (Revision: 8) Printed On: 10/25/2019
File ID: 5383
Enactment Number: 13852
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 plan utilizing a professional revenue estimating
conference process. Conference principals shall include, but not be limited to: one (1)
principal from the budget office; one (1) principal from the finance department, and two
(2) non -staff principals with public finance expertise.
(3) 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 financial report (CAFR) 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 CAFR. City-wide
deficit for any fiscal year is defined as the decrease in unreserved general fund
balance as reflected in the city's CAFR. 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 CAFR 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.
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 special revenue
fund. Allowed expenditures from the parks 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.
City of Miami Page 2 of 7 File ID: 5383 (Revision: 8) Printed on: 10/25/2019
File ID: 5383
Enactment Number: 13852
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 information 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.
(5) Reserve policies. The following three (3) 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 fifty percent (50%) of the liabilities of the
long-term liabilities (excluding bonds, loans, and capital lease payables) as
reflected in the city's CAFR. Amounts not needed to satisfy the fifty percent (50%)
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 (10%) of the prior three (3)
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 (10%) of the prior (3) 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 (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 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 (3) years
average of general revenues (excluding transfers). The designated fund balance
reserves shall be classified as either restricted, committed, or assigned and such
City of Miami Page 3 of 7 File ID: 5383 (Revision: 8) Printed on: 10/25/2019
File ID: 5383
(6)
(7)
(8)
Enactment Number: 13852
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 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 (5) 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 (30) 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 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.
Multi-year capital improvement 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 Section 200.065, Florida Statutes. 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 (5) additional years and, if
practicable, additional required improvements aggregated for two (2) additional five (5)
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 be detailed by fURd, include FeGGFnmeRde ' pFeje^+ pF eF;+,"+,an ranking
d -and identifv revenue sources, P1aFIFIed finaRGiRg „n+;,,rs and unfunded
projects. The CIP shall include estimates of the operational (includina 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, the date fi it ded amount budgeted, amount spent since the start date,
remaining budget, f+saal impa^+ of kFIE) R GhaRges +„ f,r,raial assumpti^FIc I FIdeFlyiR-
the pFejen+0 estimated expo dit Fes by flGGal dear feF the pFej n+ and estimated
completion date. Approved projects,�^�oaumstansvc th" crice wh;nh GhaRge the
f IRdiRg FequiFemeRtS of the pFejeGt shall be reviewed and addressed in the CIP
annually. Beainnina in Fiscal Year 2019-2020, all future capital Droiect funding.
amounts shall be budaeted and reflected in the CIP in one thousand dollar ($1,000.00)
increments.
City of Miami Page 4 of 7 File ID: 5383 (Revision: 8) Printed on: 1012512019
File ID: 5383
Enactment Number: 13852
b. Delegation of authority to Citv Manager regarding completed proiects and cancelled
proiects: guarterly reporting. The Citv Commission herebv delegates to the Citv
Manager the authoritv, on a quarterly basis, to sweep funds from the proiect accounts
of all completed proiects and all cancelled proiects with remaininq fund balances of
less than one hundred thousand dollars ($100,000.00) in unexpended funds into the
Citvwide non -departmental capital outlav reserve accounts. The Citv Manaqer shall
endeavor to move such funds into active, capital proiects with current shortfalls within
the same Commission District from which the funds had previouslv been budgeted.
The Citv Manager and the Budget Director shall provide written quarterly reports for the
previous quarter iust ended to the Citv Commission of all such amounts of unexpended
funds from the proiect accounts of all completed proiects and all cancelled proiects that
have been swept from such proiect accounts into the Citvwide non -departmental
capital outlav reserve accounts.
(9) 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 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 and year-to-date basis. The finance
department shall be responsible for issuing the monthly reports to departments, the
mayor and city commission, and provide any information regarding any potentially
adverse trends or conditions. These reports should be issued within thirty (301 days
after the close of each month.
The external auditor shall prepare the city's CAFR by March 31 of each year. The
single audit and management letter of the city shall be prepared by the external auditor
by April 30 of each year. The external auditor shall present the findings and
recommendations of the audit, single audit and management letter, to the mayor and
city commission at a scheduled commission meeting prior to July 30 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, 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,
City of Miami Page 5 of 7 File ID: 5383 (Revision: 8) Printed on: 1012512019
File ID: 5383
Enactment Number: 13852
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 30 of each year, shall be printed and made
available within sixty (60) days of such adoption.
d. Revenue collection. Such policy shall provide for maximum collection and
enforcement of existing revenues, monitoring procedures, a444 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 the city
departments adhere to the city's purchasing policies.
(12) Evaluation committees.
a. 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 finance committee, established
pursuant to city commission resolutions 98-631 and 98-767, 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 (141 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 thirty (30) days after final reading and
adoption thereof.2
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 6 of 7 File ID: 5383 (Revision: 8) Printed on: 10/25/2019
File ID: 5383
APPROVED AS TO FORM AND CORRECTNESS:
1
ria ' ndez, Cify Attor iey ___) 1012412019
Enactment Number: 13852
City of Miami Page 7 of 7 File ID: 5383 (Revision: B) Printed on: 1012512019