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HomeMy WebLinkAboutAgenda Item Summary FormDate: 01/22/2019 AGENDA ITEM SUMMARY FORM Second Readinq File ID: #5383 Commission Meeting Date: 07/11/2019 Type: Ordinance Subject: Amend Code - Capital Budgeting Process Update Purpose of Item: Requesting Department: Office of Management and Budget Sponsored By: District Impacted: All An ordinance to amend the Financial Integrity Principles by delegating authority to the City Manager to sweep funds of all completed or cancelled projects with remaining balances under $100,000 into Citywide non -departmental capital outlay reserve accounts. Further stating that all future capital projects will be budgeted and reflected in $1,000 increments. Background of Item: This item will assist in moving the City of Miami Capital Improvement Program forward in a more expeditious manner. The current practice involves bringing all appropriation changes (as small as $0.01) to the City Commission for approval. Budget Impact Analvsis Item has NO budget impact Item is NOT Related to Revenue Item is NOT funded by Bonds Total Fiscal Impact: N/A Reviewed By City Commission Joyce Jones Office of Management and Budget Christopher M Rose City Manager's Office Sandra Bridgeman City Manager's Office Nikolas Pascual Legislative Division Valentin J Alvarez Office of the City Attorney Barnaby L. Min Office of the City Attorney Victoria Mendez City Commission Nicole Ewan Legislative Division Valentin J Alvarez Office of the City Attorney Valentin J Alvarez Office of the City Attorney Victoria Mendez City Commission Maricarmen Lopez City Commission Maricarmen Lopez Office of the Mayor Mayor's Office Office of the City Clerk City Clerk's Office Legislative Division Valentin J Alvarez City of Miami 05/28/2019 3:10 PM Meeting Completed 02/14/2019 9:00 AM Department Head Review Completed 03/11/2019 4:56 PM Assistant City Manager Review Completed 04/09/2019 1:11 PM City Manger Review Completed 04/09/2019 1:55 PM Legislative Division Review Completed 04/16/2019 3:34 PM Deputy Attorney Review Completed 04/16/2019 3:45 PM Approved Form and Correctness Completed 04/24/2019 4:33 PM Meeting Completed 05/09/2019 9:00 AM Legislative Division Review Completed 05/29/2019 3:31 PM Deputy Attorney Review Skipped 05/28/2019 3:10 PM Approved Form and Correctness Completed 06/04/2019 5:00 PM Meeting Completed 06/13/2019 9:00 AM Meeting Completed 07/11/2019 9:00 AM Signed by the Mayor Completed 07/19/2019 1:43 PM Signed and Attested by the City Clerk Completed 07/19/2019 1:52 PM Legislative Division Review Completed 10/24/2019 2:16 PM File ID: 5383 (Revision: B) Printed On: 1012512019 Office of the City Attorney Barnaby L. Min Deputy Attorney Review Completed 10/24/2019 2:32 PM Office of the City Attorney Victoria Mendez Approved Form and Correctness with Modification(s) Completed Office of the City Clerk City Clerk's Office Rendered Completed 10/25/2019 8:24 AM City of Miami File ID: 5383 (Revision: B) Printed On: 10/25/2019 kYti a��. City of Miami City Hall 3500 Pan American Drive Legislation g Miami, FL 33133 Ordinance www.miamigov.com Enactment Number:13852 File Number: 5383 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. The following financial integrity principles are hereby adopted: ' 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 File ID: 5383 (Revision: 8) Printed On: 10/25/2019 (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. 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 City of Miami File ID: 5383 (Revision: 8) Printed On: 10/25/2019 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 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; City of Miami File ID: 5383 (Revision: 8) Printed On: 10/25/2019 (6) (7) (8) 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 by fl IRGI' include ronnmmLand-e l PFGjen+ r,rinri+iza+inN raRkiRgs and identifv revenue sources, plaRRed fiRaRGiRg epti„N& 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 fl INl'e amount budgeted, amount spent since the start date, remaining budget, #+so&I impa^+ of kRE) /N GhaRges +„ faial assumpti^Nc I RdeFl„INly the pFejen+0 estimated expeRdi+I Fes by fiGGal year fer the pFej n+ and estimated completion date. Approved projects,�^�ooumstansvc th" crice Whinh GhaRge the fIINI`IINg FequiromeRtG of the pFE)jeGt 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. b. Delegation of authority to Citv Manager reaardina completed Droiects and cancelled Droiects: ouarterly reportina. The Citv Commission herebv delegates to the Citv Manaaer the authority, on a auarterly basis, to sweep funds from the Droiect accounts of all completed Droiects and all cancelled Droiects with remainina 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 Manaaer shall endeavor to move such funds into active, capital Droiects with current shortfalls within the same Commission District from which the funds had previously been budaeted. The Citv Manaaer and the Budaet Director shall provide written Quarterly reports for the previous quarter lust ended to the Citv Commission of all such amounts of unexpended City of Miami File ID: 5383 (Revision: 8) Printed On: 10/25/2019 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, 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, and 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. City of Miami File ID: 5383 (Revision: 8) Printed On: 10/25/2019 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 APPROVED AS TO FORM AND CORRECTNESS: xLQ t�i'6 ria i "ndez, City A tt—or iey 4/24/2019 I' ria i hdez, City Attomey 6/4/2019 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 File ID: 5383 (Revision: 8) Printed On: 10/25/2019