Miami Beach FY 2020 Budget Approved

Susan Askew
Susan Askew

Miami Beach FY 2020 Budget Approved:

Property tax rate flat, debt service increases slightly to pay for voter-approved GO Bond projects

Miami Beach City Commissioners approved a $350 million budget for Fiscal Year 2020 which keeps the property tax rate flat while increasing the debt service rate to pay for the General Obligation Bonds approved by voters last November.
 
What the new budget means, in general, is an increase of $33 on median homesteaded properties and $106 on the average homesteaded property. According to the property values provided by the Miami-Dade County Property Appraiser on July 1, 2019, the median value of a homesteaded property in Miami Beach is $195,522 while the average is $500,407. By law, non-homesteaded properties may see an increase of up to 10%, but that number could be higher if a change in ownership results in a resetting of the cap. 
 


By the numbers: FY 2020 Property Taxes
Total General Operating Millage 5.7288 mills Same as last year
Voted Debt Service Millage 0.2933 mills 0.1333 increase over last year
Total Combined Millage 6.0221 mills  
 



Based on the total combined millage rate, residents will pay about $6 for every $1,000 in property value. According to the Administration, overall taxable value for the City of Miami Beach on July 1, 2019 was $40.1 billion, including $302.5 million in new construction. Property taxes comprise 54.1% of total FY 2020 General Fund revenues.
 
In November 2018, voters approved the issuance of $439 million in General Obligation Bonds (GO Bond) which included 57 capital projects to be undertaken over time. Bonds will be issued in four tranches resulting in a gradual increase in debt service costs to residents. This year’s debt service increase to cover tranche one is 0.1333 mills, or 13 cents for every $1,000 in property value. 

Note: Property owners whose property values have increased will see an increase in their property taxes based on the higher value but the actual millage rate remains unchanged. Everyone will pay the increase in the debt service rate.
 
The FY 2020 General Fund operating budget of $350 million is, by law, balanced. This summer, following the release of property values which went up 3.1 percent overall, the City had a $4.4 million gap between projected revenues and expenses. The budget was ultimately balanced through a “combination of revenue and expenditure refinements, revenue enhancements, expenditure reductions/efficiencies, and expenditure enhancements,” according to the budget memo prepared by City Manager Jimmy Morales. One notable reduction, 28 fewer staff positions than in FY 2019.
 
Additional expenditures or “enhancements” include the new Office of the Inspector General, a dedicated police officer at all Miami Beach public schools initiated after Parkland, increased funding for the STEAM Plus program and funding for homelessness and domestic violence programs.
 
TBD: Policing for Spring Break which is estimated to be $2.6 million above the currently budgeted $1.1 million. Given the lack of clarity around programming of events to help reduce rowdy behavior, Miami Beach CFO John Woodruff told Commissioners this summer, “As that picture becomes clearer, we would probably come back with a mid-year amendment to cover it or we would let it happen and then come back and close the gap, whatever it is. We’re just trying to be flexible on  that.”
 
Earlier this month, City Director of Tourism and Culture Matt Kenny told Commissioners discussions are taking place with Live Nation to program the month of March 2020 with daytime events such as yoga and beach volleyball and weekend concerts that might include Jimmy Buffett and Pharrell Williams. Commissioners committed up to $1.5 million for the event site, production, and daytime programming while Live Nation would bring the artists and handle ticket sales.

Commissioner Michael Góngora noted at the beginning of the vote on the budget that he voted no last year based on “concerns that I still have, frankly, with regard to the size the City has grown over the last ten years… I do continue to the share concerns from people that have reached out to me that our budget has grown too large, that we have too many departments, that we haven’t done an adequate job of justifying those expenses.”
 
“With that said, I think it would be disingenuous of me to vote against the budget this year, because I served on the Finance Committee and participated in all of the proceedings” leading up to the final budget. Góngora said he wanted a process for the following year that would systematically review each department. Toward the end of this year’s budget process, the City undertook a zero-based budgeting exercise for one department as requested by Finance Committee Chair Commissioner Ricky Arriola. Góngora seeks to start a similar process beginning in October and lasting for the duration of the annual budget process.
 
“But I’d like to commend the Administration as well as the Commission for the work that was done this year in keeping the millage rate flat and accommodating numerous different ideas and enhancements, and things that this Commission wanted to do and somehow make it all work without raising the taxes which was important to me,” Góngora said.
 
Mayor Dan Gelber said he was “very proud” of the budget which reflects “a 1.3 [percent] increase in the General Fund from last year which is a very small increase, under actually the cost of living.”
 
“This is an extremely balanced budget. It is a fiscally responsible budget that reflects the needs of our community,” Gelber said. 
 
“Overall, our full-time position count is 28 positions less than last year so our government has actually gone down 28 positions and, by the way, it’s only two more than in FY 2007  so if you look at just the size of our government, it has almost flatlined over the last thirteen years and is less than it was last year which is incredible, I think, that we are still meeting the needs of our community,” he said.
 
“Almost every single priority of this Commission and our residents have been met at some level,” Gelber continued. “Not withstanding the fact that we’re meeting all these priorities, we still have a double A plus credit rating which tells us a little about our financial strength.”
 
“We all know that we saved $28 million in the first tranche of the GO Bond program because the demands for the bonds was so high, in great part because of the rating and because of the obvious stability of the debt,” Gelber said.

Gelber also noted the Commission approved an increased target for the General Fund reserves of 25% from the previous 17%. This year’s budget includes a 20% set aside for reserves.
 
“We get a lot of requests for a lot of different things and we’re a City with a lot happening,” Gelber said. “But the most important thing is that we’re able to meet the needs of our community and our residents in a way that they expect without increasing their tax burden.”
 
Finance Committee member Commissioner Mark Samuelian highlighted the new Office of the Inspector General. “We have funded a new branch of government, the Inspector General… That is a group that is dedicated towards raising the bar, increasing efficiencies so within the context of a balanced budget, we’ve also now got a group that, I think, hopefully will help us even do more.”
 
Finance Committee Chair Ricky Arriola, pointing out the smaller headcount, said “Our residents are getting a lot more service with the same headcount. We’ve got a trolley service that moves 14,000 people a day for free that didn’t exist ten years ago, even less than that. Our youth sports, the expansion of baseball, soccer, everything. Seniors. Senior activities. Parks and Recs are knocking it out of the park. Meals programs. There’s a lot that we don’t talk about that I think we need to make folks more aware about.”
 
“And all that we’re doing in the public schools,” Commissioner Joy Malakoff added. “Most cities don’t support the public schools because we have the Miami-Dade County Public School system. Gelber noted the City is “spending a couple million” including police at the schools.
 
Commissioners also adopted a five year Capital Improvement Plan along with the FY 2020 Capital Budget.
 
Details on the Millage Rate

Full staff memo with budget details

Full staff memo with details on the Capital Improvement Plan and FY 2020 Capital Budget 
 
 
 

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