Budget Message for Fiscal Year 2016 - 2016, Office of the City Manager

Budget Message for the 2015 – 2016 Fiscal Year

By Christopher J. Russo, City Manager

(September 7, 2015) In Accordance with Article IV Section 4.5 of the Charter of the City of Sunny Isles Beach, I hereby submit the Proposed Budget for fiscal year 2015-2016.

Bringing capital projects to completion remains our top priority into the 2015-16 fiscal year. At the same time we will be planning for the addition to the Government Center complex to add a separate 6-8 grade school, a civic/senior center, commercial office space and some expansion space for City Government offices on the north side of the existing Government Center. The most complicated project is the undergrounding of our utility distribution wires, which will be out to bid in October and commencing early next year. This project is being done in phases starting with the Collins Avenue corridor. Also out to bid and soon to be awarded, is the construction of the Pedestrian/Emergency Bridge from 174th Street to 172nd Street, and the renovations to Samson Oceanfront Park. Underway is the rehabilitation and new drainage on 174th Street. The completion of Gateway Park is expected by the end of this calendar year, with a grand opening early next year. Other smaller projects of public interest include drainage improvements on 172nd Street and North Bay Road on the west side of Margolis Park.

From an operating standpoint, we are raising the level of services provided throughout the organization with new and improved services. We continue to enhance our highly regarded existing parks, together in the way of amenities, maintenance, safety, security and programming.

General Fund

Again this year, the Budget provides for a reduction of the property tax rate, resulting in a millage rate of 2.5 per $1,000 of assessed value. This is achievable due to the 18.52% increase in our taxable value of all property within the City. It is important to note that this includes $1.124 billion of property value increase and over $275 million of new construction added to the tax roll in our City this year. Our City’s assessed property tax value will continue to increase significantly each of the next five fiscal years as the new construction we see every day nears completion. The City Commission decided on this reduction while maintaining sufficient funding to continue to improve our service delivery, to complete our capital projects, start on the new 6-8 grade school, civic/senior center, and plan for many technological advancements in the operation of our government into the next fiscal year.

There are currently 17 development projects approved and in some phase of the development process, and 3 with certificates of occupancy that will allow owners to move in over this next year. All these projects contribute to our increased revenue from such sources as Building Department’s fees, bonus payments, funds from Transferrable Development Rights (TDR), impact fees, and ultimately property tax revenue.

The revenue for the fiscal year 2015-2016 General Fund is $34,559,343, which represents an increase of $2,473,641, or 7.7%, from fiscal year 2014-2015 adopted budget. The changes are attributed to various revenue categories as outlined below:

 

Revenues Increase/ (Decrease)
Property Tax Revenues                  2,179,273
Franchise Fees                      (48,750)
Communications Services Tax                    (103,033)
Utility Taxes                        (50,000)
Licenses/Permits-Code Enforcement                      (25,000)
Intergovernmental Revenues                        300,031
Charges for Services                    209,210
Fines and Forfeitures                       –
Miscellaneous Revenues                        11,910
Total Increase  

  $ 2,473,641

 

The largest significant increase is related to the property tax revenues. The City’s assessed value as reported by the Property Appraiser is $8,959,807,225. The recent history of the City’s Taxable Values is provided below:

 

FISCAL YEAR
2016 2015 2014 2013 2012
Current Year Adjusted Values 8,684,155,480 7,679,032,753 6,900,843,377 6,184,144,720 5,624,026,354
Plus New Construction            275,651,745          226,030        3,242,515      74,139,611    224,053,924
Total Estimated Taxable Values 8,959,807,225 7,679,258,783 6,904,085,892 6,258,284,331 5,848,080,278
Adjustments N/A (119,273,765) (167,718,469)    (149,228,754)    (197,002,891)
Total Final Taxable Values 8,959,807,225 7,559,985,018 6,736,367,423 6,109,055,577 5,651,077,387
Change from Prior Year 18.52% 12.23% 10.27% 8.10% 4.66%

 

The proposed General Fund budget expenditures (not including transfers out to other funds) increased to $33,168,135 which represents an increase of $3,548,222, or 11.98%, from fiscal year 2014-2015.

 

FY 2015/2016 FY 2014/2015
General Fund Total $54,049,715 $49,275,714
Minus:
Transfers Out (696,849) (871,789)
Fund Balance (20,184,731) (18,784,012)
General Fund Expenditures $33,168,135 $29,619,913
Increase in Expenditures $3,548,222
% Increase from FY 2014/15 11.98%

 

The following are some of the more significant changes to the Budget:

Much of the increase to our operating budget is the gross effect of increased overtime needs, most of which is fully reimbursed as it relates to ongoing construction, our required three year sworn personnel salary schedule update that has been phased in since last year coupled with an increase to the retirement system premiums and health insurance costs across all employees. I would be remiss if I didn’t express my sincere gratitude to those representatives from the police union and our civilian staff members who worked hard to keep health insurance costs down by assisting management to restructure our plan to reduce the premium increases to the City. In many cases they made decisions that resulted in personal sacrifices for the greater good and fairness of City employees as a whole and for the benefit of the City from a financial standpoint.

Communications Services Tax revenues continue to decline due to legislative changes and decreased collections. The revenues from this source are estimated to be more than $100,000 less for fiscal year 2015-2016. In the intergovernmental revenue category, state revenue sharing is projected to increase over $88,000 and local government half-cent sales tax projections are projected to increase almost $212,000 over 2014-15. Charges for Services are projected to increase almost $210,000 over 2014-15. This is primarily due to the planned opening of the Gateway Park garage, other increased parking revenues, and increased cultural and recreational program collections.

One-time capital outlay expenditures for 2015-2016 are $1,294,100 (vs. $803,313 in 2014-15), an increase of $490,787. The most significant items to note are replacement of the city’s main communications system ($200,000), furniture and equipment for parks and parks maintenance efforts ($148,000), and upgrading the AV equipment in the City Commission chambers ($32,000).

We have planned significant improvements in our cultural and community programs for our residents. We will be adding a Beach Chair Rental Program to help offset the inconvenience caused by the anticipated temporary closing of Samson Park for a major updating and improvement, increasing enrollment in our After School Program at Pelican Community Park, and adding additional playground security. We will also be planning an annual fishing tournament, a new concert series and other programming at Gateway Park, and expanding Golden Era movies and teen events.

In an effort to assure that we are meeting the needs of our residents, the City Commission has decided to conduct a Demographic Study of the City, and, in conjunction with the Sunny Isles Beach Foundation, develop a Cultural Master Plan.

Street Maintenance and Construction Fund

Major revenue sources in the Street Maintenance and Construction Fund include intergovernmental revenues such as State Revenue Sharing, Transportation Surtax, and Local Option Gas Tax. This is the fourth year of this fund, which was developed for the benefit of segregating the uses of this revenue source. This fund accounts for the costs related to street construction and maintenance programs. The total budget is $2,532,041.

Building Fund

Major revenue sources in the Building Fund include fees generated from building permits and inspections. This fund was developed for the benefit of segregating the uses of this revenue source. This fund accounts for the costs related to the administration and enforcement of the Building Code. Revenue, not including appropriated fund balance, is $3,079,500, an increase of $460,380 from the prior year.

Public Art Trust Fund

New to the City’s budget, this fund was created in 2014-2015 for the benefit of segregating the use of public art trust fund revenues to purchase and maintain art within the City.   The total budget is $33,000.

Enterprise Funds

The City has a Stormwater Operating Fund and a Stormwater Capital Projects Fund. The Stormwater Operating Fund is self-supporting, and has budgeted revenues of $991,250, similar to the prior year.  This fund incurs costs to ensure compliance with the National Pollutant Discharge Elimination System Permit.

The Stormwater Capital Projects Fund is funded by the Local Option Gas Tax and transfers in from Stormwater Operating Fund.  Carry over funds from prior years are slated to be expended for the 174th Street Drainage Project, and accumulated fund balance will be utilized for other drainage projects in Golden Shores and on North Bay Road during fiscal year 2015-2016.

Capital Improvement Program

The Capital Improvement Program concentrates on the development of parks, infrastructure, and rehabilitation of our facilities including major road resurfacing, infrastructure upgrades, and expansion. A capital improvement project generally exceeds $25,000 and has a useful life of five years or more. The City has been successful in leveraging City dollars to obtain grant awards for some capital projects and will continue to seek grants where possible.

The City has one Capital Projects Fund: The General Capital Improvement Program Fund which is funded by a transfer from the General Fund, grants, impact fees, other development fees and contributions/donations.

The capital projects, which total $34,555,055, which includes $17,240,055 carryover from the 2014-2015 fiscal year, are recommended and funded by the General Capital Improvement Program Fund. The significant projects include $5.5 million for utility undergrounding on Collins Avenue, an additional $0.5 million for Gateway Park (bringing the total to be invested in the park to $23 million), $0.5 million for an observation deck at Intracoastal Park, an additional $2.0 million for a pedestrian and emergency vehicle bridge (bringing this total to approximately $10.25 million), $4.0 million for the new government center annex and 6-8 school, and additional $1.0 million for upgrades to Samson Park; the remaining relate to development and improvements to other City parks and property and relocation of the skateboard park.

All of the Capital Improvement Projects requested and proposed for this year are fully detailed in our proposed Five-Year Capital Improvement Plan (CIP) located in the CIP section of this document. Please note that many capital projects are multi-year endeavors.

Conclusion

The 2015-16 Fiscal Year Budget is truly a dynamic financial plan that will continue to provide our residents and guests with a full scope of high-quality municipal services, programs, special events, and safety that enhances life in our City. It also provides the required resources for us to construct all the great parks, facilities, infrastructure, and other amenities that make our community so desirable.

I would like to thank the Mayor and Commissioners for their vision and direction through this process. With the effective work of our Finance Department and that of each Department, the City is operating with a clear plan of maintaining fiscal strength and stability. This Budget will enable the City of Sunny Isles Beach to continue its quality of life as a thriving community that cherishes its location, unites in its diversity and evolves to meet the continuous challenges that success brings.

To view the F/Y 2015 – 2016 Budget, please contact the Office of the City Clerk at 305.792.1703 or [email protected]. To view other City Financial Reports, please visit our webpage.