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Budget Message Fiscal Year 2019 - 2020. Office of the City Manager

Budget Message for the 2019-2020 Fiscal Year

By Christopher J. Russo, City Manager

In Accordance with Article IV Section 4.5 of the Charter of the City of Sunny Isles Beach, it is my honor and privilege to submit the Proposed Budget for fiscal year 2019-2020.

The filing of the 2019-2020 Fiscal Year Budget represents my fourteenth Budget as your City Manager. Our assessed value has increased almost $448 million from last year, and we have a budget that keeps the same millage rate at 2.2 mils per $1,000 of assessed value. This has resulted in an unprecedented 3rd year that our City has proposed a tax rate below the roll back rate. For the next few years our revenue from growth of our tax base will need to be directed to the Capital Fund expenditures for transportation and pedestrian safety initiatives, utility undergrounding, storm drainage, facilities, and new park development projects.

The Police Department, under Chief Snyder’s first full year, has continued its push to focus on pedestrian and vehicular safety along Collins Ave. There has been a tremendous effort in education, warnings to motorists and pedestrians alike, and summons issued. Other projects include the Gateway Park interior build-out, which is now underway and will be completed in 2020. As you may recall, this facility will house our Seniors Program, adult programs, and other activities. It will include a banquet facility that will be available for local rental. The City continues with its utility undergrounding project with the installation of the decorative streetlights throughout Collins Avenue, and the Florida Power & Light authorized electrical contractors are in the process of wiring the new system along Collins Ave. and the Atlantic Boulevard corridor.

The City Commission has, for the third year in a row, funded the School Address Verification Program that was entered into on January 9, 2017. The process of weeding out students fraudulently enrolled in our School has been slow, only about 4-5% over the past two years.

The plans for the pedestrian bridge over Collins Ave., at 180th street are well underway and expected to be completed and out to bid by the end of this calendar year. We recently obtained the necessary easements to commence planning and design of the pedestrian bridge over Collins Avenue at 174th Street to Samson Oceanfront Park. We have been awarded grant funding through the State for both of these bridges, thanks to the help of our State Representatives.

General Fund

As stated, the Budget provides for a static property tax rate, resulting in a millage rate of 2.2 mils per $1,000 of assessed value.  This is achievable even with only a 6.24% increase in our taxable value of all property within the City.  It is important to note that this includes $240 million of property value decrease due to reassessments and over $919 million of new construction added to the tax rolls in our City this year.  Our City’s assessed property tax value will continue to increase over the next three to five fiscal years as the new construction continues on a much slower pace than previous years.

There are currently eleven development projects approved, with eight of them under construction. There were also two projects completed which added 260 residential units in the City, and Publix reopened its new 53,000 square foot retail store. All these projects contribute to our increased revenue from such sources as Building Department fees, bonus payments, funds from Transferrable Development Rights (TDR), impact fees, and ultimately property tax revenue.

The revenue for the fiscal year 2019-2020 General Fund is $37,402,603, which represents an increase of $403,078, or 1.1%, from the fiscal year 2018-2019 adopted budget.  The changes in various revenue categories are outlined below:

RevenuesIncrease / (Decrease)
Total Increase$403,078
Property Tax Revenues936,237
Franchise Fees(449,000)
Communications Services Tax(24,347)
Utility Taxes(100,000)
Licenses/Permits-Code Compliance92,000
Intergovernmental Revenues69,624
Charges for Services(66,500)
Fines and Forfeitures(5,000)
Miscellaneous Revenues(49,936)

The largest significant increase is related to the property tax revenues.  The City’s assessed value as reported by the Property Appraiser is $11,568,495,663 which is a $447,960,078 increase over 2018-2019.  The recent history of the City’s Taxable Values is provided below:

 20202019201820172016
Current Year Adjusted Values10,648,993,42511,089,118,42810,299,485,8119,513,872,2688,684,155,480
Plus New Construction919,502,23831,417,157798,407,488597,556,627275,651,745
Total Estimated Taxable Values11,568,495,66311,120,535,58511,097,893,29910,111,428,8958,959,807,225
AdjustmentsN/A(231,735,785)(177,678,121)(142,553,112)(266,348,629)
Total Final Taxable Values11,568,495,66310,888,799,80010,920,215,1789,968,875,7838,693,458,596
Change from Prior Year6.24%(0.28%)9.54%14.67%14.99%

The proposed General Fund budget expenditures (not including transfers out to other funds) increased to $36,971,471, which represents an increase of $1,342,632, or 3.8%, from fiscal year 2018-2019.

 FY 2019/2020FY 2018/2019
% Increase from FY 2018/20193.8%
General Fund Total$67,858,862$61,902,084
Minus:
Transfers Out0(1,100,000)
Fund Balance(30,887,391)(25,173,245)
General Fund Expenditures$36,971,471$35,628,839
Increase in Expenditures$1,342,632

Expenditures have increased primarily due to: (1) the increased costs for medical benefits, retirement system contributions and worker’s compensation costs including compensation adjustments ($484,463), (2) additional departmental needs ($656,689) offset by a reduction in debt payments due to lower principal payments (-$7,647) and (3) increased capital outlay needs ($209,127).

Franchise Fees are estimated to decline by $449,000 due to the Florida Power & Light franchise agreement with Miami-Dade County expiring in May 2020.  The City has entered into an agreement directly with Florida Power & Light for franchise fees to be paid on a monthly basis effective as of May 2020; however, there will be a sixty-day delay for collections. Utility tax revenues are estimated to decline for water based upon the historical trend.  The revenues from this source are estimated to be approximately $100,000 less than fiscal year 2018-2019. In the licenses/permits category, revenues are expected to increase $92,000 over 2018-2019 due to the short-term rental program, lane closure and extended hours fees.  Miscellaneous revenues are projected to decline $49,936 primarily due to the lease termination for the Alamo property offset by an increase in investment earnings and other miscellaneous revenues.

One-time capital outlay expenditures for 2019-2020 are $1,129,370 (versus $920,243 in 2018-2019), an increase of $209,127.

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 seventh 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 transportation, street construction and maintenance programs.  The total budget is $2,734,351.

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 $2,769,550, an increase of $157,050 from the prior year.

Public Art Trust Fund

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 $695,628, an increase of $62,447 from the prior year. With the Public Arts Advisory Committee’s continuing creation of a multi-phased public art plan under the parameters that were jointly established with the Commission, this Fund becomes an important asset.  The PAAC’s first effort, the creation of a meditation garden located in the Western area of Town Center Park, will utilize this fund as well as possible available community funding.

Enterprise Funds

The City has a Stormwater Operating Fund and a Stormwater Capital Projects Fund.  The Stormwater Operating Fund is primarily self-supporting, and has budgeted revenues of $991,000, similar to the prior year.  This fund incurs costs to ensure compliance with the National Pollutant Discharge Elimination System Permit.

Stormwater Capital Projects are funded by the Local Option Gas Tax and transfers in from the Stormwater Operating Fund as available.  Accumulated fund balance (carryover) will be utilized for drainage projects in the city during fiscal year 2019-2020.

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 and legislative appropriations for some capital projects and will continue to seek these 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 $19,818,893 (including $12,568,893 carryover from the 2018-2019 fiscal year) are recommended and funded by the General Capital Improvement Program Fund. The significant projects include $7 million for the interior build out of Gateway Park, $2.5 million to rebuild the Golden Shores Stormwater pump station, an additional $1 million for the pedestrian bridge at the Government Center and $1 million added to the utility undergrounding project. There are many other remaining projects related to facilities, infrastructure, and parks.

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 2019-20 Fiscal Year Budget is a financial plan that, to the maximum extent possible will continue to provide a full scope of high quality municipal services. Our staff is empowered and responsible to see to it that our programs, special events, and public safety enhance life in our City. This Budget continues to provide the required resources for us to complete all the great parks, facilities, infrastructure, and other amenities that make our community so desirable.

I want to express my thanks to our Mayor and Commissioners for their input and support throughout the year. The work of our dedicated Department Heads and staff does not go unnoticed or underappreciated. While it is a group that brings the Budget together, I would be remiss not to point out our dedicated hard working Finance Department, under the leadership of Tiffany Neely. The City continues to operate maintaining fiscal strength and stability. This Budget will enable the City of Sunny Isles Beach to continue its quality of life as a thriving and safe community that cherishes its location, unites in its diversity and evolves to meet the continuous challenges that greet us every day.

Adopted Budget

View the Adopted Budget 2019-2020 and other financial reports.