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Budget Message Fiscal Year 2020-2021 Office of the City Manager

Budget Message for the 2020-2021 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, under unprecedented circumstances, of the COVID-19 pandemic, and with the help of our hard-working staff, I am proud to submit the Proposed Budget for the fiscal year 2020-2021.

It is nearly impossible to overstate the magnitude of the challenge the COVID-19 pandemic has presented, both for the strain it has placed on our residents’ health and economic resources, and within our City employee family we have felt loss. Unlike a hurricane, which comes and goes within a few days at most, this pandemic has been here for months and will probably have lingering effects for a very long time. Although we are estimating the cost of this pandemic to our City Budget is about $5 million dollars, we have the ability to withstand the financial effects of this emergency situation. That is why we maintain unallocated reserves.  Reductions in revenue and added expenses from COVID-19 are contained within this message.

The filing of the 2020-2021 Fiscal Year Budget reflects an assessed value that has increased by $347 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 5th year that our City has proposed a tax rate below the roll back rate. As mentioned last year, we will be directing our revenue from growth of our tax base to the Capital Projects Fund expenditures for transportation and pedestrian safety initiatives, utility undergrounding, storm drainage, facilities, and new park development planning.

The Police Department, under Chief Snyder has continued its push to focus on pedestrian and vehicular safety in our City. These efforts, combined with the Transportation Master Plan initiatives, have resulted in our City being recognized by the Florida League of Cities. The City has received the league’s City Spirit Award, which recognizes our City’s efforts to improve pedestrian safety.

The strategies include several transportation and construction initiatives connecting residential, commercial and recreational areas within our city. These initiatives, some of which are mentioned below, were created in response to residents’ needs. These needs were identified through a series of Town Hall meetings and input from the City’s fact-finding committee and the City Commission. The City has received positive feedback from residents regarding the projects that relate to pedestrian safety and in turn promoting the quality of life and quality of space initiatives in our city.

The plans for the pedestrian bridge over Collins Avenue at 180th Street are expected to be completed and out to bid by the end of the calendar year. The completion of the plans for this bridge have been delayed by all the new requirements of the State regarding pedestrian bridges over State roads, and the COVID-19 pandemic. We received a $500,000 grant, thanks to our State Representatives.

As mentioned last year, we have obtained the necessary easements to commence planning and design of the pedestrian bridge over Collins Avenue at 174th Street to Samson Oceanfront Park. We had taken proposals from engineering firms for the design and plans of this unique bridge. However, the COVID-19 pandemic has significantly delayed this project. We had been awarded grant funding through the State for this bridge also. The amount was $1 million, again thanks to the help of our State Representatives. However, the Governor had to veto the appropriation along with over $100 million of other awards, due to the increasing costs associated with the pandemic.

We are very excited about the completion of the Gateway Park Center. While we were able to complete it, due to the pandemic, it will not open yet. 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. Of the 150 new fixtures for Collins Avenue, 112 bases have been installed and 88 new streetlights are installed and operational. We are working daily with multiple crews and expect to complete the streetlight installation on Collins by the end of the year. The only potential delays would be related to the existing FPL overhead electrical lines, which are in the process of being removed ahead of the streetlight installation.

The Golden Shores undergrounding and street lighting design are progressing on schedule. Our engineers are working with FPL for their input in order to prepare the detailed plans and bid documents for this project. In the meantime, we have worked with our engineering firm to expedite plans for the street lighting within Golden Shores. This process will include the preparations of bid specifications and bidding between now and the end of the year.

General Fund

As stated, the Budget provides for the same property tax rate, maintaining a millage rate of 2.2 mils per $1,000 of assessed value.  This is achievable even with only a 6.42% increase in our taxable value of all property within the City.  It is important to note that this includes $597 million of property value decrease reassessments and over $943 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 nine approved development projects, six of which are under construction. There were also three projects completed which added 628 residential units and the Milton Tower with 95,000 square foot of office space. 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 2020-2021 General Fund is $37,983,070, which represents an increase of $580,467, or 1.6%, from the fiscal year 2019-2020 adopted budget. However, we are estimating to be short in the General Fund by approximately $3 million caused by the COVID-19 pandemic. Therefore, we are making up approximately $2.6 million from reserves to balance the Operating Budget. It is my intent to balance the Budget during the course of the 2020-2021 fiscal year by holding back on nonessential hiring and reducing expenditures. The changes in various revenue categories are outlined below:

RevenuesIncrease / (Decrease)
Total Increase$580,467
Property Tax Revenues725,264
Franchise Fees550,000
Communications Services Tax(84,681)
Utility Taxes0
Licenses/Permits-Code Compliance184,000
Intergovernmental Revenues(198,166)
Charges for Services(360,300)
Fines and Forfeitures10,000
Miscellaneous Revenues(245,650)

The largest significant increase is related to the property tax revenues. The City’s assessed value as reported by the Property appraiser is $11,915,512,092 which is a $347,016,429 increase over 2019-2020. The recent history of the City’s Taxable Values is provided below:

 20212020201920182017
Current Year Adjusted Values10,971,897,14710,648,993,42511,089,118,42810,299,485,8119,513,872,268
Plus New Construction943,614,945919,502,23831,417,157798,407,488597,556,627
Total Estimated Taxable Values11,915,512,09211,568,495,66311,120,535,58511,097,893,29910,111,428,895
AdjustmentsN/A(371,480,554)(231,735,785)(177,678,121)(142,553,112)
Total Final Taxable Values11,915,512,09211,197,015,10910,888,799,80010,920,215,1789,968,875,783
Change from Prior Year6.42%2.83%(0.28%)9.54%14.67%

The proposed General Fund budget expenditures (not including transfers out to other funds) increased to $40,240,554, which represents an increase of $3,269,083, or 8.8%, from fiscal year 2019-2020.

 FY 2020/2021FY 2019/2020
% Increase from FY 2019/20 8.8%
General Fund Total$ 75,692,494$ 67,858,862
Minus:
Transfers Out(7,000,000)0
Fund Balance(28,451,940)(30,887,391)
General Fund Expenditures$ 40,240,554$36,971,471
Increase in Expenditures$ 3,269,083

Expenditures have increased primarily due to: (1) the increased costs for medical benefits, retirement system contributions and worker’s compensation costs including compensation adjustments ($2,305,614), (2) additional departmental needs ($321,484) offset by a reduction in debt payments due to lower principal payments (-$8,704), (3) increased other disbursements for election expenses ($25,000) and (4) increased capital outlay needs ($625,689).

Franchise Fees are estimated to increase by $550,000 due to the expired Florida Power & Light franchise agreement with Miami-Dade County. The City has entered into an agreement with Florida Power & Light for franchise fees to be paid on a monthly basis effective as of May 2020. The first year of the agreement reflected lower revenues due to a sixty-day delay for collections and revenues not being received until August 2020. Utility tax revenues are estimated to remain constant based upon the historical trend. Revenues from licenses/permits are expected to increase $184,000 over 2019-2020 primarily due to the short-term rental program. Miscellaneous revenues are projected to decline $245,650 primarily due to the lease terms and expiration dates for various City properties.

One-time capital outlay expenditures for 2020-2021 are $1,755,059 (versus $1,129,370 in 2019-2020), an increase of $625,689.

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 fund was developed for the benefit of segregating the uses of this revenue source. The fund accounts for the costs related to transportation, street construction and maintenance programs. The total budget is $2,722,344.

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. This past year we initiated a study, regarding Building Department fees, staffing, and the use of these funds for technological upgrades in the Building Department, and related operations. This includes providing for the filing of plans electronically, the interconnection of building code violations and code compliance, and renovations of the building department physical plant. Revenue not including appropriated fund balance, is $2,642,500, a decrease of $127,050 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 $1,602,182, an increase of $906,554 from the prior year. The Public Arts Advisory Committee (PAAC) has adopted a Public Art Program to be recommended to the Commission this fall. The program contains, among other things, a Five-Year Strategic Work Plan. One of the first projects in that Plan is the creation of the meditation garden located in the western area of Town Center Park. The fund will be utilized to plan, bid, and construct this special area of Town Center Park. A detail of the plan is contained in the Public Art Program. Recently, a new digital interactive piece has been approved for purchase by the Commission for the Government Center, that will come out of this Fund. It is contemplated this Fund will also be utilized to commission a signature piece of outdoor art that will be positioned for all to enjoy and become a City landmark.

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, the same as 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 2020-2021. The city has updated its storm water pumping capacity and maintenance programs substantially over the past year and feel very confident that we have made major improvements in Stormwater management.

Capital Improvement Program

The Capital Improvement Program concentrates on the development of Parks, infrastructure, and rehabilitation of our facilities including major road resurfacing, sidewalk improvements, pedestrian conductivity to our Parks and other facilities. 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 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 $21,128,603 (including $9,388,603 carryover from the 2019-2020 fiscal year) are recommended and funded by the Capital Improvement Program Fund. 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. Some of these projects will be delayed or possibly put on hold in order to make up approximately a $6 million shortfall in the capital budget due to both our increase in expenses due to the pandemic, and anticipated reduction in revenues and Capital Fund balance.

Conclusion

The 2020–2021 Fiscal Year Budget is a financial plan that is coming out at a time for which we hope is also an emergence from the immediate threat of this pandemic crisis. Our city will remain stabilized because of the reserves that we are fortunate to have. We will continue to maintain our service levels and our ability to weather the next financial challenge, whatever it may be. Currently the cost of this health crisis, both in reduced revenues and unexpected expenditures, has been over $3 million so far, this current fiscal year.

I want to express my thanks to our Mayor and Commissioners for their support throughout this crisis. The work of our dedicated Managers and staff has been phenomenal. While most staff are involved with putting the Budget together, I would be remiss not to point out the incredible work of our Finance Department, under the leadership of Tiffany Neely, maintaining fiscal strength and stability while addressing all the needs in our fight against this pandemic. And yes, this Budget will continue to 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.

Respectfully submitted,

Christopher J. Russo
City Manager

Adopted Budget

View the Adopted Budget 2020-2021 and other financial reports.