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Budget Message Fiscal Year 2021-2022 Office of the City Manager

Budget Message for the 2021-2022 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, and under an unprecedented second year of the COVID-19 pandemic, and with the continued efforts of our hard-working staff, I am proud to submit the proposed budget for the fiscal year 2021-2022. Who would have thought that we would be faced with another challenge from the COVID-19 Delta variant?

The filing of the 2021-2022 Fiscal Year Budget reflects an assessed value that has increased by $720 million from last year, and we have a budget that reduces the millage rate to 2.1 mils per $1,000 of assessed value. This has resulted in an unprecedented ninth year that our City has lowered the tax rate, and the fifth year that we have proposed a tax rate below the roll back rate. As in previous years, we will be directing our revenue from growth of our tax base to the Capital Projects Fund; expenditures for transportation, pedestrian safety initiatives, utility undergrounding, storm drainage, facilities, and park improvement projects.

All transportation and construction initiatives connecting residents, commercial, and recreational areas within our city were created in response to residents’ needs, discovered through town hall meetings, fact-finding meetings, or City Commission meetings. The City has received positive feedback from residents regarding the projects that relate to pedestrian safety, and thereby promoting the quality of life and quality of space initiatives in our city, primarily those deemed high priority in the Transportation Master Plan.

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

We have obtained the necessary easements to commence planning of the pedestrian bridge over Collins Avenue at 174 Street to Samson Oceanfront Park. We received proposals from engineering firms for the design and plans of this unique bridge. The COVID-19 pandemic had delayed this project, but it is back in progress and we are ready to award the engineering and design for this project.

Gateway Center has officially opened, and this facility will house our senior and adult programs, which have already begun, among other activities. It also includes a banquet space and will be available for local rental.

We have completed the installation of most decorative streetlights throughout Collins Avenue. Of the 147 new fixtures for Collins Avenue, 123 new streetlights are installed and operational. The only delays we still encounter involve the existing FPL overhead electrical lines, which are in the process of being removed as we get to each phase of the activation of the underground utilities.

The Golden Shores street lighting was awarded this past year, and progressing on schedule. Our engineers, working with FPL, have completed the detailed plans and bid documents for the Golden Shores Undergrounding Project, which will be out to bid shortly.

General Fund

As stated, the Budget provides for a reduction in the property tax rate, reflecting a millage rate of 2.1 mils per $1,000 of assessed value. This is achievable even with only a 9.66% increase in our taxable value of all property within the City. It is important to note that this includes $577 million of property value decrease due to reassessments and over $1.2 billion of new construction added to the tax rolls in our city this year. Our city’s assessed value will slowly increase over the next few fiscal years as new construction continues at a 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 364 residential units. All these projects contribute to our increased revenue from such sources as Building Department fees, bonus payments, funds from Transferable Development Rights (TDR), impact fees, and ultimately property tax revenue.

The revenue for the fiscal year 2021-2022 General Fund is $40,610,343, which represents an increase of $2,627,273, or 6.9%, from the fiscal year 2020-2021 adopted budget. However, we are estimating to be short in the General Fund by approximately $2 million. Therefore, we are making up approximately $2 million from reserves to balance the Operating Budget.

The changes in various revenue categories are outlined below:

RevenuesIncrease / (Decrease)
Property Tax revenues305,086
Franchise Fees700,000
Communications Service Tax143
Utility Taxes600,000
Licenses/Permits-Code Compliance189,000
Intergovernmental Revenues204,285
Charges for Services533,834
Fines and Forfeitures120,000
Miscellaneous Revenues(25,075)
Total Increase$2,627,273

Property tax revenues reflect a slight increase of $305,086 due to the 1/10 reduction in the millage rate. The City’s assessed value as reported by the Property Appraiser is $12,635,842,686, which is a $720,330,594 increase over 2020-2021. The recent history of the City’s taxable values is provided below:

 20222021202020192018
Current Year Adjusted Values11,338,676,92710,971,897,14710,648,993,42511,089,118,42810,299,485,811
Plus New Construction1,297,165,759943,614,945919,502,23831,417,157798,407,488
Total Estimated Taxable Values12,635,842,68611,915,512,09211,568,495,66311,120,535,58511,097,893,299
AdjustmentsN/A(392,793,020)(371,480,554)(231,735,785)(177,678,121)
Total Final Taxable Values12,635,842,68611,522,719,07211,197,015,10910,888,799,80010,920,215,178
Change from Prior Year9.66%2.91%2.83%(0.28%)9.54%

Franchise fees are estimated to increase by $700,000. The City entered into an agreement with Florida Power & Light for franchise fees to be paid on a monthly basis effective as of May 2020. Fiscal year 2021-2022 will be the first full year since the new agreement started and therefore, higher proposed revenues are anticipated. Utility tax revenues are estimated to increase by $600,000 due to new construction being added to the tax roll.

Communication Services Tax revenues are expected to remain constant with only a minimal increase of $143. Revenues from licenses/permits are expected to increase by $189,000 over the prior year primarily due to the short-term rental program. Intergovernmental revenues for state revenue sharing are projected to increase by $130,978 and local government half-cent sales taxes are projected to increase by $256,557 over the prior year offset by a decrease in FEMA reimbursements of $183,250. Charges for services are projected to increase by $533,834 over the prior year. This is primarily due to an increased indirect cost allocation of $397,334 from the Building Fund, parking fee collections of $365,000, and police special duty revenues of $100,000, offset by a reduction of $328,500 in cultural and recreational programs. Fines and forfeitures are projected to increase by $120,000 due to increased parking fines and code compliance citations. Miscellaneous revenues are projected to decline by $25,075 primarily due to a decrease in investment earnings.

The proposed General Fund budget expenditures (not including transfers out to other funds) increased to $42,585,580, which represents an increase of $2,345,026, or 5.8%, from fiscal year 2020-2021.

 FY 2021/2022FY 2020/2021
General Fund Total$87,212,386$75,692,494
Minus:
Transfers Out(5,500,000)(7,000,000)
Fund Balance(39,126,806)(28,451,940)
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General Fund Expenditures$42,585,580$40,240,554
Increase in Expenditures$2,345,026
% Increase from FY 2020/215.8%

Expenditures have increased primarily due to: (1) added positions, retirement system contributions including compensation adjustments ($1,631,228), (2) additional departmental needs ($698,249) offset by a reduction in debt payments due to lower principal payments (-$8,578) and a reduction in capital outlay needs (-$55,373), and (3) increased other disbursements for election expenses ($79,500).

Street Maintenance & 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 Fuel 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 $3,110,530.

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 completed 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. Revenues, not including appropriated fund balance, are $5,053,000, an increase of $2,410,500 from the prior year, and expenditures are $4,130,759, an increase of $328,169 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 $1,623,842, an increase of $21,660 from the prior year. The Public Arts Advisory Committee (PAAC) recommended a Public Art Program that was unanimously adopted by the Commission in October 2020. The program contains, among other things, a Five-Year Strategic Work Plan. One of the first projects in that plan is the creation of a meditation garden located in the western area of Town Center Park. The PAAC has selected for recommendation to the Commission this fall the creation of a unique sculpture fountain by San Francisco artist Michael Szabo. The fund will be utilized to plan the garden and purchase the sculpture. Details of the garden are contained in the Public Art Program. Recently, a new digital interactive piece, known as Seismic Echo, was approved for purchase with this fund and is on display in the Government Center. 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 $1,000,000, a slight increase over 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 Fuel 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 2021-2022. The City has updated its stormwater 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 $25,716,120 (including $18,141,120 carryover from the 2020-2021 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. We may continue to delay some projects in order to make up approximately a $4 million (down from $6 million) shortfall in the capital budget due to both our increase in expenses as a result of the pandemic and possible reduction in revenues and Capital Fund balance.

Conclusion

The 2021–2022 Fiscal Year Budget is a financial plan that will maintain our stability due to our staff’s efforts this past year to conserve in all aspects. We will continue to maintain our high levels of service and our ability to weather the next financial challenge, whatever it may be.

Once again, I want to express my sincere thanks to our Mayor and Commissioners for their support throughout the lingering pandemic. The work of our dedicated managers and staff has been exceptional. I want to thank all our staff that are involved with putting the budget together, and in particular, our Finance Department, under the leadership of Tiffany Neely. 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.

Respectfully submitted,

Christopher J. Russo
City Manager

Adopted Budget

View the Adopted Budget 2021 – 2022 and other financial reports.