By Stan Morris, City Manager
In accordance with article IV Section 4.5 of the charter of the City of Sunny Isles Beach, I am pleased to present to you the proposed comprehensive budget and 5-year Capital Improvement Program for FY 2022-2023.
When we started this process, I had four main goals to accomplish.
The first goal was to involve the City Commission in the development of the priorities for this next fiscal year. Through individual meetings with Commission and our administrative team, we were able to freely discuss what the goals were for the future of our City. A special thank you to the Commission for their guidance and open dialogue to discuss what the vision and goals are for this upcoming year. Their message was clear, and the recurring theme included public safety and reducing our millage rate.
The second goal was to thoroughly involve the staff in this process. As it is, the department heads and their team that must execute the work that this budget represents, they needed to be involved at every step. After they heard your vision, they were tasked with doing the research to provide a professional assessment of what was possible, how to do it, and what it would cost. Simultaneously, our Assistant City Manager, Audra Curts-Whann performed a full 5-year review, line by line, of the actual spend for each department. Working with our Finance Director Tiffany Neely, every department met individually with them and my office for a thorough review of what they had spent historically to identify where surplus may be cut. Every department was directed to look at their budget from a fresh perspective, prioritizing needs over wants. Every department head was provided the tools they needed to get to work and submit a comprehensive, responsible budget. This was followed by one-on-one meetings with each department and my office to review their submissions. We scrutinized each division and cut where it was possible and added where necessary to meet the vision you provided. I thank our Finance team and our department heads who took on this challenge and made the hard decisions to provide this balanced budget that asked to do more with less.
The third goal was to develop a budget that remained fiscally responsible, could lower the millage rate, and ensure that our residents continue to receive the high-quality services that they expect while fulfilling the initiatives set by the Commission. This budget achieves these goals. The filing of the 2022-2023 Fiscal Year Budget reflects an assessed value that has increased by $1.1 billion from last year, and we have a budget that reduces the millage rate to 2.0 mils per $1,000 of assessed value. This has resulted in an unprecedented tenth year that our City has lowered the tax rate.
In 2021, our budget was 9.5% higher than the prior year, then, in 2022 our budget was 7.6% higher as compared to this proposed operating budget which is only 4.0% more than last year’s operating budget. Between the supply chain issues, the extraordinary increase in CPI of over 10.6% from June 2021 to June 2022, and the “great resignation” of 2021 that continues to affect every corner of our country in both the public and private sectors, we developed a budget that keeps us competitive in the employment market. This is critical to recruit and retain qualified personnel to maintain the quality of life for our residents. Fiscal responsibility is at the forefront of our entire management team. The phrase “do more with less” has been felt by every department these past few years where they had to do more work with less staff (for less pay than their counterparts in other cities). We are fortunate to have the dedicated team that we have that has kept the wheels turning throughout the pandemic and the aftermath that has left us all working in unprecedented times and conditions. As we continue to navigate this post-pandemic world, we developed a budget that is conservative on our revenues and hopeful in our expenses. We hope to be able to fill every vacant position. We hope to purchase every budgeted item. We hope to fulfill every Commission goal.
And finally, the fourth, and to me, most important goal remains to be fully transparent. When I took this position, I promised to be fully transparent in my decisions and actions. I hide nothing and welcome your questions and comments. I worked closely with the Commission, the Finance Department and City staff to present an honest and manageable budget. This budget advances our initiatives in sustainability, innovation, safety, and quality. We also met with members of our public with expertise in finance who provided additional insight.
We listened to the residents through public outreach and surveys and worked closely with our Commission and dedicated staff to deliver this fully transparent, thorough, and comprehensive budget that fulfills several initiatives as proposed by our community in a cost-effective and fiscally responsible manner.
As stated, the Budget provides for a reduction in the property tax rate, reflecting a millage rate of 2.0 mils per $1,000 of assessed value. This is achievable even with only a 11.32% increase in our taxable value of all property within the City. It is important to note that this includes $255 million of property value decrease due to reassessments, $1.2 billion increase of property values and over $197 million 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 seven approved development projects, four of which are under construction. There was also one project completed, which added 320 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 2022-2023 General Fund is $47,899,558, which represents an increase of $7,289,215, or 17.9%, from the fiscal year 2021-2022 adopted budget.
The changes in various revenue categories are outlined below:
|Property Tax Revenues||976,905|
|Communications Service Tax||(20,000)|
|Charges for Services||202,500|
|Fines and Forfeitures||335,000|
Property tax revenues reflect an increase of $976,905 due to the increase in property values offset by the 1/10 reduction in the millage rate. The City’s assessed value as reported by the Property Appraiser is $13,781,795,040, which is a $1,145,952,354 increase over 2021-2022. The recent history of the City’s taxable values is provided below.
|Current Year Adjusted Values||13,584,165,132||11,338,676,927||10,971,897,147||10,648,993,425||11,089,118,428|
|Plus New Construction||197,629,908||1,297,165,759||943,614,945||919,502,238||31,417,157|
|Total Estimated Taxable Values||13,781,795,040||12,635,842,686||11,915,512,092||11,568,495,663||11,120,535,585|
|Total Final Taxable Values||13,781,795,040||12,380,589,679||11,522,719,072||11,197,015,109||10,888,799,800|
|Change from Prior Year||11.32%||7.45%||2.91%||2.83%||(0.28%)|
Franchise fees are estimated to increase by $575,000. The City entered into an agreement with Florida Power & Light for franchise fees to be paid monthly effective as of May 2020. Due to the new construction being added to the tax roll, higher proposed revenues are anticipated. Utility tax revenues are estimated to increase by $50,000 due to new construction being added to the tax roll. Communications Services Tax revenues are expected to decrease slightly by $20,000. Revenues from licenses/permits are expected to decrease by $2,000 primarily related to the reduction in vacant property registry. Intergovernmental revenues for state revenue sharing are projected to increase by $79,812 and local government half-cent sales taxes are expected to increase by $165,116 over the prior year. Charges for services are expected to increase by $202,500 over the prior year. This is primarily due to the parking fee collections of $31,000, recreational programs of $166,500 and Police overtime reimbursements from the federal government of $5,000. Fines and forfeitures are estimated to increase by $335,000 due to increased parking fines and code compliance citations. Miscellaneous revenues are expected to increase by $366,575 primarily due to rental income from the Navarro property. Transfers In are estimated to increase by $4,560,307 due to the American Rescue Plan Act funds being transferred to the General Fund and utilized for the provision of governmental services.
The proposed General Fund budget expenditures (not including transfers out to other funds) increased to $44,461,238, which represents an increase of $1,875,658, or 4.4%, from fiscal year 2021-2022.
|FY 2022/2023||FY 2021/2022|
|General Fund Total||$105,849,245||$87,212,386|
|General Fund Expenditures||$44,461,238||$42,585,580|
|Increase in Expenditures||$1,875,658|
|% Increase from FY 2021/22||4.4%|
Expenditures have increased primarily due to: (1) compensation adjustments, retirement system contributions, and health insurance ($1,821,063), (2) additional departmental needs ($456,874) offset by (3) a reduction in debt payments due to lower principal payments (-$8,868) and a reduction in capital outlay needs (-$333,411), and a reduction in other disbursements for election expenses (-$60,000).
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 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 $3,294,572.
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 coming year, we are gearing up for the new legislation recently passed, Senate Bill 4-D, requiring proactive milestone inspections of condominiums. Revenues, not including appropriated fund balance, are $3,598,762, a decrease of $1,454,238 from the prior year, and expenditures are $5,252,959, an increase of $1,122,200 from the prior year. The excess of expenditures over revenues this fiscal year are funded by the carryover (fund balance) of previous years revenues.
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 $1,417,887, a decrease of $205,955 from the prior year. The Public Arts Advisory Committee (PAAC) Public Art Program was approved, and Commission adopted in 2020. The program contains, a Five-Year Strategic Work Plan with one of the first projects involving a meditation garden located in the western area of Town Center Park. This project is fully funded for, and construction is expected to begin this year.
Sunny Spaces was developed in celebration of the City’s 25th Anniversary and under the initiative of the Public Art Program. The Sunny Spaces Art Contest launched in May 2022 and received over 78 eligible submissions from 59 different artists. The community was asked to paint, or hand draw an original piece incorporating the theme of a sun. Up to 25 submissions will be recreated as a public art installation within the City. Sunny Spaces aims to bring the community together through the visual arts by co-creating artistic spaces curated by our residents. The goal is to shed light on our talented artists while increasing accessibility to the arts in our community. Sunny Spaces aspires to be the premier showcase of local art for our community. Sunny Spaces and Gateway Artway will be unveiled in Winter 2023 and will be publicly accessible for residents and visitors to enjoy, including art activations at city events.
American Rescue Plan Act of 2021 Fund
This fund was created to segregate fiscal recovery funds as a result of the United States Congress passing the American Rescue Plan Act (“ARPA”). It was signed into law creating the Coronavirus Local Fiscal Recovery Fund for the purpose of providing funds to local governments in order to facilitate the ongoing recovery from the COVID-19 pandemic (“fiscal recovery funds”). ARPA allocated over $7 billion for making payments to metropolitan cities.
The City entered into an agreement in September 2021 with the State of Florida, Division of Emergency Management as a non-entitlement unit to receive its allocation of $10,920,613 from the state. The first half of the allocation was received in October 2021 and the second half was received in August 2022.
The total allocation will be utilized for the provision of government services and necessary investments in water and sewer infrastructure.
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 $1,002,000, which is primarily 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 Fuel Tax, and transfers in from the Stormwater Operating Fund, as available. Accumulated fund balance (carryover) will be utilized for drainage. The City is in the design phase of the Central Island Drainage Project to improve its stormwater pumping capacity.
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, and pedestrian safety. 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 $26,726,614 (including $19,316,614 carryover from the 2021-2022 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.
In conclusion, our 2022-2023 Fiscal Year Budget is one that is presented with transparency and represents our meetings with elected officials both individually and as a group, as well as, meeting with members of the public to ensure that their needs and requests were heard. Our goal is to maintain fiscal responsibility while providing the utmost level of high-quality services our residents and visitors have come to expect. This work could not have been accomplished without the input and vision of the Mayor, Vice Mayor and Commissioners, the direction of our Finance Director, Tiffany Neely and the Finance Department team, and our Department Directors. On behalf of Deputy City Manager Susan Simpson, and Assistant City Manager Audra Curts-Whann, we express our sincere thanks and gratitude.