_EaTHE CITY OF PLEASANT LIV IN G
To:
FROM:
DATE:
SUBJECT:
CITY OF SOUTH MIAMI
OFFICE OF THE CITY MANAGER
INTER-OFFICE MEMORANDUM
The Honorable Mayor & Members of the City Commission
Steven Alexander, City Manager
September 5,2017
Financial Update related to the Proposed Fiscal Year 2017-2018 Projected General Fund
Revenues and Expenses
BACKGROUND:
The City is constantly monitoring Revenue and Expenses throughout the year in an effort to
identify any issues or concerns with meeting the expected projected amounts. The City creates
and posts online the Monthly Budget to Actual Report every month. Currently, the City just
completed the July 2017 Report, which represents the 10th period (83%) of the fiscal year. The
Administration has made modifications to the Proposed FY 2017-18 Budget, originally issued on
July 28,2017, as follows.
REVENUES
The City is currently on-track to remain within budget and meet the overall estimated General
Fund Revenue amount of $18,797,241. The City currently has received 86% of the fiscal year's
General Fund revenue and expended 75% of the general fund appropriated monies; both of
which are consistent with projections based on previous years.
However, one revenue line item, Parking Meters Franchise, is currently 13% below its projected
balance for the 10th period. Finance is estimating that the City will complete the fiscal year
receiving only $1,844,423 of the budgeted $2,167,200, representing approximately 14.8%
reduction of projected revenues.
Furthermore, the City believes that the main reason for the reduction and continuous
downward trend in parking revenue can be attributed to several factors including;
1. ride-sharing programs (i.e. Uber, Lyft) and
2. the closing of key businesses, and more importantly, the delay in reopening of previous
commercial locations.
THE CI TY OF PLEASANT LIVING
CITY OF SOUTH MIAMI
OFFICE OF THE CITY MANAGER
IN T ER-OFFICE MEMORANDUM
3. Reductions in overall consumer traffic in the downtown area, which are in part due to
the metamorphosis that the Shops at Sunset , the "heart" of the commercial ecosystem
in the downtown area, has amplified.
On May of 2016, Miami-Dade County approved the use of Ride Sharing Services, which has
increased the public's use of Uber and Lyft . The rising popularity of ride-hail companies like
Uber and Lyft in South Miami is causing fewer drivers to park in South Miami, Miami-Dade
County, and around the entire Country. Not only has parking been affected, but all public
transit has been impacted. As stated in the New Times article on August 18, 2017, "People
have begun to switch to Uber and Lyft, preferring the comparably priced, comfortable options
to public transit." Parking systems, such as South Miami's, are beginning to see the major
impacts on Parking Revenues from ride sharing programs. We project that there is going to be
continued negative impacts related to parking revenues as ride -hailing services and self-driving
cars gain popularity around the country.
Parking Transactions are defined as each time a parking customer pays for a parking space.
Below please find the number of Parking Transactions by Period :
Parking Transactions from 10-1-2014 through 7-31-20 15
Parking Transactions from 10-1-2015 through 7-31-2016
Parking Transactions from 10-1-2016 through 7-31-2017
No. of
Tran sact ions
819,424
799,247
705,436
%of
Change
{-3%}
{-13%}
Based on the above and considering current t r ends related t o ride-sharing, the City is
estimating 15% less in parking reve nu e in its current fiscal year as well as the upcoming FY
2017-18 budget, than what was budgeted in FY 2016-17. Al t hough many shopping areas
nationally are experiencing significant retail closures due to the increasing competition of the
internet and new efforts from companies such as Amazon, South Miami is undergoing an
exaggerated difficult period as it awaits the reincarnation of t he Shops at Sunset. Until that
point, it is important that the City prepa r e for future reductions i n parking revenues and look
for other ways to generate revenues.
As mentioned previously, businesses periodically close in the normal retail environment and is
to be expected, however, when commercial locations rema i n vacant for a long period, then
there is heightened concern and cause for developing and implementing alternative strategies.
Attached please find an Updated General Fund Revenues Estimated for FY 2016-17 and
Projections for FY 2017-18. Items in the FY 2017-18 schedule, which are in bold, are the
amounts which have been revised. Finance has included a column which states the actual
revenues received since July 31,2017. Based on the new estimates and projected revenues for
CI T Y OF SOUTH MIAMI
OFFICE OF THE CITY MANAGE R
iN T ER-OFF iCE MEM ORANDUM
THE CITY OF PLEASAN T LIVING
FY 2017-18, the City has reduced overall revenue projections for FY 2017-18 by an amount of
$280,250.
Recently the issues of outstanding litigation liabilities and payroll expenses related to the Police
Union Agreement, have been raised, both of which can negatively affect the General Fund and
the Unreserved, Uncommitted Fund Balance .
As provided within the Fiscal Year 2016 Comprehensive Financial Annual Financial Report, on
page 46:
The City is exposed to various risks of loss related t o torts, theft of,
damage to and destruction of asse t s, errors and om issions and natural
disasters for which the City carries commercial insu r ance. The City has
not had a significant reduction in insurance coverage from coverage in
the prior year by major categories of risk, and settled claims have not
exceeded the City's retention and excess coverage in f o r ce for each of
the past three years.
The City currently has pending litigation with a former employee, for
which a liability has not been recorded. A trial judge has entered a final
judgment finding for breach of contract. It is the City Attorney's
recommendation that the City appeal the final judgment. While the City
does not believe that the plaintiff is entitled to any money or any
attorney fees, if the appellate court disagrees w ith t he City's lega l
assessment of liability and damages, there is a potential estimated
liability of approxima t ely $ 1.2 million, including attorney fees and
interest.
The City continues to negotiate with the Police Lower Unit FOP Union, and any amount of salary
increase which is negotiated and agreed to by both parties will be expended from the General
Fund, Unreserved, Uncommitted Fund Balance.
The City will continue to monitor revenue and expenses and provide any recommended
revisions as more information becomes available .
Clearly this downward trend is going to continue for some time before it rebounds, if indeed it
does.
EXPENSES
Based preferences communicated by the Mayor and City Comm ission during Budget Workshop
held on Monday, August 14, 2017, the Administration has made modifications to expenses in
the Proposed FY 2017-18 Budget, originally issued on July 28,2017, as follows.
THE CITY O F PL EA SAN T LI VING
HIGHLIGHTS
General Fund
CITY OF SOUTH MIAMI
OFFICE OF THE CITY MANAGER
INTER-OF FIC E M EMORANDUM
The Administration is proposing an overall reduction to the General Fund of approximately
$77,127. This net reduction is primarily due to the following adjustments:
The reduction of the anticipated health insurance premium amount due to savings negotiated
by the Administration, elimination of two part-time positions within the Code Enforcement and
Personnel Division and reductions in the payroll portion of the Police Department due to
personnel changes.
Recent lawsuit activity suggests the immediate addition of softwa r e providing closed captioning
for the hearing impaired, and an inexpensive system to streamline the agenda preparation
process and make the entire legis l ative agenda process more efficient, in the expenditure line-
item amount for Granicus which is increased for FY 2017-18 by $29,170.
Capital Improvement Program (CI P) Fun d
An overall increase of $290,000 is proposed for the CIP Fund. One significant change is related
to the fence along the property located at 6609 SW 60 th St r eet (Girl Scout Park), which has been
reduced by $150,000. $50,000 remains allocated from the previously proposed $200,000, to
create parking improvements on the western edge of the property. Additionally, $500,000 has
been allocated for South Miami Downtown Improvements in response to discussions on the
Dias and from the businesses in the SoMi shopping area.
Attached is the revised General Fund Summary for the Proposed FY 2017-18 Budget, which
reflects the changes in fund balance within the General Fund as a result of these adjustments.
RECOMMENDATION
Based on the revisions provided above and attached, the Ci t y 's General Fund reflects an
Operating Net Difference of a positive $107 for FY 2017-18. The budget as proposed and
revised remains balanced.
It is recommended that the City Commission recognize that without a raise of the parking fee
rate, which we do not recommend, the City shou ld discuss increasing revenues from different
sources.
ATTACHMENTS:
FY 2017-2018 General Fund Summary
FY 2017-2018 Updated General Fund Revenues
Expenditure -Changes to FY 2017-2018 Proposed Budget After Budget Workshop 8.14.17
FY 2017-2018 GENERAL FUND SUMMARY
DEPT ACCOUNT ACTUAL ACTUAL BUDGET ESTIMATE CM RECOM
NO CLASSIFICATION FY 14/15 FY 15/16 FY 16/17 FY 16/17 FY 17/18
BEGINNING FUND BALANCE 9,065,560 7,442,404 8,020,891 8,020,891 6,345,023
TAXES 8,651,318 8,877,606 9,010,751 9,319,487 9,634,176
FRANCHISE FEES 2,384,287 2,178,530 2,198,100 2,115,072 2,200,250
INTERGOV REVENUE 1,473,771 1,497,702 1,682,640 1,506,650 1,393,350
CHARGES FOR SERVICES 4,375,952 4,431,588 4,544,820 4,325,340 4,217,670
FINES AND FORFEITURES 166,017 339,301 570,680 578,930 645,000
MISCELLANEOUS REVENUES 495,490 535,783 405,785 589,374 409,243
TOTAL 17,546,835 17,860,510 18,412,776 18,434,853 18,499,689
OTHER FINANCIAL SOURCES 384,465 434,465 384,465 384,465 284,465
DEPARTMENTS
1100 CITY COMMISSION 84,318 82,314 140,158 129,265 135,923
1200 CITY CLERK 278,316 371,766 416,543 401,863 497,561
1500 CITY ATIORNEY 456,059 456,881 479,246 479,246 493,049
1310 CITY MANAGER 567,377 634,760 799,913 702,823 817,890
1410 FINANCE DEPARTMENT 1,162,733 1,019,490 1,171,682 1,165,142 1,189,919
1340 INFORM . TECH. DIVISION 286,223 327,095 401,398 389,759 411,356
1320 PROCUREMENT DIVISION 218,133 224,399 245,238 238,588 240,099
1330 PERSONNEL DIVISION 635,666 807,079 807,079 791,079 799,144
1610 BUILDING DEPARTMENT 466,478 468,027 504,177 497,425 559,652
1620 PLANNING DEPARTMENT 340,022 385,399 553,333 537,689 564,896
1640 CODE ENFORCEMENT 368,269 379,543 379,543 363,433 360,696
1770 PW-OFFICE OF DIRECTOR 222,634 219,033 236,340 235,140 238,846
1710 PW-BLDG . MAl NT. 4 50,130 371,902 446,455 418,065 473,674
1720 PW-SOLID WASTE 1,355,551 1,327,948 1,414,573 1,391,523 1,436,961
1730 PW-STREETS MAl NT. 450,688 518,589 630,330 626,530 676,816
1760 PW-MOTOR POOL 474,700 482,191 596,203 553,852 560,895
1790 PW-ENG . & CONSTR . 196,016 180,393 233,713 226,283 201,510
1910 POLICE 5,912,886 5,688,064 6,765,100 6,626,687 6,701,502
2000 PARKS & RECREATION 515,603 518,721 662,793 650,963 666,574
2010 TENNIS ° 209,652 323,982 314,882 348,954
2020 COMMUNITY CENTER 539,746 565,074 674,219 674,219 663,561
1750 LANDSCAPE MAl NT . 426,756 500,567 576,827 488,242 501,666
2030 COMMUNITY POOL 90,915 92,438 145,910 128,070 142,903
2100 NON-DEPARTMENTAL 91,879 94,645 90,000 103,295 100,000
TOTAL 15,591,098 15,925,970 18,694,755 18,134,063 18,784,047
OPERATING NET DIFFERENCE 2,340,202 2,369,005 102,486 685,255 107
2100 NON-DEPARTMENT TRANSFER 3,963,358 1,790,518 2,361,123 2,361,123 4,062,744
ENDING FUND BALANCE $7,442,404 $8,020,891 5,762,254 6,345,023 2,282,386
Page 1
FY 2017-2018 UPDATED GENERAL FUND REVENUES
ACTUAL ACTUAL BUDGET ESTIMATE ESTIMATE CM RECOM
ACCTNO. ACCOUNT CLASSiFICATiON FY 14/15 FY 15/16 FY 16/17 AS OF 7/31/2017 FY 16/17 FY 17/18
TAXES
0010000 3111000 AD VALOREM TAXES 5,420,377 5,810,996 6,281,966 6,273,137 6,281,966 6,641,944
0010000 3112000 AD VALOREM DELINQUENT 158,944 28,605 30,000 39,572 39,572 30,000
0010000 3112100 INTEREST 431 510 500 918 922 500
0010000 3121000 LOCAL OPTION TAXES 205,216 205,094 205,964 175,083 205,964 202,084
0010000 3141000 UTILITY TAX-ELECTRIC 1,367,020 1,377,801 1,350,000 1,004,243 1,387,000 1,350,000
0010000 3144000 UTI L1TY TAX -GAS 66,725 33,241 50,000 25,516 50 ,000 50,000
0010000 3149000 UTILITY TAX -OTHER 198,323 209,883 170,000 168,896 205,000 205,000
0010000 3150000 UNIFIED COMM SERVICES TAX 543,152 484,835 4 15,485 356,047 438,000 437,148
0010000 3161000 LOCAL BUSINESS TAX-RENEWALS 575,307 599,805 580,300 596,141 596,141 595,000
0010000 3162000 LOCAL BUSINESS TAX NEW 100,921 105,073 120,000 80,415 90,000 105,000
0010000 3162100 BUSINESS TAX TRANSFER FEES 2,402 4,263 2,500 2,922 2,922 2,500
0010000 3163000 LOBBYIST REGISTRATION FEE 12 ,500 17,500 10,000 22,000 22,000 15,000
TOTAL TAXES 8,651,318 8,877,606 9,216,715 8,744,890 9,319,487 9,634,176
FRANCHISE FEES
0010000 3221000 BUILDING PERMITS 1,113,561 1,074,863 900,000 694,007 832,808 900,000
0010000 3221500 PUBLIC WORKS PERMITS 0 0 20,000 34,276 34,276 25,000
0010000 3231000 ELECTRICITY 1,239,099 1,069,285 1,200,000 744,738 1,210,000 1,240,000
0010000 3234000 GAS 0 33,713 33,000 37,388 37,388 35,000
0010000 3291000 PENALTIES LOCAL BUSINESS TAX 31,507 589 0 0 0 0
0010000 3293000 GARAGE SALES 120 80 100 600 600 250
TOTAL FRANCHISE FEE5 2,384,287 2,178,530 2,153,100 1,511,009 2,115,072 2,200,250
INTERGOVERNMENTAL REVENUE
0010000 3351012 STATE REVENUE SHARING 417,118 423,005 415,050 340,544 430,000 402,744
0010000 3351015 ALCOHOLIC BEVERAGE LlCENS 10,752 18,692 15,000 14,215 16,650 15,000
0010000 3351018 LOCAL GOVT 1/2 C SALES TX 1,030,028 1,039,771 1,031,626 874,387 1,045,000 960,606
0010000 3382000 COUNTY LOCAL BUSINESS TAX 15,873 16,234 15,000 8,664 15,000 15,000
TOTAL INTERGOVERNMENTAL REVENUE 1,473,771 1,497,702 1,476,676 1,237,810 1,506,650 1,393,350
CHARGES FOR SERVICES
0010000 3412000 ZONING HEARING FEES 67,119 74,850 35,000 45,000 46,500 32,000
0010000 3413000 ENVIRON REVW & PRESVT BRD 77,115 44,188 75 ,000 28,425 35,000 40,000
0010000 3413001 LIEN SEARCH FEES 15,410 ' 15,555 15,000 12,495 13,000 15,000
0010000 3413002 SPECIAL EVENTS 2,740 2,660 3,320 1,980 3,320 3,320
0010000 3414000 MICROFILM SALES 1,637 1,623 1,500 1,512 1,600 1,600
0010000 3419010 BLDG & ZON REINSPECT FEES 565 750 300 650 700 500
0010000 3419030 CERT OF USE/OCCUPANCY 30,800 26 ,250 22,000 33,825 34,000 26,250
0010000 3419040 CODE ENFORCEMENT FINES 131,909 97,725 130,000 98,552 118,262 115,000
0010000 3419051 BACKGROUND NOTARY&COPIES 12 ,862 18,761 12,000 17,738 17,825 16,000
0010000 3421010 POLICE SERVICES 31 ,838 47,773 35,000 25,024 35,000 35,000
0010000 3421021 TOWING ADMIN FEE 4,555 5,790 5,000 3,265 5,000 5,000
0010000 3421025 SCHL CRSNG GRDS-CTY REIM 23,567 24,495 23,000 16,026 23,000 23,000
0010000 3434100 SOLID WASTE CHARGES 11,866 16,107 12,000 22 ,380 24,500 20,000
Page 1
ACTUAL ACTUAL BUDGET ESTIMATE ESTIMATE CM RECOM
ACCTNO. ACCOUNT CLASSIFICATION FY 14/15 FY 15/16 FY 16/17 AS OF 7/31/2017 FY 16/17 FY 17/18
0010000 3434200 PRIVATE HAULERS PERMIT FEE 609 ,580 570,092 530,000 577,1 01 585,000 575,000
0010000 3445100 PAR KING PERMITS 101,859 106,401 90,000 86,047 100,000 100,000
0010000 3445200 PARKING METERS FRANCHISE 2,173,616 2,005,710 2,167,200 1,537,018 1,844,423 1,840,000
0010000 3445210 VALET PARKING 69,165 92,120 74,000 49,835 59,802 58,000
0010000 3445220 PARKING FUND REVENUE 31 ,8 60 16 ,849 25,000 50 ,818 50,818 35,000
0010000 3445300 PARKING VIOLATIONS 783,526 774,693 750,000 509,267 780,000 767,000
0010000 3472620 TENNIS COURT FEES 28,414 257,396 340,000 312,267 367,000 389,000
0010000 3472630 RECREATION PROGRAM FEES 82,479 112,116 98,000 86,763 98,000 45,000
0010000 3472631 MULTIPURPOSE CNTR-RENTAL 33,188 65,174 42,000 14,456 20,000 19,000
0010000 3472632 MULTIPRPOSE CNTR-MEMBERSHIP 11,831 11,913 11,000 10,671 11,500 8,000
0010000 3472635 REC FEES/MURRAY PARK POOL 5,846 4,877 5,500 9,333 9,500 6,000
0010000 3472650 S MIAMI PARK SOCCER 32 ,605 37 ,500 40,000 20,000 40,000 40,000
0010000 3472660 CONCESSION STANDS 0 220 3,000 1,590 1,590 3,000
TOTAL CHARGES FOR SERVICES 4,375,952 4,431,588 4,544,820 3,572,038 4,325,340 4,217,670
FINES AND FORFEITS
0010000 3511200 METRO COURT FINES 78,956 53,063 80,000 32,824 60,000 60,000
0010000 3511210 RED LIGHT CAMERAS 0 156,067 4 08,680 264,014 408,680 480,000
0010000 3540000 VIOLATIONS LOCAL ORDINANCES 0 39,387 45,000 38 ,694 45,000 45,000
0010000 3541000 BURGLAR ALARM FINES 52 ,853 47,326 48,000 26,706 30,000 30,000
0010000 3541050 ALARM REGISTRATION CHG 34,208 43,458 34,000 34,950 35,250 30,000
TOTAL FINES AND FORFEITS 166,017 339,301 615,680 397,188 578,930 645,000
MISCELLANEOUS REVENUES
0010000 3612000 INTEREST INCOME 83,432 93,172 90,000 80,461 90,000 93,000
0010000 3621100 PARKING GARAGE RENT 87,758 89,850 75,996 70,547 75,996 75,996
0010000 3622000 FASCELLPARK 20,583 23,021 25,000 23 ,903 30,000 25,000
0010000 3623000 BUS BENCH ADS 14,268 14,760 16,300 14,685 16,920 16,920
0010000 3625000 RENT e.A .A . 27,000 22,000 27,000 22 ,000 34,000 27,500
0010000 3627500 SOUTH MIAMI MIDDLE SCHOOL 21,202 21 ,075 21,273 21 ,328 21,328 21,000
0010000 3629000 PALMER PARK RENTALS 40,133 23 ,965 30,000 22,359 30 ,000 25 ,000
0010000 3669000 HOSPITAL LANDSCAPE REVENU 5,710 8,920 7,264 7,264 7,264 5,875
0010000 3669100 DONATION 20,251 29,480 0 38,060 38,060 0
0010000 3695000 REIMB WORKERS COMP o 19,736 24,531 0 19,395 19,395 0
0010000 3695400 REIMBT-PUB WORKS LABOR 12,911 16,312 0 1,643 1,643 0
0010000 3697000 GAIN/LOSS ON ASSET SALE 8,700 22,635 0 7,979 7,979 0
0010000 3699201 MISe. OTHERS 21,676 17,884 15,000 86,713 89,500 15 ,000
0010000 3699225 SUNSET DR MTCE-FDOT REIMB 2,985 3,980 3,952 2,985 3,952 3,952
0010000 3699250 INSURANCE CLAIMS RECOVERY 14,501 20 ,903 0 29,337 29,337 0
0010000 3699501 SECTION 185 STATE CONTRIB 94,644 103,295 94,000 0 94,000 100,000
TOTAL MISCELLANEOUS REVENUES 495,490 535,783 405,785 448,659 589,374 409,243
TOTAL GENERAL FUND 17,546,835 17,860,510 18,412,777 15,911,594 18,434,854 18,499,689
0010000 3811000 CONTRIB FROM OTHER FUNDS 25 ,000 25 ,000 25,000 25 ,000 25 ,000 25,000
0010000 3811500 TRANSFER WATER/SEWER FUND 250,000 250,000 250,000 250,000 250,000 150,000
0010000 3811700 TRANSFER FROM CRA 109,465 159,465 109,465 109,465 109,465 109,465
TOTAL OTHER FINANCIAL SOURCES 384,465 434,465 384,465 384,465 384,465 284,465
Page 2
CHANGES TO FY2017-2018 PROPOSED BUDGET AFTER BUDGET WORKSHOP 8.14.17
GENERAL FUND
Dept./Division Account # From To Dit! +/-Description
City Clerk's Office 0011200-5123450 19,680 48,850 29.170 Granic us Meeting Efficiency Software & Close Caption in g
Perso nn el Division 0011330-5131210 184.863 167.715 -17.148 Part-Tim e position Eliminated
Code Enforcement Divis ion 0011640-5241210 327,451 311.891 -15.560 Part-Time position Eliminated
Public Works-Sol id Waste 0011720-5343470 92.000 93.000 1.000 Residential Recycl ing County Fee In crease
Pub lic Works-Solid Waste 0011720-5345210 88.500 68.500 -20.000 Garbage Containers Rep lace m ents
Police Department 00119 10-52 11 210 5.392.92 1 5.355.939 -36.982 Ueutenant with Lower Sa lary and Upper Unit COLA
Pa rks & Rec -Tennis 0012010-572 3450 99,456 114,456 15.000 Expected Increase in Te nnis Clas ses
Helth Benefits Various 1.056.284 1.023.677 -32 .607 Health Benefits have been decreased by 3%
Total GF -77.127
TREE TRUST FUND
Dept./Division Account # From To Dit!+/-Desaiption
Tree Trust Fund Contractua l 1181750-5193450 10.000 25.000 15.000 $5.000 reduction in Citywide Landscaping Progr am and $20.000
added to purcha se shade trees for South Miami Pa r k
Total TTF 15.000
PTP
Dept./Divisi on I Account # I From To I Dit! +/-Desaiption
People's Transportation Fund I 1241790-5416490 I 0 20.000 1 20.000 Citywide Sidewalk Repairs
Total PTpl I I 20.000
OPFUND
Dept_/Divisi on Account # From To Dit! +/-Desaiption
ClP-Finance/M IS 3011340-5136430 250.000 200.000 -50.000 Reduced by $50.000 due to the Elimination of the Proposed WI-FI at
Palmer Park
CIP-Streets and Land scaping 3011730-54 16450 260.000 275.000 15.000 $5.000 Re duced for Tree Planting and $20.000 added to purchase
shade trees for South Miami Park
$200.000 eliminated for the installation of a fence around 6609 SW
ClP-Eng ineering and Const 3011790-5196450 785.000 1.160.000 375.000 60th St and $50.000 added for parking repa irs at the sa me location.
Also. $25.000 all ocated to fund Solar for Public Works Bui lding and
$500.000 for Downtown Impr ovements
CIP-P&R-Community Center 3012020-5726450 160.000 110.000 -50.000 $50.000 red uction due to the elimination of the Co st Benefit Study
for the Community Center and the Pool
Total CIP 290000
8/28/20175:14 PML:\Budget Preparation 2017-2018\Budget Workshop 8-14-2017\Budget Changes After Budget Workshop 8.14.17.xlsxBudget Changes After Bu dget
Workshop 8.14.17 .xlsxSheetl