07-31-07 Item 13CITY OF SOUTH MIAMI
OFFICE OF THE CITY MANAGER
INTER - OFFICE MEMORANDUM
To: The Honorable Mayor Feliu and Members of the City Commission
From: Yvonne S. McKinley, City Manager
Date: July 31, 2007
Agenda Item:
Subject: Tentative Millage Rate for FY 2007 -08
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Request: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF SOUTH MIAMI, FLORIDA, RELATING TO THE CITY'S 2007/2008 FISCAL
YEAR BUDGET; ADVISING THE MIAMI -DADE COUNTY PROPERTY
APPRAISER OF ITS PROPOSED MILLAGE RATE OF 5.8810 MILLS; ITS
ROLL -BACK RATE OF 5.07160 MILLS AND ANNOUNCING THE DATES OF
PUBLIC HEARING TO CONSIDER THE PROPOSED MILLAGE RATE AND
TENTATIVE BUDGET; PROVIDING AN EFFECTIVE DATE.
BACKGROUND & ANALYSIS
The procedures and timetables for taxation and the establishment of the Budget are governed by a
series of rubes by the State of Florida. These rules are generally referred to as TRIM (Truth in
Millage). This resolution deals with the establishment of the maximum millage rate, rollback
millage rate, and scheduling formal budget public hearings in accordance with TRIM..
MAXIMUM MILLAGE RATE
A primary source of revenue for municipal government is the property or ad valorem tax.
Property taxes apply to commercial and residential real property and also for commercial
personal property. The rate at which property is taxed is referred to as the millage rate. The
amount of taxes paid by a property owner is determined by multiplying the millage rate times
each $1,000.00 of assessed property value.
Local jurisdictions are required, at the beginning of the budget process, to establish a maximum
millage rate. This rate will be advertised by the City and also delivered to the Miami -Dade
Property Appraiser. The rate can be decreased by the Commission during the budget process, but
it cannot be increased except under extraordinary circumstances. The current millage rate is
5.8810 mills.
The Miami -Dade County Property Appraiser has certified the Taxable Value within the City of
South Miami at $1,641,875,823. This valuation represents a 17.038% increase over the
FY 2006 -07 level of $1,422,695,591.
It is important to highlight that while the total assessed value of property increased, this is not
reflected in an individual homeowner's assessment. Homeowners are taxed based on the assessed
value of their home, not the appraised or fair market value of their home. State law protects
homeowners from rapidly increasing property values. The amount of the annual increase in
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assessed value is limited to 3% or the Consumer Price Index (CPI), whichever is less. The CPI for
2007 used by the Miami -Dade Property Appraiser was 4.9 %. Homeowners who have owned their
property for any length of the time are taxed at their assessed value, which is much less than the
appraised value of their home. The increase in the overall assessment is due primarily to three
factors: new 6onstruction, resale of existing homes, and increased value of commercial property.
Commercials property is not subject to the 3% cap. A homeowner may have seen a 117.038%
increase in the value of their home this past year, but the taxable or assessed value can go up by
no more than 3 %.
I am therefore recommending a millage rate for this fiscal year of 5.881 mills. This level is will
allow this City to continue with on -going projects which, for the 2008 -2009 Fiscal Year may be
diminished greatly if proposed changes are passed. These factors are in addition to the new
Florida Statutes limiting the growth of taxing levels. The Commission, will still have the ability
to consider Dowering the rate during the budget hearings.
Rollback Millage Rate
Cities are also required to calculate what is known as the "Rollback Millage Rate ". This is the tax
rate at which the City would receive the same revenue as in the previous year. In areas such as
South Miami where there has been an overall increase in the total assessed property value, the
rollback millage rate is lower. The rollback millage rate for South Miami is 5.07160 mills.
Budget Hearing Schedule
The City is required to hold two formal Budget Public Hearings. There are guidelines on when
these hearings must be held. Additionally, a local municipality cannot hold a budget hearing on
the same date as either the County or the School Board. There are also special advertising
requirements for these hearings.
It is recommended, given these constraints, that the following schedule be established:
First Budget Hearing Tuesday September 11, 2007 City of South Miami City Hall
7:30 PM Commission Chambers
6130 Sunset Drive
South Miami, FL 33143
Second Budget Hearing Tuesday, September 25, 2007
7:30 PM
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City of South Miami City Hall
Commission Chambers
6130 Sunset Drive
South Miami, FL 33143
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RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF SOUTH MIAMI, FLORIDA, RELATING TO THE CITY'S
2007/2008 FISCAL YEAR BUDGET; ADVISING THE MIAMI -DADE
COUNTY PROPERTY APPRAISER OF ITS PROPOSED MILLAGE
RATE OF 5.8810 MILLS; ITS ROLL -BACK RATE OF 5.07160 MILLS
AND ANNOUNCING THE DATES OF PUBLIC HEARING TO
CONSIDER THE PROPOSED MILLAGE RATE AND TENTATIVE
BUDGET; PROVIDING AN EFFECTIVE DATE.
WHEREAS, Florida Statute 200.065 requires; (1) that within 35 days of Certificate of Value; (2)
"each taxing authority shall advise the property appraiser of its proposed millage rate, of its rolled -back
rate computed pursuant to sub - section; (3) and of the date, time and place which a public hearing will be
held to consider the proposed millage rate and tentative budget "; and
WHEREAS, the Certification of Value was made on June 29, 2007; and
WHEREAS, the City Administration has computed the proposed millage rate and the rolled -back
rate; and
WHEREAS, the Mayor and City Commission wish to comply with the aforesaid Statute.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF
THE CITY OF SOUTH MIAMI, FLORIDA:
Section 1. That the City Administration advises the property appraiser that the proposed
millage rate of the City of South Miami, Florida for the 2007/2008 fiscal year budget is 5.8810 mills. The
rolled -back rate computed pursuant to sub - section (1) of Florida Statute 200.065 is 5.07160 mills.
Section 2. That date, time and place at which public hearing shall be held to consider the
proposed millage rate are as follows:
1. First Budget Hearing- September 11, 2007 at 7:30 p.m., in the City Commission Chambers, 6130
Sunset Drive, South Miami, Florida.
2. Second Budget Hearing -, September 25, 2007 at 7:30 p.m., in the City Commission Chambers, 6130
Sunset Drive, South Miami, Florida.
PASSED AND ADOPTED this 31St day of July, 2007.
ATTEST:
CITY CLERK
READ AND APPROVED AS TO FORM:
CITY ATTORNEY
APPROVED:
MAYOR
Commission Vote:
Mayor Feliu:
Vice Mayor Wiscombe:
Commissioner Birts:
Commissioner Palmer:
Commissioner Beckman: