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Budget Focus

Budget Focus. To prepare a structurally balanced general operating budget with recurring revenues supporting recurring expenditures. To provide a budget, which conforms to Generally Accepted Accounting Principles as applicable to local governments.

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Budget Focus

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  1. Budget Focus • To prepare a structurally balanced general operating budget with recurring revenues supporting recurring expenditures. • To provide a budget, which conforms to Generally Accepted Accounting Principles as applicable to local governments. • To present a budget using the current financial resource measurement focus and the modified accrual basis of accounting as reported in the City of Miami CAFR. • To receive citizen feedback to ensure the upcoming budget is consistent with the needs of our citizens. 1

  2. The Budget Process 2

  3. Budget Issues • House Bill 1B • Other Post Employment Benefits • Fire Assessment 3

  4. House Bill 1B • Passed by Florida Legislature on June 14, 2007. • Contains two provisions: maximize property tax revenue and limit property tax revenue growth in future years. • The statutory allowed operating millage will limit the amount of property tax revenue the City can collect in FY’08. • Limit City’s operating millage rate to rolled back rate. • Not applicable to voted debt. 4

  5. Impact of House Bill 1B • As a result of HB 1B, the City’s maximum operating millage rate is limited to the rolled back rate of 7.2999 mills. • The proposed operating millage rate is the lowest rate since FY’81. • Total property tax revenue reduction of $31.6 million. • Will reduce property tax on homestead property by an average of 7 ½ percent on the County-wide millage rate. • The City Commission may increase the operating millage rate above the rolled back rate. 5

  6. OPEB • In FY’08, the City of Miami will be required to account for retiree health care benefits and other post employment benefits (OPEB) in a similar manner to that required for pension benefits. • Actuarial evaluation to determine the total unfunded liability. • Liability will be required to be recorded on the financial statement in FY’08. • The City of Miami will make its required annual contribution in FY’08. 7

  7. Fire Assessment • FY’07 Adopted Budget included $4.5 million from fire assessment. • Fire assessment revenues not included in the FY’08 Proposed Budget. • Will require the General Fund to support Fire Rescue capital requirements in future years. 8

  8. General Fund 9

  9. Revenues (Inflows) –General Fund $523,713,803 10

  10. Revenue (Inflows) –General Fund • Overall, total revenues will increase $15.6 million over the prior year adopted budget. Compared to actual increases of $48.6 million in FY’06, $28.8 million in FY’05, and $46.3 million in FY’04. • Property tax revenue increase of $5.65 million. Compared to actual increases of $41 million in FY’06, $35.3 million in FY’05, and $19.6 million in FY’04. • Elimination of non ad valorem revenues from Fire Assessment. FY’07 Adopted Budget included $4.5 million. • $7.5 million increase in FPL Franchise Fees as a result of pending change in FPL contract. Increase based on change in fee calculation method and prior 4-year historical trend. 11

  11. Revenue (Inflows) –General Fund • 76% or $5.6 million of Local Option Gas Tax will be transferred into the General Fund. The remaining 24% or $1.8 million will be used for payment of Street Bonds in Special Obligation Bonds Fund. • Increase in Licenses and Permits of $3.1 million from anticipated collections in Waste Hauler Permit Fees. • $15.55 million dollar use of fund balance for Fire Assessment settlement payment. 12

  12. Expenditure (Outflows) –General Fund $523,713,803 13

  13. Expenditure (Outflows) –General Fund • Overall, total proposed expenditures will increase $15.6 million over the prior year adopted budget. Compared to actual increases of $33.2 million in FY’06, $30.3 million in FY’05, and $39.1 million in FY’04. • Reduction in pension cost of $19.1 million primarily from change in FIPO asset valuation method. Total FIPO and GESE administration allocation increased $200k to $4.9 million. • Eliminated 35 full-time vacant positions at a total cost savings of $1.9 million. • Restricted 59 full-time vacant positions to be filled at a later period in FY’08. Total cost savings of $1.8 million. • Reduced allocation to Risk Management by $9 million for insurance and other risk related costs based on four-year average and current year expectation. 14

  14. Expenditure (Outflows) –General Fund • Reduced temporary, part-time, and other personnel costs (i.e. overtime and allowances) by $6 million. • Reduced city-wide operating expense allocation a total of $15.65 million over the prior year adopted budget. Reduction included all city departments and supporting agencies. • Total proposed city-wide reductions = $53.5 million. • Added $2.8 million to Parks and Recreation. $475k –Fern Island Park, $386k Grapeland Park Ball-fields, $988k –Grapeland Water Theme Park, $642k –Little Haiti Park, and $305k –Maceo Park. • Allocated $5 million for annual contribution to OPEB pending completion of actuarial report. 15

  15. Expenditure (Outflows) –General Fund • Allocated $900k for 2007 General Elections. • $420k for Slab Covered Trench Cleaning Project. • $740k for four (4) GEO Vacuum Street Sweepers @ $185,000/vehicle. • $4.8 million for City-wide Fleet replacement. • $15.55 million payment of Fire Assessment settlement. 16

  16. General Fund –Outside Agencies $3,243,312 FY’07 = $336,454 9% FY’07 = $579,865 15% FY’07 = $1,206,238 32% FY’07 = $1,680,955 44% *Does not include $800k in prior year rollovers. 17

  17. Questions 18

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