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The City of Lauderdale Lakes

This presentation highlights the challenges faced by the City of Lauderdale Lakes during a financial crisis and the strategies implemented to overcome them. Topics covered include declining taxable value, public safety debt, public scrutiny, budgeting, and performance over politics.

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The City of Lauderdale Lakes

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  1. The City of Lauderdale Lakes Lessons Learned from the City’s Financial Storm Managing a City Through a Financial Crisis…. Jonathan K. Allen, MPA City Manager Broward League of Cities April 16, 2015

  2. Presentation Overview • City of Lauderdale Lakes Facts • The Perfect Storm • Declining Taxable Value • $9.0 Million Public Safety Debt • Heighten Public Scrutiny and Lowered Public Trust • Visual Success Rather Than Failure • Development & Execution of a Strong Budget and Financial Plan • Don't Let a Good Crisis go to Waste • Tune Out the Noise and Criticism • Performance Over Politics

  3. City of Lauderdale Lakes Overview Style of Government • Mayor – Commission – City Manager Population 32,593 City’s Total Area (Sq. Miles) 3.64 Housing Stock 14,283 3,000 Multi-Family 21% 7,000 Condo 49% 4,283 Single Family 30% CRA Area (500 acres/.8609375 sq. miles) 24% Commercial Base 15%

  4. City of Lauderdale Lakes Facts Trend History – Millage Rate Style of Government

  5. City of Lauderdale Lakes Facts Trend History - Taxable Value

  6. City of Lauderdale Lakes Facts The Public Safety Factor - $9,021,129 Debt Repayment Agreement: Broward Sheriff’s Office Police and Fire Services The City has entered into a repayment agreement with Broward Sheriff’s Office (“BSO”) for the repayment of past due consideration for public safety services. Payment of the balance is due semi-annually with a final lump sum payment due in April 2016. Annual interest is at a rate determined by BSO using the Annual County Pooled Cash Rate percentage of September 30, 2013. The outstanding balance on the obligation as of September 30, 2013 was $ 7,021,129. Future payments are due as follows: Year Ending September 30 2014 $ 1,300,000 2015 1,450,000 2016 4,271,129 Thereafter NONE $ 7,021,129 **Renegotiated Balance Request to Reduce BSO Debt by 50%

  7. Public Safety - Police Police FY 2015

  8. Public Safety - Fire Fire FY 2015

  9. Broward County OIG Findings “Gross Mismanagement of Public Funds” February 2012 • City went from $6 Million in General Fund reserves to being unable to pay for BSO public safety services • CRA funds were improperly used for City operating expenses. • Former Finance Director inflated revenue estimates of over $18 Million • City revenue streams were over-estimated in disregard for economic data that showed revenue decreasing • City revenues were declining and expenses were not being reduced

  10. Broward County OIG Findings “Gross Mismanagement of Public Funds” February 2012 • The City Manager was responsible for proposing the Budget but delegated the task to the former Finance Director • In FY2008, the City’s total fund balance declined from $6.3M to $4.4M or by 29.6% • In FY2009, the City’s fund balance declined from $4.4M to $921,853 or by 79.4% • In FY2011, the City owed BSO $9M for public safety services and the CRA $2.5M • City Management & City Commission didn’t monitor and manage it’s budget effectively

  11. New City Management Team ResponseFirst 100 Days Into Recovery – Sept 2011 • Imposed a hiring freeze • Implemented a 10% across the board salary reduction and 3% retirement reduction • Negotiated/Executed a new debt repayment plan for $9M owed to BSO for public safety services • Negotiated/Executed a Forbearance agreement for $2.5M owed to the CRA • Consolidated City Departments to realize cost savings

  12. New City Management TeamFirst 100 Days Into Recovery – Sept 2011 • Held Training Session on Understanding Municipal Financial Management for City Officials • Established & Maintained Open Communication with External Stakeholders • Cooperated with State’s Joint Legislative Auditing Committee and Broward County Auditor to complete external assessments of the City’s financial condition • Established New Monthly Financial Reporting Format and Regular Budget Reports

  13. Visual Success Rather Than Failure

  14. Development & Execution of a Strong Budget & Financial Plan Action Items in Dealing with Financial Crisis…. • Developed a Balanced and Conservative Budget • Developed 5-Year City Financial Plan • Adopted City Financial Integrity Principals and Financial Procedures • Produced Monthly Financial Reports by the 15th day of each month • Completed Budget Transition to GASB Requirements • Coordinated Comprehensive Budget & Purchasing Management Workshops with Facilitators

  15. Dr. Lee facilitating City’s Financial Training Session on Understanding Municipal Financial Management

  16. Don't Let a Good Crisis Go to Waste • Dollar Tree Stores • Auto Zone Store • Two Race Trac Developments • Florida Medical Center & Infastructure Investments • American Land Ventures • $50 million Multi-Family Development

  17. Performance Over Politics FY2013 Budget Summary • Adopted budget with a City property tax rate of 9.50 mills • Budget continued the City sound budgeting practices in accordance with generally accepted accounting principles (GAAP) including conservative revenue streams • Budget Trend: Reduction in overall property tax millage rate of -3.11% from the roll back of 9.8046 • Provided funds for law enforcement, emergency medical services and fire rescue services through BSO • Adopted fire assessment fee to pay for operating and outstanding debt costs • Budget provided for the replenishment of Fund Balance of $211,489 • Budget included a slight increase in the tax rate for the voter approved 2005 General Obligation Bond due to increase in the debt service • Funded CRA Forbearance payment in the amount of $150,000 • Funded BSO repayment in the amount of $1,184,500, including interest

  18. Performance Over Politics FY2014 Budget Summary • Adopted budget with a City property tax rate of 9.50 mills • Budget continued the City sound budgeting practices in accordance with generally accepted accounting principles (GAAP) including conservative revenue streams • Budget maintained a reduced City workforce and implemented cost effective service delivery models • Provided funds for law enforcement, emergency medical services and fire rescue services through BSO • Adopted fire assessment fee with increased revenue to cover operating and outstanding debt costs • Budget included a slight increase in the tax rate for the voter approved 2005 General Obligation Bond due to increase in the debt service • Funded CRA Forbearance payment in the amount of $150,000 • Funded BSO repayment in the amount of $1,410,475, including interest

  19. Performance Over Politics FY2015 Budget Summary • Adopted budget reduced the City property tax rate from 9.50 mills to 8.95 mills • Continued the City sound budgeting practices in accordance with generally accepted accounting principles (GAAP) including conservative revenue streams • Received $125,000 Federal COPS Grant to fund a School Resource Deputy positon • Funded general government services including parks and human services, development services, public works, and other municipal services at current levels • Funded law enforcement, emergency medical services and fire rescue services through BSO and related BSO debt obligations • Modified fire assessment fee to include a multi-family category • Continued effective use of City resources • Funded infrastructure and capital improvement projects within the City • Funded the continuation of economic and community development initiatives • Continued improvements to the City’s overall financial condition

  20. Performance Over Politics Grant Awards • $750,000 FEMA Grant for Emergency Operations Center • $400,000 County Recycling Grant • $1.5 million SAFER Grant to restore Fire Services Positions • $521,000 CDBG Grant for Comprehensive Park Improvement • 2013 COPS Grant for $250,000 to fund two School Resource Officer Positions • 2014 COPS Grant for $125,000 to fund a School Resource Officer Position

  21. Proposed FY 2015Assessment Rate Comparison **Information available as of July 2014

  22. FY 2015 Rate & Per Capita Comparison *Per Capita – per unit of population; by or for each person **Information available as of July 2014

  23. Positive Outcomes from having a Strong Budget & Financial Plan Fiscal Year FY 2014/2015 Financial Trends

  24. Lessons Learned Managing a City Through a Financial Crisis Increasing property taxes • Reduced Taxes from 9.5 to 8.95 Reducing salaries and benefits • Restored salaries and benefits to pre-crisis levels Closing City Facilities • Re-opened facilities to limited programming Eliminating or Changing Services • Implemented the hybrid model for service delivery Selling Assets • Re-evaluated and no longer needed Reducing the Workforce • The City is maintaining current staffing level State Intervention – AVOIDED! • The City continues to provide monthly financial information but it is no longer required

  25. Closing Remarks Managing a City Through a Financial Crisis • The City will continue to monitor the Taxable Value Trends • Monitor and Manage Public Safety Costs • Participate in Financial/Budget Training Workshops • Active City Manager involvement in the Budget and Audit Process

  26. Questions

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