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

The Budget Process

Date Activity

4/26/07 Mayor issued State of the City Address

5/1/07 - 5/18/07

Met with Mayor, City Manager, and CFO to discuss financial outlook for fiscal year 2008.

5/30/07 Departmental budget packages distributed for fiscal year 2008.

6/29/07 Budget submission deadline.

7/2/07 – 7/24/07

Department met with Director, Management and Budget to discuss budget request.

7/27/07 Office of Strategic Planning, Budgeting and Performance generated 1st draft of budget.

8/20/07 Commissioners’ Budget Workshop.

9/11/07 First Public Budget Hearing.

2

Budget Issues

• House Bill 1B

• Other Post Employment Benefits

• Fire Assessment

3

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

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

Operating Debt Service Combined

FY'04 8.76250 1.08000 9.84250

FY'05 8.71625 0.95000 9.66625

FY'06 8.49950 0.76500 9.26450

FY'07 8.37450 0.62100 8.99550

FY'08 7.29990 0.57760 7.87750

Millage Rates for the City of Miami

0.00000

2.00000

4.00000

6.00000

8.00000

10.00000

12.00000

FY'04 FY'05 FY'06 FY'07 FY'08

Operating Debt Service Combined

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

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

General Fund

9

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

Other$13,323,555

3%Charges for Services

$82,850,712 15%

Other Revenues (I nflows)$19,205,100

4%

Property Taxes$261,026,148

49%

Franchise Fees and Other Taxes$37,005,000

7%

(Transfers-I N)$39,492,737

8%

I ntergovernmental Revenues$41,151,996

8%

Licenses and Permits$29,658,555

6%

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

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

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

Risk Management$52,420,609

10%Public Safety$207,445,872

39%

Pension$65,945,032

12%

(Transfers-OUT)$29,861,407

6%

Other$65,649,919

13%

General Government$45,570,476

9%

Public Works$56,820,488

11%

Other

Planning & Development $11,771,871

Public Facilities $7,478,665

Parks & Recreation

$21,732,908

Non-Departmental $24,666,475

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

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

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

Gusman Olympia$381,000

12%

Civilian I nvestigative Panel

$996,156 31%

Liberty City Trust $550,000

17%

*Virginia Key Beach Trust

$1,316,15640%

General Fund –Outside Agencies $3,243,312

FY’07 = $336,454 9%

FY’07 = $579,865 15%

FY’07 = $1,680,955 44%

FY’07 = $1,206,238 32%

17

*Does not include $800k in prior year rollovers.

Questions

18