A $350,000 decrease in Florida Power & Light franchise-fee revenue and an increased police budget of $499,000 are the big-ticket items in Cutler Bay’s proposed 2014-2015 budget, according to Town Manager Ralph Casals.
Casals said that no jobs would be cut in the proposed $36.6 million spending plan, up from $35 million this year. The budget includes a property-tax rate of $2.5702 per $1,000 in taxable home value, the same as this year.
“I don’t think we are in a position where we have to make any cuts,” Mayor Ed MacDougall said. “We are financially sound. For a city our size, we haven’t been able to find anyone in the state of Florida that has the percentage of reserves to operational budget that we have. There is nothing really looming that is going to hurt us.”
To make up for the lost revenues and higher costs, the budget projects a drop in the town’s fund balance, or savings account, of about $600,000. The town would still end the year with almost $15.5 million socked away.
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The town’s contract for police services from Miami-Dade County increased about $533,000. The increase is largely because of an increase of $223,000 in officer insurance premiums and a combination of overhead and overtime charges, totaling about $238,000. The increases will be partially offset by reduced costs elsewhere in the police budget.
“The biggest thing obviously is we know we are taking a hit with the franchise fees,” Casals said. “We have an increase in the police department due to some benefits that are being restored” to county police officers after a deal suspending those benefits expired.
Another major expense: $595,000 for principal payments on loans for a land purchase and improvements to schools in the city.
Casals said that newly incorporated municipalities, such as Sunny Isles, Aventura, Pinecrest, Miami Lakes, Cutler Bay, Miami Gardens and Palmetto Bay are under a “master agreement” between the county and FPL.
“In that agreement, in plain language, it states that as FPL brings properties online, meaning properties that are on the tax roll, they have the right under the agreement with Miami-Dade County, to reduce their franchise fees in those new municipalities based on their increase of tax that they pay at their Turkey Point facility.”
Last month, Casals received council approval to advertise a tax rate of $2.72 per $1,000 in taxable property value for the 2014-15 fiscal year, but the town plans to adopt its $2.57 for the fifth consecutive year.
“We are holding the existing millage rate at 2.57,” Casals said. “There has been some discussion with the council to further reduce that and that’s something we have to deal with collectively.”
“The biggest thing is that I’m excited by is the fact that we started our budget process early,” Casals said. “This is the first time we’ve ever had a council budget workshop. The hearings are the ones by law you have to have. I’m happy to tell the community and council members that at least we were able to engage the council early on in July to talk about the priorities for next year’s budget.”
Mayor MacDougall said the own had no control over the reduced payments from FPL.
“The franchise fee for FPL has been slashed by 25 percent, about $300,000, which is not a small amount of money,” MacDougall said. “The county did this and never told the municipalities. They said we are going to take away 25 percent of your revenue. All of the sudden they are springing it on us when they had this information. That’s not the right thing to do to municipalities. ...
“We’ll have to deal with that. It’s not something we can’t overcome, but it’s still $300,000 no matter how you cut it.”
The first budget hearing is at 7 p.m. Sept. 9 and the second budget hearing is at 7 p.m. Sept. 23 at Cutler Bay Town Hall, 10720 Caribbean Blvd.
“I’m leaving as mayor in November, and I’m leaving with a great understanding or feeling of accomplishment of giving us a good solid financial footing,” MacDougall said. “I would be hopeful and I take it we will cut the taxes.”