South Miami looking for budget cuts

08/22/2014 5:56 PM

08/22/2014 5:57 PM

South Miami administrators are looking for hundreds of thousands of dollars in budget cuts after city commissioners rejected a proposal to save money by replacing city trash collectors with a private company.

Another budgetary wild card: The city is still trying to negotiate a new franchise agreement with Florida Power & Light, which pays fees to the city for the right to use its streets.

City Manager Steven Alexander said his proposed budget is a modest one.

“There are really no programs that we have that are non-essential,” City Manager Steven Alexander said. “We are down to the bones.”

The $17.7 million budget is up from an estimated budget of $16.5 million for the 2014 fiscal year.

One new feature: The budget includes two additional police officers.

On Aug. 5, the commission unanimously opposed a resolution to privatize the city’s waste collection department. The move would have meant more than $650,000 in annual savings for the city, but would have affected at least 11 jobs in the public works department.

“There is not going to be any area that has the ability to have anywhere near the impact of what solid waste did because that is so big,” said Alexander, who now estimates the savings as closer to $900,000 annually.

At $6.9 million, the police department has the largest budget of all city departments for the 2015 fiscal year. The department cost just over $6 million this year.

Cost-cutting measures could include eliminating health insurance for the City Commission, eliminating two vacant full-time positions and six vacant part-time positions in various departments, and reducing liability insurance and unemployment compensation in human resources, for a total reduction of $744,943.

The city is currently negotiating with FPL to determine the length of a new franchise agreement. Alexander said the negotiations with FPL could lead to a related item on the Sept. 9 agenda.

The outcome of those negotiations could affect the budget, too. Electric companies normally pay franchise fees to cities, which the companies recoup from customers on their monthly bills.

Alexander said the city and FPL have yet to come to agreement on the length of the term. According to Alexander, FPL wants to hold South Miami to a 30-year term, while the city has “previously taken a position” in the range of a five-year term.

“The rationale for that is the technology of energy and energy supply is rapidly changing so the mechanism for producing energy over 30 years is going to change,” Alexander said. “It doesn’t make sense to be tied to a 30-year agreement based on energy coming from the nuclear power plant down at Turkey Point.”

The commission voted, at its Aug. 19 meeting, to extend the city’s agreement with FPL for one month, after the city’s current term expired Aug. 16 and staff continues negotiations.

“We got an opinion from the county attorney who said as long as we are in negotiations with FPL, that there is a Supreme Court precedent that says the existing franchise agreement payments will remain in effect,” Mayor Philip Stoddard said. “We extended the franchise agreement by another month, but it turns out we didn’t have to do that, at least according to the county attorney’s reading of the case law.”

The city is expected to have $8.2 million in tax revenue and $17.3 million in total revenue in its general fund for the fiscal year. The mayor said the city plans to keep the property-tax rate at $4.3649 per $1,000 in taxable home value for the third straight fiscal year.

Alexander said one of the new police officers would be assigned to the Police Athletic League while the other will be used for community policing in the downtown shopping area.

The City Commission will hold two public hearings on the budget. The first hearing will be at 7 p.m. Sept. 9, while the second meeting will be at 7 p.m. Sept. 23. Both meetings will be in the commission chambers at City Hall, 6130 Sunset Dr.

The fiscal budget year begins Oct. 1.

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