The South Miami commissioners voted unanimously to approve a tentative property-tax rate of $4.36 per $1,000 in taxable property value after the city’s first budget hearing Tuesday night.
One major change in this year’s budget is the allocation of 25 percent of the operating budget into an emergency reserve fund. This comes after a recommendation from the Government Finance Officer Association (GFOA).
“South Miami, for years and years, has not had the right amount of savings,” city manager Steven Alexander said. “The GFOA highly recommend that if you don’t have any other fund, have an emergency fund and fund it at 25 percent of your budget. It’s absolutely critical that we have that reserve to go to for whatever comes up.
“The emergency of a real estate bubble and financial collapse that we just had a couple years ago. Whether it’s a storm or an explosion, any number of cases could require the use of that money.”
The $2.7 million allocation is up from the 10 percent of funds allocated last year.
“Before Alfredo Riverol was the Chief Financial Officer, the city had serious budget problems,” Mayor Philip Stoddard said. Riverol “has been sticking to the best practices. He pays very close attention to ... recommendations and adheres to them to the best of his ability. That’s why our budget has gotten awards.”
A large detour in the budget preparation came after the commission unanimously opposed Alexander’s proposal to privatize the city’s waste-collection department. Alexander estimated that the move would have meant more than $900,000 in annual savings for the city.
The city also is involved in ongoing negotiations with Florida Power & Light to determine the length of a new franchise agreement. An ordinance relating to the electric franchise negotiations will go up for second reading Sept. 16.
“There may or may not be more discussions,” Alexander said. “Certainly I’ve been in contact with them. I don’t know if certain commissioners have been in contact with them in the interim or not but we will see where that ends up.”
The commission previously voted to extend the city’s agreement with FPL for one month, after the city’s current term expired Aug. 16.
The budget includes several cost cutting measures, adding up to about $744,943. Two vacant full time positions and six vacant part-time positions would be cut while health insurance for the City Commission and liability insurance and unemployment compensation would be reduced in human resources.
“The budget hearing went very smoothly,” Stoddard said. “I think the commission, for the most part, had an input on the budget process, so it was really just a matter of going through and adding a couple of items that the commission considered and looking for possible savings, but there was not serious addendums or challenges to the budget.”
The second budget hearing will be at 7 p.m. Sept. 23 in the commission chambers at City Hall, 6130 Sunset Dr.
The new budget year begins Oct. 1.
“In terms of the overall budget, we are looking pretty good in terms of what we know we are going to be spending money on,” Alexander said. “I think it’s a responsible budget and I am pleased with what we have right now.”