Miami Beach

Miami Beach commission approves flat property tax rate, but some fees will go up

As Miami Beach looks for ways to save money, some city commissioners are questioning the number of staff at City Hall.
As Miami Beach looks for ways to save money, some city commissioners are questioning the number of staff at City Hall.

Miami Beach commissioners approved a new budget on Wednesday that includes funding for new initiatives like placing police at schools and creating a city hall watchdog, but did not raise the property tax rate.

The new programs were funded in part by increasing fees for some city services, including sidewalk café permits, elevator inspections, and parking in certain areas. The rate hikes mainly impact businesses and visitors, largely sparing residents, but some commissioners questioned whether the city should have made more personnel cuts before boosting fees.

“I had raised concerns about salaries, pensions, efficiencies and I don’t really see that any of those items were addressed,” said Commissioner Michael Góngora, the lone No vote. “I think our budget is just too high and out of control.”

At a budget hearing earlier this month, Góngora and Commissioner Ricky Arriola urged city administrators to cut the number of City Hall employees before asking commissioners to raise fees.

“Nobody likes to make hard decisions. Everyone wants to be popular,” Arriola said. “But in an organization this big, even a small organization, there are people that don’t belong, positions that don’t belong and we need to take a hard look at those.”

Góngora also wanted the city to consider capping salaries for certain positions as well as offering performance bonuses that don’t impact the city’s pension obligations instead of offering raises. The increased costs in the city’s budget for the next fiscal year largely come from personnel costs, which account for 73 percent of the new $345 million operating budget.

Miami Beach currently employs 2,156 full-time employees, of which roughly 15 percent earn at least $100,000 a year. Annual pay for the top earners costs the city approximately $39 million.

On Wednesday, City Manager Jimmy Morales said that administrators are looking at department head counts and other ways to make City Hall more efficient.

“We’re looking at individual departments that are seeing, because of just the way the world is changing, revenues going down,” he said, citing the parking department as one example. The popularity of ride-sharing services like Uber and Lyft has contributed to a decline in parking revenue, according to a recent memo.

But city administrators have also noted that the number of employees has risen only slightly over the past ten years, even as the city’s daily population — which includes an increasing number of tourists — has grown. Miami Beach has roughly 30 more full-time positions now than it had in 2007. The number of employees decreased significantly during the recession, but has since returned to previous levels.

“If I’m running a company ... basically 12, 13 years later I’m running this operation, doing even more services than we were doing back then, with basically the same head count, I think that’s probably a pretty good story,” John Woodruff, the city’s chief finance officer, said at an earlier budget hearing.

Morales also noted that city administrators had suggested cutting cost of living salary increases, which would have saved more than $600,000, but commissioners rejected the idea.

The city’s budget for the next fiscal year, which begins in October, eliminates 18 full-time positions, the majority of which are currently vacant, and adds 16 new ones. Although an inspector general’s office is included in the budget, voters still have to approve the creation of this position on the Nov. 6 ballot.

Miami Beach’s property tax rate will stay flat at $5.88 per thousand dollars of taxable property value, the lowest rate in at least 50 years. Since property values have increased over the past year, however, homeowners will see their bill go up. An average homeowner with a property valued at $473,000 who takes the standard homestead exemption can expect to pay an extra $58, according to city estimates.

The discussion about personnel costs comes after a year of lackluster growth in property tax revenue. The overall taxable value of the island’s property increased by double digits in 2015 and 2016, but this year the growth slowed to 4 percent, according to figures from the county property appraiser. If the trend continues, city officials will likely need to look for new ways to cut costs. Property taxes contribute more than half of the money Miami Beach uses to pay for services like the police and fire departments, emergency management and park maintenance.

This year, city commissioners approved rate increases that mainly impact businesses and visitors. These include increases in parks and recreation fees for non-residents and an increase in the annual permit fee for sidewalk cafés from $20 to $25 per square foot. Although permit fees are due in October, businesses won’t get a bill for the $5 increase for another six months.

The parking increases include a hike in parking fees for construction projects and new daily rates for hostel and bed and breakfast guests in certain residential areas. Drivers will also have to start paying for metered parking in the South Beach entertainment district between 3 a.m. and 9 a.m., which is currently free.