As a new fiscal year looms, the South Miami city staff and commissioners attempt to cut costs while maintaining city services.
At its Sept. 10 budget hearing, the city commission voted on first-reading ordinances to approve and maintain a tentative tax rate of $4.36 per $1,000 of taxable property value. Commissioner Josh Liebman made a motion to reduce the rate to $4.30 per $1,000 of taxable property, earning support from other commissioners.
“It was one of the lowest-key budget hearings I have ever attended,” Mayor Philip Stoddard said. “We had three citizens show up.”
The commission also voted to approve a proposed budget through Sept. 30, 2016. The budget of $23,673,053 had several cuts into its general-fund expenses.
“The variances from the proposed budget were very minimal,” City Manager Steven Alexander said. “(Lowering [the tax] rate was) the major thing that the commission is interested in. ... Liebman asked the commission if they would support a motion to reduce the [tax] rate to $4.30.”
Vice Mayor Walter Harris had to leave the budget hearing early, but the vote to lower the tax rate will be up again at the second budget hearing Sept. 24.
“It seemed that the four members that were there were in favor of doing that cut,” Alexander said. “The reduction of the rate. We will have to go find a way to … figure out where we are going to take that from.”
The employee benefits package originally budgeted for a 15 percent increase in premiums from its current policy amount. After negotiations, the city obtained a benefits package for a 12.2 percent increase. As a result, city workers compensation was reduced for a savings of about $29,961. The 2015-16 general fund amount of $18,246,767, recommended by the city manager, is $586,965 more than last year’s budgeted general fund.
“We did ask the manager if we could lower the [tax rate] a tiny bit,” Stoddard said. “He said he thought that was possible. There are several outstanding issues that haven’t been resolved yet, such as the exact figures on insurance and things like that. They said if they get a surprise with a bigger number than expected, they wouldn’t be able to drop the [tax rate]. If there are no surprises, they think they can bring it down a little bit. We are going to see if we can get it to $4.30. That’s the goal. It really depends on things like the cost of health insurance, and similar big ticket items.”
Some potential financial issues for the city include: union negotiations, litigation expenses and exposures, and fuel expenses.
“I feel really good about the budget,” Alexander said. “We were able to move some things around. We are continually working on the budget, trying to get more clarity to it so people know, for instance where maintenance goes.”
“What we are trying to do now is add categories to the budget, not just have the additional money but better apportioning of the money that we do have so that there is more clarity and better understanding of the public, what we are planning on doing with money.”
Current negotiations between the American Federation of State, County and Municipal Employees and PBA unions could place additional finance demands on the city’s limited budget and require additional funds that are not budgeted. The city is also involved in multiple litigation, which could result in financial liabilities. Also, the fuel prices for the city fleet vary throughout a typical year. Although the city estimates fuel costs to prepare for this, it requires usage of city vehicles to be limited to essential activities.
“Where we get the feedback is people wanting services,” Stoddard said. “They want better markings in the crosswalks, want the parks to be better maintained, good police and solid waste services, and they are willing to pay for it. They want the downtown to be kept well. I have gotten, across the years, no complaints about the tax rate. When it comes time to set the [tax rate], there is always someone that says you should lower it just because, but really we’ve had no complaints about the tax rate.”
The budget fiscal year begins Oct. 1.