Hallandale Beach Budget Projections For Fiscal Years 2021-2025

On Monday, our City Commission set the Millage Rates, Golden Isles and Three Isles Safe Neighborhood District's Millage Rates, The Fire Fees and The Debt Service Rates. The Millage Rates and The Fire Fees will all remain the same, however, The Debt Service, will be slightly lower. Dr. Earle and our Staff, have been working diligently to provide a balanced budget, while creating a five-year fiscal plan to address long term financial stability. Your Commission is now, also working hard to address very difficult decisions that will not be popular, but, necessary.

Cities are required by law to provide services and a balanced budget. Just like a household, a condo or a business, the costs to provide these services, costs money. We can no longer utilize our reserves, so, we have been keenly focused, on how we can generate revenues.

I wanted our residents to understand the planning and decision process, so, in the next few articles, I will be sharing the City Manager's Budget message. This is a 5-year plan, the components will need to be voted on and passed, as policies of the Commission.

The City Manager’s Message:
Bottom-Line Up-Front Summary:
Conservative budget projections for FY’s 2021-2025 to reveal that there will be a cumulative budget, shortfalls/deficits of approximately $60 million, in the General Fund, if the City took no further steps to maintain financial solvency.

Additionally, should the City not receive funds from the American Rescue Plan Act of 2021 (ARPA), over the next three (3) years, take no further actions to stabilize its finances and the General Fund, would be functionally bankrupt, by the end of FY2022. This does not consider any emergencies, such as a major hurricane, for which, the City had used, millions of dollars to mitigate these damages, in the past.

However, due to not only, the funding provided by ARPA, in the amount of approximately $16 Million (The final numbers to be confirmed by the State of Florida), but, also the financial stabilization strategies, that are proposed in this memorandum and then, the City can preserve a positive reserve through FY2025.

If the City Commission approves the full suite of financial stabilization solutions, based on the projected budget shortfalls, the reserves will drop from approximately $13.2 Million, at the beginning of FY2022, to approximately $6.3 Million, in FY2025. This means, that over the next two years, additional financial strategies, need to be undertaken, to ensure that the City does not completely run out of reserves, in FY2026.

It is important to note, that the reduced impacts to our reserves and our ability, to remain financially solvent, in the General Fund, through FY2025, that will be a direct reflection of the City’s ability to implement, all of the proposed financial stabilization strategies. Any elimination of even one of the strategies, would have a detrimental effect, on the City’s long-term solvency.

The impact of our stabilization strategies over a period of 5 years, results in the following amounts:
American Rescue Plan Act Assistance - $16 Million, Parking Program - $5.6 Million, Certificate Of Use Program - $2.1 Million, Sanitation Fund Closeout - $4.5 Million, New Solid Waste Franchise Fees - $4.6 Million, Property Tax Increases in FY23 and FY24 (increase of 1.2 Mill to a total of 8.2 Mills) - $15 Million and Elimination of 14 firefighters, the Grant Funded Positions (SAFER Grant) - $4.9 Million.
The total amount of newly proposed revenues, between FY’s 2022-2025, are therefore, approximately $52.7 Million.

History
This budget message, outlines a recommended budget that addresses the community’s immediate service needs, while focusing on short-term and long-term strategies to position the City on a path to recovery.

As you are aware, by way of numerous budget discussions over the past fiscal year, the City of Hallandale Beach is, without exaggeration, in the middle of perhaps one of the most significant budget cycles in the City’s history. We are quite simply, in a financial crisis that has taken at the very least, the past seven (7) to ten (10) fiscal years, to unfold.

As you have all been advised, the FY2021/2022 and future year budgets, will present challenges of great magnitude. This will require, that the City Commission will go through, an extremely difficult decision-making process, to move the City forward, in a fiscally, responsible manner, during the recovery phase of the COVID-19 Pandemic and its long-lasting effects on revenues losses, as well as the recovery, from years of deficit spending and corresponding depletion of reserves.

Historical factors which have directly contributed to the financial crisis, in which we find ourselves today, include, but are not limited to, the past practice of developing budgets with deficit spending, supported by the depletion of reserves, rather than a corresponding creation of new revenue, generating programs and/or possible Ad-Valorem Tax Increases.

Normally, reserves would provide a safety net for emergencies, crisis and budget shortfalls. However, the depletion of reserves in past years, continue to affect the financial health of the City today. Deficit spending has depleted reserves by $14.5 Million, in the General Fund, in the last eight years. It is imperative, that we set strategies in motion, that support a steady revenue stream, for the General Fund, rather than finding annual fixes, year after year.

To be continued in next week's article!

As always, I am available anytime for your questions, concerns and ideas to make our City, a better place, on my phone/text at: (954) 632-5700. Or you can e-mail me at: jcooper@cohb.org. Please visit my Facebook Page: MayorJoyCooper. Like It! Friend It! Share It!