The Budget Process Continues: It Is of Critical Importance to Make Difficult Decisions Now

The following is a continuation on the 2021-2022 budget message and five-year fiscal plan that was presented by our city manager. This budget is extremely important to create fiscal stability.

As part of the budget development process, preliminary budget projections for the next four fiscal years have been prepared. It was important to include projections through FY2024/2025 (the year after the ARPA subsidy ends), to provide a better picture as to why it is of critical importance to make difficult decisions now, that will affect the next four fiscal years and beyond.

Recommended FY2021/2022 Budget
The FY2021/2022 Budget reflects an operating budget of $140,467,045. This amount represents an 11.7% increase over the prior year’s budget. When adding the capital projects and adjusting internal service fund transfers; the total FY 21/22 Budget is $147,133,289, which represents a 4.14% increase over the prior year’s budget. The increase in the total budget is primarily attributable to the General Fund. The largest increases in the General Fund include the contract with the Broward Sheriff’s Office, Police/Fire pension costs, Tax Increment Financing payment to the CRA, and capital purchases. Continuous updates will be prepared over the next months and will be discussed with the City Commission at proposed future Budget workshops.

Currently, the recommended General Fund budget is out of balance by approximately $3.6 million. This results after a $5.5 million ARPA subsidy, and a $1.7 million in new revenues from proposed programs (i.e. Parking Program, Certificate of Use) are accounted for. Without federal subsidies and new revenue generating programs, the budget shortfall amounts to $10.8 million.

FY 2021/2022 Fund Overview
The recommended budget shows the following funds using fund balance for recurring expenses: Cemetery and General Fund. Also, the General Fund continues to subsidize the Transportation Fund, with a transfer not to exceed $958,125. Additionally, in the upcoming fiscal year, the Police Training Fund will be subsidized by the General Fund with a transfer not to exceed $40,000. Below is a summary of operating funds impacted with a deficit.

City Taxable Value
Based on the June 1, 2021 certified value received from the Broward County Property Appraiser’s Office, the City’s growth in taxable value shows a 1.89% increase from July 1, 2020. The increase in property values will only provide an additional $760,620 in new Property Tax Revenues. The City’s portion of the increase is $230,950 and the Hallandale Beach Community Redevelopment Agency’s portion is $529,670.

The recommended budget is predicated on the General Fund’s current operating millage and no increase in the fire assessment fee (remaining at 7.0000 mills). The General Obligation (GO) Bond millage will decrease by 0.0149 mills, from 0.5522 to 0.5376 mills in the upcoming fiscal year. This decrease in millage is due to the slight increase in property values and a slight decrease in debt service budget.

The American Recovery Plan signed into law in March provides over $350 billion of relief funds to state and local governments. This amount represents approximately one-fifth (1/5) of the bill's total allocation and will be deployed to state and local government agencies in two distributions. Use of these funds is broadly defined in the bill.

As of the printing of this document, specific guidance for the State and Local Fiscal Recovery Fund component of ARPA, including metrics, requirements, and restrictions, has been issued by the U.S. Department of the Treasury. However, because the City is a non-entitlement unit of government, the City must also abide by any provisions by the State to request and receive funding. The City expects to receive approximately $16 million over two years. Of the first allocation of approximately $8 million, this Recommended Budget proposes the use of $5.5 million to balance the FY2021/2022 budget, which has allowed the City to abate greater budget shortfalls.

The remaining second year ARPA allocation will assist in further mitigating shortfalls that the City’s reserves cannot sustain in FY2022/2023 and FY2023/2024 as the economy recovers. It is expected that a great portion of these funds will be necessary to maintain service levels as we manage through the recovery.

As the City charts course for a financially responsible future, new options must be explored to find new revenue to pay for the increasing cost of public services. For years, the City has been missing out on significant revenues by not charging fair market rate for in-demand parking spaces.

Based on conservative estimates, the expansion of the parking program would result in approximately $1.4 million in new revenue. This revenue can be used to replace our aging fleet of police vehicles, allow the City to keep parks open longer, expedite permitting processes, and increase code compliance efforts. Further, parking enforcement has a public safety component as it provides an authoritative presence, a marked vehicle with lights and uniformed parking specialist, discouraging criminal activity, and removes dumped and illegally parked vehicles from our neighborhoods.

New Certificate of Use and Enhanced Local Business Tax Receipts Program
This program was approved by the City Commission in the current fiscal year; however, due to various factors including staffing levels and turnover, the full potential of the combined programs has not been reached. While enhancements to the Local Business Tax Receipts Program are underway, the new Certificate of Use Program has not taken off.

It is estimated that in FY2021/2022 the program will be staffed and revenues in the amount of $300,000 will be realized. The programs’ full potential revenue is approximately $590,000 per year and is projected to be realized starting in FY2022/2023. Next week the message will be continued.

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!