This Year's Budget Is Almost Complete: Is A Tax Increase For The Upcoming Fiscal Year Necessary?
By Hallandale Beach Mayor, Joy Cooper
August 19, 2021
In September 2019, the city received the SAFER grant award in the amount of $5.7 million. This grant funds the requested 14 Firefighter positions for a period of 3 years.
Over the past month, we have received calls from concerned residents, about the water leaking on Hallandale Beach Boulevard and Three Islands. The leak, is due to a small fracture, in a 14-inch pipe. The work to repair this, was scheduled and our Staff, was preparing and found, that this older sized pipe, was difficult to find, but it was finally found and work will now begin, for the repairs. There will obviously be a disruption in traffic, so please, pardon the dust.
Over the next years, we will be endeavoring to aggressively updating our infrastructure. We have secured a revenue bond, based on our current utility rates, but, we will also be looking to propose a Government Obligation Bond, to replace many pipes, that are well over, 50 years old.
The following is a continuation of our City Manager's Budget Message and The Strategic Financial Plan. This year's budget is almost complete. We held our final budget workshop and will be conducting our public hearings, to adopt the final determinations. The concepts laid out in this plan, have not all been adopted. We did adopt on first reading, for the On-Street Parking Plan with some amendments, that include a reduced rate for senior and codified, our policy, for free parking, for Handicapped Residents and Veterans.
For approximately the past four fiscal years, both Administration and the City Commission, have discussed, the creation of a Request For Proposal (RFP), for the outsourcing Of The City's Sanitation Services. It has been previously discussed, that by outsourcing those particular services, the City would realize, performance improvements, while generating, approximately $1.5 Million, in Franchise Fees, for The General Fund, at the same time.
The Current Administration, has considered the previous concerns, by members of the City Commission, as it pertains, to Sanitation Staffing and Layoffs. To that end, our proposal would be to proceed with the Outsourcing Of Services, as a part of our Financial Solvency Strategies, while keeping all of our current Sanitation Employees, which will allow them, to work in current vacancies, within the Department Of Public Works.
The Outsourcing Of Sanitation, is a vital part of our Financial Stabilization Strategy, because once implemented, in FY2023, there would be a one-time transfer, to The General Fund, of the Remaining Balances/Closeouts Of The Transportation Fund, in the amount of $4.5 Million. Additionally, in that same fiscal year, the city would generate revenues of approximately $1.5 Million, for a total of $6 Million, in FY2023. The City would receive, approximately $1.5 Million, in franchise fees, per year, after that.
Property Tax Increases:
Although A Tax Increase, is not proposed, for the upcoming fiscal year, increases may become necessary, to offset the projected, steep, budget shortfalls. An increase, is not proposed in FY2021/2022, as we recognize, that the Global Pandemic, is not over and that, the community, is still struggling, with the effects, of a slow recovery. However, A Proposed Tax Increase, of approximately .65 Mills, is proposed, starting in FY2022/2023 and in, FY2023/2024. The Proposed Increases, will generate approximately $2.9 Million, in FY2022/2023, approximately $6 Million, in FY2023/2024 and approximately, $6.1 Million, in FY2024/2025.
It should be noted that the ability to tax is capped at 10 mills, including that of independent districts such as Golden Isles and Three Islands. The current operating millage is 7.0000 with a maximum potential increase of 1.2466. This maximum is proposed to be spread over a period of two years beginning in FY2022/2023. Therefore, under our current structure, the total millage that can be assessed is approximately 8.12466 (excluding debt service millage).
Cost Allocation Study:
One of the tools which we can utilize is the update to our City’s Cost Allocation Plan. The full Cost Allocation Plan (CAP) can be used as supporting documentation for inter-fund transfers between Enterprise and Special Revenue Funds and the General Fund. In essence the CAP clearly documents the administrative and support costs (e.g., HR, Procurement, Finance, IT etc.) incurred by the General Fund in support of operating departments such as Public Works. The last CAP was done in 2019. It reduced the transfers to the General Fund by approximately $1 million, even though expenses have increased. A revised CAP will consider these expense increases. As a management tool the CAP provides City Administration with relevant cost data as to how much it actually costs to provide specific services.
Cost Savings - Elimination Of SAFER Grant Firefighter Positions:
In March 2019, the City Commission, approved a SAFER Grant Application, in the amount of $3.5 Million, to fund 14 Firefighter Positions, that were needed to place, a third of the Firefighters, on The Fire Trucks. Due to the City’s financial constraints, an Economic Hardship Waiver Request, was also submitted, for the funder, to consider granting 100%, of the costs. In September 2019, the City received, The SAFER Grant Award, in the amount of $5.7 Million. This Grant, funds the requested 14 Positions, for a period of 3 years, (from March 2020, through the end of, March, 2023). Per The Grant Guidelines, The City, is not obligated, to keep the positions, at the end, of the Grant Period.
Should the City decide to keep the positions, the financial obligations would begin, in FY2022/2023 with a cost to the General Fund of $890,679. For FY2023/2024 and FY2024/2025, the cost would increase, to approximately $1.9 Million and $2.1 Million, respectively. The cost of keeping these positions after the grant ends, through FY2024/2025, is approximately $4.9 Million. This will be a direct impact, to reserves given, for the expected, budget shortfalls, in the next, four years.
In order to preserve reserves and better prepare for the end of ARPA, the elimination of, the 14 Firefighter Positions, is recommended.
Hiring Freeze Of Select Positions:
Over the next year, The Administration, will review possibilities, for the freezing of select positions, as long as, those positions do not interfere, with the level of services, that we are now experiencing, as a result of, The Policy Of Minimum Staffing Levels, which, we have adopted.
As previously discussed, for many years, the City was understaffed, due to previous, budget cuts. This led to existing staff working overtime and directly contributed, to the fact that over the past six (6) years, the City lost hundreds of employees, across the board. The loss of hundreds of staff, are creating numerous challenges for the organization, including both brain, and experience drain and the higher costs, are associated with hiring and training, of new employees.
Based on our policy of maintaining, minimum staffing levels, in order to ensure our current levels of service, there are no major, across the board Staff Reductions, which are a part, of our Financial Stabilization Strategies.
The final portion, PART IV of this message, will be next week. 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: firstname.lastname@example.org . Please visit my Facebook Page: MayorJoyCooper. Like It! Friend It! Share It!