Budget Message for the 2024-2025 Fiscal Year

Published on September 12, 2024

By Stan Morris, City Manager

In accordance with article IV Section 4.5 of the charter of the City of Sunny Isles Beach, I am pleased to present to you the proposed comprehensive budget and the 5-year Capital Improvement Program for FY 2024-2025.

The budget is the culmination of many months of collaboration between the City Commission, Administration, and the residents of the City of Sunny Isles Beach.  Working with our Commission to establish the vision for the upcoming year, then with departments to plan the needs to accomplish that vision, and finally, refining that vision to meet the financial limitations that were the overarching goal of the elected body and the residents.

Our tax base saw an increase in value of approximately $1.8 billion from last year, prompting the Commission’s decision to reduce the millage rate from 1.9 to 1.8 mils per $1,000 of assessed value.  This resulted in an unprecedented twelfth year that our City has lowered the tax rate. With many necessary operating expenses continuing to rise, such as insurance costs, supplies, and contracted services, as well as aging infrastructure and unfunded legislative mandates, this reduction requires us to prioritize expenditures.

As established by the Commission, Public Safety remains an area of utmost importance. The budget continues to provide for a professional police department that will continue to meet the standards of accreditation that were achieved last year.

Safety continues to be a focus in other areas of the budget. For example, funds are allocated to improve the safety of school children while at Pelican Community Park by creating limited access to the site, study roadway improvements in the central island area for safer scooter and bicycle use, and building a larger lifeguard stand south of the pier for better visibility.

With the unfunded mandates imposed upon all municipalities this past legislative session, the Building Department is another area in which we must invest to meet these new requirements. This budget provides for a total of eight new positions which will establish an inspector training program.

This program will provide a succession plan for when we are presented with challenges in hiring qualified employees as we most recently experienced. This level of staffing, along with the expanded use of technology, will ensure we are ready to meet this influx of new permits and legislative requirements.

Other priorities include our commitment to provide quality programming for our seniors and teens and streamlining special events. We have identified the most critical space and program needs through community and commission meetings and are focused on enhancing and transforming our spaces to meet the growing demand.

The Comprehensive Plan and Zoning Code will be updated. An in-depth review was completed this year, and necessary amendments have been identified. Next steps will be to finalize the long-term vision for the west side of Collins Avenue and submit the correlating comprehensive plan amendments to the State for approval.

With the future in mind, we are carrying forward the balance approved last year in our Capital Improvement Program (CIP) Fund of $4,265,756 to allocate for potential land purchases. Several parcels have been identified for possible future growth for the city.  We are also carrying over the funds for the high priority projects to resolve flooding throughout the city including the Central Island Drainage Project at $25M and the Golden Shores Pump Station Project at $7.9M.

We are still faced with significant economic issues beyond our control such as rising costs of ongoing construction and fuel costs, challenges in hiring contractors for repairs and projects, and impacts to staffing due to the increased cost of living. Our Commission has expressed lofty goals to achieve in the next few years, coupled with a millage rate reduction, requiring us to identify cost savings in other areas in this budget.

General Fund

As stated, the Budget provides for a reduction in the property tax rate, reflecting a millage rate of 1.8 mils per $1,000 of assessed value. This is achievable due to a 13.13% increase in the taxable value of all property within the City.

This includes $205 million of property value decrease after value adjustment board changes through appeal, $1.5 billion increase of property values due to reassessments and over $612 million of new construction added to the tax rolls in our city this year.

The revenue for the fiscal year 2024-2025 in the General Fund is $55,050,116, which represents an increase of $6,525,347, or 13.5%, from the fiscal year 2023-2024 adopted budget.

The changes in various revenue categories are outlined below:

Property tax revenues reflect an increase of $1,669,774 due to the increase in property values. The City’s assessed value as reported by the Property Appraiser is $17,832,017,201, which is a $1,863,609,600 increase over 2023-2024. The recent history of the City’s taxable values is provided below:

Franchise fees are estimated to increase by $408,000. Utility tax revenues are also estimated to increase by $406,000.  These higher proposed revenues are due to new construction being added to the tax roll.

Communications Services Tax revenues are expected to increase slightly by $21,592. Revenues from licenses/permits are expected to increase by $132,680 primarily related to higher revenues for short-term rental registrations and local business licenses. Intergovernmental revenues are expected to increase over the prior year by $112,060 due to the state revenue sharing, alcoholic beverage license fees, and local government half-cent sales taxes. Charges for services are expected to increase by $1,048,126 over the prior year. This is primarily due to increases in administrative charges of $83,684, parking fees of $714,699, recreational programs of $231,000, and public safety overtime reimbursements of $18,743.

Fines and forfeitures are estimated to increase by $342,000 primarily due to the implementation of the red-light camera program of $267,000. Other increases include parking, school crossing fines and court fines of $75,000. Miscellaneous revenues are expected to increase by $2,385,115 primarily due to investment interest earnings and the change in accounting treatment of leases and subscription-based IT arrangements. There are no transfers in estimated for the fiscal year.

The proposed General Fund budget expenditures (not including transfers out to other funds) increased to $55,823,812, which represents an increase of $6,275,234, or 12.7%, from fiscal year 2023-2024.

Expenditures have increased primarily due to: (1) additional positions ($775,399), compensation adjustments for Police raises, cost of living and merit increases ($613,640), overtime ($59,750), FICA ($87,429), retirement system contributions ($317,679), and health and other insurances ($506,249), (2) additional departmental needs for Public Safety, Facility repairs & maintenance and Cultural & Community Services ($3,158,721), (3) an increase in capital outlay needs ($158,619), (4) an increase in debt service due to the change in accounting treatment of leases and subscription based IT arrangements ($567,748), and (5) an increase in other disbursements for donations and election expenses ($30,000).

Street Maintenance & Construction Fund

Major revenue sources in the Street Maintenance and Construction Fund include intergovernmental revenues such as State Revenue Sharing, Transportation Surtax, and Local Option Fuel Tax. The fund accounts for the costs related to transportation, street construction and maintenance programs including improvements to pedestrian safety. The total budget is $5,074,071.   

Building Fund

Major revenue sources in the Building Fund include fees generated from building permits and inspections. This fund accounts for the costs related to the administration and enforcement of the Building Code. Revenues, not including appropriated fund balance, are $7,961,500, an increase of $4,530,000 from the prior year due to two large development projects. Expenditures are $9,146,864, an increase of $1,632,554 from the prior year which includes 8 newly added positions and an increase in capital outlay needs. These expenditures are necessary in meeting the increased demands on this department by the two new major developments starting this year as well as the new legislative performance requirements. The excess expenditures over revenues this fiscal year are funded by the carryover (fund balance) of the previous year’s revenues.

Public Art Trust Fund

This fund was created in 2014-2015 for the benefit of segregating the use of Public Art Trust Fund revenues to purchase and maintain art within the City. The total budget is $1,679,605, an increase of $286,665 from the prior year. The increase was due to the final resolution of a development project. There are no anticipated revenues this coming year.

Sunny Spaces was developed in celebration of the City’s 25th Anniversary and under the initiative of the Public Art Program. Sunny Spaces aims to bring the community together through the visual arts by co-creating artistic spaces curated by our residents.

The goal is to shed light on our talented artists while increasing accessibility to the arts in our community. This program will continue on an annual basis while we continue to seek other opportunities to heighten our public art presence in South Florida.

American Rescue Plan Act of 2021 Fund

This fund was created to segregate fiscal recovery funds as a result of the United States Congress passing the American Rescue Plan Act (“ARPA”). ARPA allocated over $7 billion for making payments to metropolitan cities.

The City entered into an agreement in September 2021 with the State of Florida, Division of Emergency Management as a non-entitlement unit to receive its allocation of $10,920,613 from the state. The first half of the allocation was received in October 2021 and the second half was received in August 2022. Allocated funds up to $10,599,613 have already been utilized as of 2023-2024 for the provision of government services, COVID-19 personal protective equipment (PPE) and supplies, and the Central Island Drainage Project. This Fund remains active with $334,414 dedicated to other necessary investments in water and sewer infrastructure.

Enterprise Funds

The City has a Stormwater Operating Fund and a Stormwater Capital Projects Fund. The Stormwater Operating Fund is primarily self-supporting and has budgeted revenues of

$1,535,000, which is $515,000 higher than the prior year. This fund incurs costs to ensure compliance with the National Pollutant Discharge Elimination System Permit. Stormwater capital projects are funded by the Local Option Fuel Tax, and transfers in from the Stormwater Operating Fund, as available.

Accumulated fund balance (carryover) will be utilized for major drainage projects. The City is finalizing the design for bidding of the Central Island Drainage Project to improve its stormwater pumping capacity.

Capital Improvement Program

The Capital Improvement Program concentrates on the development of parks, infrastructure, and rehabilitation of our facilities including major road resurfacing, sidewalk improvements, and pedestrian safety. A capital improvement project generally exceeds $25,000 and has a useful life of five years or more. The City has been successful in leveraging City dollars to obtain grant awards and legislative appropriations for some capital projects and will continue to seek these where possible.

The Capital Improvement Program Fund is funded by a transfer from the General Fund, grants, impact fees, other development fees and contributions/donations.

Capital projects, which total $55,496,684 (including $37,406,684 carryover from the 2023- 2024 fiscal year), are recommended, and funded by the Capital Improvement Program Fund.  All of the capital improvement projects requested and proposed for this year are fully detailed in our proposed Five-Year Capital Improvement Plan (CIP) located in the CIP section of this document. Please note that many capital projects are multi-year endeavors.

Conclusion

In conclusion, our 2024-2025 Fiscal Year Budget is one that is presented with transparency and represents our meetings with elected officials, with the understanding and compromise to develop the right sized government for our community and ensuring that the needs of the members of the public are met. Our goal is to maintain fiscal responsibility while providing the utmost level of high-quality services our residents and visitors have come to expect. This work could not have been accomplished without the input and vision of the Mayor, Vice Mayor and Commissioners, the direction of our Finance Director, Tiffany Neely and the Finance Department team, and our Department Directors. On behalf of Deputy City Manager Susan Simpson, we express our sincere thanks and gratitude.

Respectfully submitted,

Stan Morris

City Manager

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